Far Eastern Affairs A Russian Journal on China, Japan and Asia-Pacific Region
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VOLUME 47, No. 1
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Author: Nataliya Zamarayeva
China and Problems of Reaching a Peace Settlement in Afghanistan
Nataliya A. Zamarayeva, Ph.D. (History), senior researcher, Institute of Oriental Studies, Russian Academy of Sciences. E-mail: firstname.lastname@example.org
Source: Far Eastern Affairs, Vol. 47, No. 3, 2019, pp. 49-64
DOI (original): 10.31857/S013128120005264-1
DOI (translation): 10.21557/FEA.55555354
Abstract. This article analyzes China’s position on reaching a settlement on the crisis in Afghanistan. The dynamic of Beijing’s approach is described with allowance for inter-Afghan and regional challenges: strengthening the armed opposition in Afghanistan, its influence on the Muslim Uighurs of Xinjiang, and strengthening the strategic partnership between the United States and India in the region. The year 2015, when Beijing and Islamabad signed an agreement to create a China-Pakistan economic corridor (CPEC), was a landmark for the region.
Keywords: Afghanistan, combatants, government of national unity, China, Pakistan, United States, Uighurs
The events in Afghanistan and the 2001-2014 antiterrorism campaign conducted there by troops of the US-NATO coalition presented China with a number of challenges: the multiyear presence of NATO troops in direct proximity to China’s national borders; terrorist activity by the Muslim Uighurs in Xinjiang and a stepping up of their struggle to create an independent state; insurgent Afghanistan blocking the gateway to the rich raw hydrocarbon markets of Central Asia, Iran, Turkey, the republics of the Caucasus, and the countries of the European Union; rivalry with India for influence in Afghanistan; and a rise in tension in Pakistan-Afghan relations over a number of issues.
The strengthening of strategic relations between the United States and India – China’s main economic competitor in the region – led in November 2018 to the Iranian port of Chabakhar (a New Delhi infrastructure project) being taken off the list of US sanctions.
A new challenge for China was the December 2018 announcement by US President Donald Trump that 7,000 American troops would be withdrawn from Afghanistan. The failure of the US military campaign and the inconsistency in the actions of the American administration led to a political vacuum and a subsequent strengthening of the struggle for power among the intra-Afghan forces.
Beijing and Washington are pursuing different aims in Afghanistan. The White House’s 2017-2019 opening of a dialogue with the Taliban movement has the goal of “convincing” the Talibs to accept Afghanistan’s current constitution, lay down their arms, and cease following Islamic law. But its efforts continue to encounter armed resistance from the opposition.
Beijing’s policy for an ongoing dialogue with the opposing forces in Afghanistan has remained constant throughout the years of conflict. China’s military, economic, and political participation in Afghanistan is intended to protect its domestic security and economic projects. Beijing has, either alone or in cooperation with Islamabad, consistently urged the insurgents and the countries of the region to recognize its role in bringing peace to Afghanistan. It has taken a flexible approach, following a policy of “soft” power and investing in the country. Finally, it has negotiated with representatives of the government of national unity, different political parties, and the armed opposition. Beijing’s search for compromise with the Afghans has only aggravated American-Chinese disputes in the region, which grew with the June 2018 start of a trade war between the two countries.
Afghanistan holds a special place in the system of foreign policy priorities of Pakistan, India, Iran, China, and Russia, and has traditionally been an important element of their national security strategies. Considering the country’s geographic position at the junction of continents, the drawing out of the resolution to the Afghan crisis predetermined a clash between the transport, logistic, trade, and economic interests of the above countries:
· the Chinese Belt and Road initiative;
· the Afghan-Iranian-Indian transportation corridor from the port of Chabakhar and beyond along the overland route into Afghanistan;
· Russian proposals within the context of the Eurasian Economic Union (EAEU) and international North-South corridor.
The situation with security in the region is deteriorating, due to the shifting of foreign combatants of the Islamic State (IS) terrorist organization into Afghanistan. These challenges can be overcome by combined efforts, but only after the conflict ends.
The events of the early 1990s in Afghanistan, the armed struggle for leadership among ethnic groups, the coming to power of the Taliban movement in October 1996, and the proclamation of the Islamic Emirate of Afghanistan (IEA) influenced the shaping of the consciousness of China’s Muslim Uighurs living in the lands bordering Afghanistan in northwest China. Their call to arms for secession from the People’s Republic alarmed Chinese authorities. Despite Afghanistan’s international isolation in the last decade of the 20th century, Beijing made several attempts to open contacts with the leaders of the IEA.
Following the principle of maintaining relations with the country and not individual administrations, China in September 2001 was one of the first to recognize the new government after the fall of the Taliban regime. Beijing was the first capital to which Hamid Karzai made an official visit as head of the transitional government in January 2002. In June 2006, President Karzai and Chairman Xi Jinping signed a good-neighbor treaty of friendship and cooperation between China and the Islamic Republic of Afghanistan (IRA). China gave around $250 million in financial aid to Afghanistan in restoring its economy. In subsequent years, Beijing invested billions of dollars in its infrastructure, and in harvesting IRA mineral and energy resources.
India has also rendered Afghanistan financial aid, investing $2 billion since the start of the 21st century.
US President Barack Obama’s January 2009 announcement that American troops would be withdrawn from Afghanistan triggered efforts by regional elites to start devising formulas for further relations with Kabul. They all had three components in common: developing economic ties, initiating security measures, and engaging in cultural exchange.
Beginning in 2013, Beijing intensified diplomatic efforts to settle the intra-Afghan conflict on both the regional and local levels. This coincided with the launching of its One Belt, One Road initiative. The creation of a unified regional transportation and logistical network was announced, one section of which was planned to cross Afghan territory and beyond, into Iran or the republics of Central Asia.
The disintegration of the Soviet Union in the 1990s opened new markets for China in the countries of Central Asia. However, the road to these lay through insurgent Afghanistan. The stability of socioeconomic and political development in Afghanistan guaranteed there would be no repeat of the events of the 1990s.
China followed the US attempts to organize negotiations with the leaders of the Taliban movement, whom it removed from power in September 2001. Beijing took advantage of the experience and blunder of their opponents in devising its own policy of mediation in the intra-Afghan conflict. It enlisted guarantees of support from each side of the conflict and powers in the region, especially Islamabad.
Pakistan has always had stronger levers of influence over Afghanistan than other countries, due to their combination of historical, cultural, religious, and ethnic ties. Most important, however, is the Pushtun factor, which was key in Islamabad’s official recognition of the government of the Islamic Emirate of Afghanistan in the 1990s.1
Along with Saudi Arabia and the United Arab Emirates, Pakistan was one of the three countries to establish diplomatic relations with the IEA in the 1990s. There was a sharp turn in its strategic policy in September 2001, under the influence of events in Kabul and pressure from the United States. Yesterday’s allies, Islamabad and the Taliban movement became enemies. Islamabad nevertheless sheltered some Afghan Talibs on its territory. According to information from Pakistani media, Mullah Omar, the IEA’s spiritual leader, lived on the territory of Pakistan after fleeing from Afghanistan in 2001 and remained there until his death in 2013.
Beijing’s 2009-2019 efforts at mediation on the regional and international levels were perceived favorably, since China was never a party to the intra-Afghan conflict.
The negotiating process was stepped up in 2014 in the runup to the withdrawal of troops of the International Security Assistance Force (ISAF) from Afghanistan. In July 2014, China’s foreign ministry appointed the high-ranking diplomat Xang Youzhi as Beijing’s special representative in Afghanistan. At the same time, Beijing held the first trilateral forum with the participation of Islamabad and Kabul and announced it was financing a number of large energy and infrastructure projects in Afghanistan.
China approached India and Iran with a proposal to expand the trilateral dialogue. At the same time, it also appealed to Saudi Arabia and other countries of the Persian Gulf, first of all viewing them as one of the main sources of financing for different groups of the Afghan Taliban, and second in seeking support for making contacts and organizing meetings with the Taliban. Chinese diplomats held a number of meetings with emissaries of the Afghan Taliban in Riyadh, Doha, and Pakistan, but no progress was made during these years.
The successful completion of the election process on September 28, 2014, the forming of the Government of National Unity (GNU), and the first peaceful transfer of power from one elected head of state to another (in the person of President Ashraf Ghani Achakzai) in the history of the Islamic Republic of Afghanistan did not bring normalization of the situation inside the country any closer. Implementing the Program of National Reconciliation – negotiations with the armed opposition (i.e., the Taliban movement) – remained a challenge.
President Ghani was faced with the problem of engaging all of the country’s political forces together into the “legal sphere of politics.” Because of the Taliban’s 2001 rejection of direct negotiations, there remained the task of choosing an international intermediary. The GNU saw the six countries bordering Afghanistan (Iran, China, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan) as the first circle of those responsible for stabilizing the situation in the region. They were followed by the Islamic world, North America, Europe, Japan, Australia, and the members of NATO and the ISAF. The list finished with the United Nations, international civil society, and nongovernmental organizations.
President Ghani chose China, whose experience as an intermediate had two distinctive characteristics:
· First, the Chinese had embraced all of the main groups involved in the conflict, both in Afghanistan and in the region.
· Second, they displayed the most neutrality to all of the belligerents and were, therefore, judged worthy of authority even among the Afghan Taliban.
The Government of National Unity believed that the long-term stability of its economy could be guaranteed by expanding integration in the region and investment by the giants India and China. Following the example of the Karzai government, President Ghani originally wagered on China with the prospect of Afghanistan being included in the One Belt, One Road initiative.
President Ghani made his first international visit to China in October 2014, less than a month after his inauguration. Chinese leader Xi Jinping did not offer to replace the Western troops being withdrawn from Afghanistan; instead, he maintained that questions of internal security fell under the purview of Kabul. The elimination of foreign combatants remained a priority for both parties, along with financial and technical aid in building infrastructure facilities. Between 2001 and 2013, China provided Afghanistan with a total of $240 million in economic aid.2 China’s investment in the copper ore fields of Ainak and the Hospital of the Republic are well known.3 Beijing then offered Kabul a $327 million loan in October 2014 and invited 3,000 Afghan technicians to study in China. Beijing invested in the construction of pipelines, the building of electrical power networks, and other infrastructure facilities. Against the background of PRC diplomatic successes, Islamabad in turn announced it was resurrecting the CASA-1000 electrical power project in October 2014.
China was enticed by Central Asia with its rich trade markets and water and energy resources. Beijing believes large, mutually beneficial deals can be made along the Afghanistan-Pakistan-China transport, economic, and logistical chain. For example, the oil project in the Amudari Basin could eventually help Afghanistan revive its economy.
The relations among the three countries were described in 2014 as “special” and a “triangle of stability” with the declared aim of building a comprehensive and enduring partnership. Once again, there was talk of the so-called Pamir Group of countries the interlocked territory of which was a crossroads of goods, ideas, cultures, and religions between China, Central Asia, the Arab world, and Europe. President Ghani then announced the coming years would be a period of constant transformation of his country – an action program that would culminate with its inclusion in China’s Silk Road initiative.
The change in political leadership in Afghanistan in September 2014 helped ease the normalization of relations between Kabul and Islamabad. However, the terrorist act in Peshawar in December of that year, the responsibility for which was claimed by Taliban based in Afghanistan, once again aggravated bilateral relations.
Under these conditions, Beijing stepped forward as an intermediary and initiated a trilateral China-Pakistan-Afghanistan dialogue in February 2015. Its main goal was a joint campaign against terrorists in border regions and mutual humanitarian aid.4
The countries of the region also contributed to the settling of Afghanistan’s internal conflict. The first Heart of Asia-Istanbul Process conference, organized by Turkey, began on November 2, 2011. It would subsequently be held annually: in Afghanistan, on June 14, 2012; in Kazakhstan, on April 26, 2013; in China, on October 31, 2014; in Pakistan, on December 9, 2015; in India, on December 4, 2016; and in Azerbaijan, on December 1, 2017. Kabul welcomed the collective and cooperative response to the threats from nonstate actors, meaning the terrorist groups of the Islamic State on the territory of Afghanistan.
Despite the stability in their bilateral relations, Kabul and Beijing held different positions on a number of issues. China has a slightly more than 75-km-long common border with Afghanistan in the region of the narrow Wakhan Corridor. The Chinese have been sealing it since the 1990s, fearing that Uighur combatants would flood in from Afghanistan and the “Islamic wave” would reach as far as Xinjiang. China’s fears were reinforced between 2001 and 2014, during the ISAF’s antiterrorism campaign. Beijing also saw the training bases situated in Afghanistan and Pakistan for Muslim Uighurs from the Islamic Movement of East Turkestan (IMET) as a threat to national security, assuming that the combatants would return to China after the withdrawal of coalition troops from the region, which would then “sink into chaos.” Combatants from the Islamic State, fleeing from Iraq and Syria into Afghanistan, also pose a threat to the Xinjiang Uighur Autonomous Region (XUAR).5
As early as the late 20th century, separatist ethnic Uighurs were calling for the creation of an independent state, East Turkestan.6 The organization known as the Islamic Party of Turkestan (IPT) was created in the 1990s. It operates in China and the countries of Central and South Asia. In the first decade of the 21st century, it had bases in the tribal zone of Pakistan and the border provinces of Afghanistan. The heads of IPT held key positions in Al-Queda. Abdul Shakur al-Turkestani and Abdul Khak al-Turkestani, a former IPT field commander, were members its ruling council. In the 1990s, Abdul Khak trained recruits at Al-Qaeda’s Tora-Bora training camp in Afghanistan. More than 1,000 combatants from China underwent military training in Afghanistan. They later participated in military actions against the Northern Alliance on the side of the Taliban and efforts to undermine China and the Central Asian countries. Abdul Khak then moved into Pakistan, to the center for training foreign combatants. IPT headquarters was located there as well, in the regional capital of Miran Shakh.
Chinese officials described the IPT as a terrorist organization, accusing it of acts of terrorism and threats to disrupt the 2008 Olympic Games in Beijing.7
As early as his first visit to China in October 2014, President Ghani convinced the PRC leadership to open the corridor to commercial traffic, confirming Afghanistan’s readiness to fight against the IPT. Beijing refused, since the region stretching from Karakorum to Wakhan, would remain extremely vulnerable in terms of security.8,9 China’s refusal, however, did not deter Kabul. In 2018, the two agreed Afghanistan’s national army would train a mountain brigade from the People’s Liberation Army to patrol the corridor.10
Beijing also assigns Wakhan Corridor the strategic role of the starting point for the Afghan segment of the One Belt, One Road initiative. Beijing views Wakhan itself as the site of a Central and South Asian industrial park and warehouse facilities.
The XUAR currently has a weak manufacturing base. Considering the difficult high-altitude natural and geographic conditions in the mountainous border regions of China and Pakistan, it is very expensive to build and operate large infrastructure facilities. China has in recent years made efforts to modernize and repair the Karakorum Highway joining China and Pakistan.
Islamabad took decisive action in the region prior to the withdrawal of ISAF troops from Afghanistan. On May 22, 2014, the army high command ordered the start of military operations to eliminate all foreign combatants (including Chinese Uighurs). The People’s Liberation Army had long insisted on their destruction.11 Military operations began soon after an attack by combatants in Urumqi (where 31 people were killed) and the kidnaping of a PRC citizen in northwest Pakistan, the responsibility for which was claimed by the Taliban movement.
Pakistan’s foreign ministry later asserted that the success of military operations in the zone of Pushtun tribes confirmed the viability of the Pakistani-Chinese concept of “Asian security.”
Most important to China, however, was that the separatist elements had not been destroyed. At the same time, efforts to force bands of the Islamic Movement of Uzbekistan (IMU) from Afghan territory were intensified.
At the end of December 2014, the ISAF high command announced it had accomplished its mission. On January 8, 2015, the Afghan National Defense and Security Forces (ANDSF) assumed full responsibility for security inside the country. Since January 2015, the task of the new Resolute Support Mission (RSM) has been limited to consulting with and assisting the ANDSF. The Taliban and the foreign bands associated with them interpreted the withdrawal of ISAF forces as a victory over the occupying forces, which led to fierce armed resistance in Afghanistan.
Not only did the Taliban movement organize itself in the years of the ISAF military campaign, it had by 2014 evolved into an armed force that controlled half of the country’s territory, raising special alarm over the withdrawal of foreign troops.
For a number of reasons, the spring offensive of the armed opposition (a traditional feature of Afghanistan’s southern provinces) in 2015 was augmented with attacks on installations of the national army and civil administration in the eastern and northeastern regions. President Ghani’s position was weakened. Pro-Kabul forces were fragmented (nine months were needed merely to form the Government of National Unity). For Afghanistan’s leadership, the situation was critical. The possibility of attempts by Taliban groups to overthrow the government and seize Kabul once again according to the scenario of October 1996 could not be excluded. This generated fears of a further rise in transborder extremism and the threat of narcotrafficking in the region.
At the same time, there was a turning point in the Taliban movement’s position on the negotiating process. The combatants agreed to the dialogue format but refused to meet with representatives from the Government of National Unity.
The threat of the destabilization of Afghanistan, a renewed outbreak of Islamic extremism in the region, and thus an indefinite delay in completing the Afghan segment of the Silk Road, convinced China and Pakistan of the need to intensify mediation of Afghanistan’s internal conflict. The parties once again confirmed their support for the Afghan process toward a settlement and peace.12
The form of government, the structure of the state, and the division of power in Kabul were the main topics of negotiation between the Taliban movement and the international intermediaries, including China.
In February 2015, China’s foreign minister Wang Yi confirmed that Beijing supported Afghanistan’s government in the matter of mediation, with different political and armed groups, including the Taliban, ready to play a constructive role and extend cooperation. At the same time, China announced the financing of a 1,500 MWt hydroelectric project in eastern Afghanistan’s Kunar province. The opening of the dam would provide electricity to Pakistan as well. China planned to invest in the future in the construction of a motorway from Kabul to the Pakistani city of Peshawar, and a railbed from Quetta (the capital of Beluchistan province) to Afghanistan’s Kandahar.
The trilateral dialogue continued in May 2015, in the Chinese city of Urumqi. It should be viewed in the context of the preparations for the first direct dialogue between the Taliban movement and representatives of Afghanistan’s Government of National Unity. Prior to this, international intermediaries (China, Pakistan, the United States) met in an informal setting with members of the Taliban’s Political Commission (headquartered in Qatar). The Taliban demanded they be granted equal participation in governing the nation. In the spring of 2015, still other groups from the Afghan Taliban sat down at the negotiating table in Norway, France, Japan, and other countries.
Beginning in 2015, China and Pakistan increased their efforts to achieve a settlement in the Afghanistan’s internal conflict. This was also explained by the launching of the China-Pakistan Economic Corridor (CPEC) infrastructure project, the documents for which were signed in April 2015. Its cost was originally set at $46 billion, with a planned 3% annual rise in GDP. The implementation of this strategically important project, some of whose routes were planned to run in direct proximity to the borders of Afghanistan, forced Islamabad to take all measures needed for defense and security. Construction work on the CPEC project began in cooperation with armed units of a company representing one of Pakistan’s largest building corporations. The Afghan vector of Pakistan’s foreign policy was traditionally controlled by its military-backed ruling party.
China planned that in the future, the overland route from the port of Gwadar through Pakistani Beluchistan up to Kashgar would be extended over the territory of Afghanistan. This would allow Beijing to connect Kabul to the waters of the Strait of Hormuz while regulating the flow of trade and transport from the countries of the West to Shanghai. The outlet to the Strait of Hormuz would allow Beijing to control the traffic of tankers carrying crude oil from the countries of the Near East, triggering fears in the White House.
However, the opposing parties in Afghanistan stopped implementation of the project. Only the commercial interests of the Taliban and their participation in the Afghan part of the Chinese initiative could incline them toward negotiations and subsequent regulation.
The second half of 2015 became a turning point for the trilateral Chinese-Afghan-Pakistani forum. The deterioration of Pakistani-Afghan relations at the end of 2014 proved a challenge. Under the prevailing circumstances, Beijing unilaterally took steps in intra-Afghan processes and simultaneously emerged successfully as a mediator in settling the conflict between Islamabad and Kabul.
As part of its obligations to facilitate the intra-Afghan peace process and settlement, Pakistan received representatives from the Government of National Unity and the Taliban movement on July 7, 2015. The meeting was held in the context of a quadrilateral coordination group. China and the United States were present as observers. In contrast to the earlier years of consultations, this was the first round of negotiations where all of its participants (according to a statement from Pakistan’s foreign ministry) were granted official powers.
Islamabad referred to these negotiations as “breakthrough.”13 The parties expressed their intention to bring peace to Afghanistan and the region. The success of the negotiations laid the way to an active dialogue in Afghanistan with the participation of the armed opposition.
Several days later, information confirming that Mullah Muhammad Omar, the leader of the Afghani Taliban, was satisfied with Pakistan’s mediation appeared in the Pakistani newspaper The Nation. It was simultaneously emphasized that “the holy jihad to liberate our beloved homeland and reestablish the Islamic system remained imperative.”
However, subsequent events derailed the efforts of all parties involved in the dialogue organization. Pakistan’s foreign ministry announced that “… in connection with reports of the death of Mullah Omar and the ensuing uncertainty, and at the request of the leaders of the Afghan Taliban, the second round of the Afghan peace negotiations, scheduled for July 31, 2015, has been postponed. Pakistan and other countries friendly to Afghanistan have expressed the hope that the leaders of the Taliban will continue to participate in the peace negotiations with the aim of helping to establish a durable peace in Afghanistan…”
The loss of the second round of negotiations was followed by the publishing in the Pakistani media of information that Mullah Omar had died as early as April 2013. Many rumors circulated as to who let slip the great secret of the spiritual leader’s demise. The events of July 2015 strengthened the discord among the Afghan opposition groups, the Pakistani Taliban operating on the territory of Afghanistan, aggravated relations between the armed opposition and the Kabul government, and finally caused a long-lasting rift between President Ghani and Pakistan’s military and civil authorities.
The main beneficiary of the 2015 breakdown in intra-Afghan negotiations was India. New Delhi considered the ties between the Al-Qaeda combatants who operated in Afghanistan between 1996 and 2001 and armed Pakistani groups to be a threat to its positions in Kashmir, emphasizing that it was the combatants trained in the camps in northern Pakistan who committed the terrorist acts in Mumbai in November 2008 and July 2011.
In contrast to China, India maintained relations exclusively with Kabul’s governing administrations from 2002 to 2018, rejecting any negotiations with the Taliban movement. New Delhi believed strengthening of the role of Islamabad and Beijing would undermine the Afghan-Indian strategic partnership pact signed on October 5, 2011, thanks to which India obtained an institutional base for cultivating political potential in Afghanistan.14 The Indians contributed $2 billion in financial aid and investment to developing cooperation in trade, defense, and education. Its role in ensuring the internal security of Afghanistan was confirmed for the first time. The agreement included the Indian armed forces’ commitment to training Afghan security forces, including the police. At the same time, President Ghani adopted a policy of expanding cooperation with the United States, the European Union, and India to plan the future of his country.
That same year, President Karzai and Indian Prime Minister Manmohan Singh signed two agreements for easing the energy crisis in Afghanistan and continued cooperation with the countries of South Asia.15
The tension in Pakistani-Afghan relations indirectly fueled a gradual head-on collision between President Ghani and Indian Prime Minister Narendra Modi, who was pursuing his own goals in Afghanistan:
· blocking Pakistan’s efforts to restore its predominant influence;
· preventing attacks by Afghan combatants on Indian facilities;
· blocking the projects of the China-Pakistan Economic Corridor, citing China’s interference in Kashmir affairs.
India gave Afghanistan several symbolic gifts. In December 2015, Kabul received a new parliament building, and it was announced that $1 billion would be provided for projects to restore the country’s national economy, making India one of Afghanistan’s largest donors. In June 2016, the heads of government inaugurated a $300 million dam reconstructed with investment assistance from New Delhi. The 42 MWt dam was intended to irrigate 75,000 hectares of farmland. Erected in the province of Herat on the border with Iran as long ago as 1976, the structure had been damaged during the civil war of the 1990s. Its technical refurbishing required the efforts of 1,500 Indian and Afghan engineers.16 In July of that year, Indian Prime Minister Modi and Afghan President Ghani opened the Great Palace in Kabul, which had been restored with India’s financial support.
In erecting infrastructure and industrial facilities in Afghanistan, India was simultaneously attacking China’s economic interests in the region, and doing so with the cooperation of Afghanistan and Iran. Having restored the strained relations between Pakistan and Iran, New Delhi persuaded Kabul and Tehran in May 2016 to sign an agreement on the reconstruction of the Iranian port of Chabakhar by promising to invest $500 million in the project. The agreement was of exceptional benefit to both Teheran (since it expanded exports of Iranian oil to the international market) and India itself17 (since the announced trade route set the goal of ending the country’s isolation from the Central Asia region).
India is considering a project to rebuild the port of Chabakhar as the initial point of a trade corridor that would be an alternative to the CPEC. Like the CPEC, it would start from the shore of the Strait of Hormuz, but then traverse Iran and Afghanistan into Central Asia. There are several reasons why India opposes the CPEC. First, New Delhi has accused Islamabad and Beijing of seizing part of its territory to lay the road for the CPEC over disputed Pakistani-Indian regions of Kashmir. Second, India has protested the presence of Chinese naval units in the Pakistani seaport of Gwadar. The port, occupying a strategic position between the Arabian Sea and the Persian Gulf, provides Beijing with the shortest route to the markets of the Near East, Africa, and Europe. Third, New Delhi was worried that the CPEC would serve the goals of China’s economic development. With the best outcome of the situation in Afghanistan for China and Pakistan, the northern shoulder of the CPEC would take both Beijing and Islamabad to new trade, hydrocarbon, and overseas markets around the world.
In trying to lower the rising tension, China followed a diplomacy of “soft” power, inviting India to join in the Silk Road initiative. It emphasized the economic benefits for the capitals of the region, pointing out that a nondisputed Kashmir could potentially become the gateway to the republics of Central Asia.18
A new challenge to Indian interests was the December 2018 announcement by US President Donald Trump that the American military contingent in Afghanistan would be scaled down in 2019. This changed the prevailing security scenario in Afghanistan and the region. The struggle for power between the pro-Kabul forces and the armed opposition inevitably led to civil war. The strengthening of the Taliban’s stance in their homeland consolidated their position in Kashmir, which was unacceptable to India. It feared the rise of an independence movement in the Himalayan Valley.
Throughout the years of the conflict in Afghanistan, India supported the position of the official Kabul government: convince the Taliban movement to recognize the country’s constitution, lay down its arms, and join the political mainstream. In contrast to Beijing, New Delhi rejected direct negotiations with the armed Afghan opposition.
The new (December 2018) security scenario demanded that New Delhi reorient its policy toward Islamabad and the Taliban. In January 2019, confirming his country’s national interests in Afghanistan, Lieutenant General Bipin Rabat, commander of the Indian army’s ground forces, called for negotiations with the Taliban without any preliminary conditions.19 The statement from the Chief of Staff contrasted with the position of India’s foreign policy establishment, which continued to support the Kabul formula of peace process and settlement in Afghanistan.
The next stage of organizing an intra-Afghan dialogue began in January 2016. It included the government of Afghanistan and an expanded number of international intermediaries: China, Pakistan, and the United States, all within the context of a quadrilateral negotiating process. However, the forum soon turned into a fiasco, since the Americans insisted on a direct dialogue between the Afghan government and the Taliban.20
In 2016, Russia stepped up its Afghanistan-oriented diplomatic efforts. In December of that year, Moscow hosted the first joint meeting with Beijing and Islamabad on reaching a settlement in the intra-Afghan crisis. The three parties discussed the deterioration of the security situation in the region; of special concern was the activation of extremist groups of the Afghan wing of the Islamic State (IS) terrorist organization. Kabul and New Delhi boycotted the meeting in Russia.
Russian President Vladimir Putin’s announcement that Russia was renewing its intermediary mission in the Afghan negotiating process, made during the June 8-9, 2017 summit of the Shanghai Cooperation Organization (SCO) in Astana, evoked a clear reaction in Islamabad and Beijing. Neither China nor Pakistan were interested in Moscow participating in the settlement for the inter-Afghan crisis.
Beijing hurried to settle relations between Islamabad and Kabul. The tension between them was blocking resolution of the Afghan conflict, since a mere political settlement was insufficient without peace between Afghanistan and Pakistan. During this period, PRC Chairman Xi Jinping adopted a policy of presenting China as an alternative to the United States and Russia, abandoning the long-held policy of keeping a low PRC profile in international affairs. He once again offered a formula for negotiations: Afghanistan + China + Pakistan. In June 2017, PRC Foreign Minister Wang Yi visited both capitals with the aim of creating a platform for communication, i.e., working together to improve relations between Islamabad and Kabul in order to facilitate the process of reaching a settlement in Afghanistan. The negotiations were successful: mechanisms were developed for crisis management and dialogue between the three countries’ foreign ministers.
The success of the trilateral negotiations helped create a mechanism for reaching a settlement; most important, the meeting underlined China’s growing role in global hot spots. In the period under consideration, Beijing opened negotiations with leaders of Taliban movement groups and representatives of the political opposition in Kabul, Gulbuddin Hekmatyar in particular, with Islamabad acting as an intermediary.
The destabilization of the political situation inside Afghanistan and the deterioration of Pakistani-Afghan relations reached a new level in 2017. Fuel was added to the fire by harsh statements from US President Donald Trump, who accused Islamabad of:
· harboring on its territory Afghan combatants who carry out transborder attacks on civilian and military targets in Afghanistan;
· promoting Pakistan’s strategic interests in the Afghan negotiating process by using its influence over the leaders of the Taliban movement.
The American administration’s May 2017 announcement that the size of the US military contingent in Afghanistan would be raised by 3,000-4,000 personnel evoked a negative reaction from Islamabad and Beijing. On June 1, 2017, Pakistan’s foreign ministry stated there could be no military solution to the Afghan conflict.
The strategy in Afghanistan and South Asia announced by the US President in August 2017 posed a new challenge to Islamabad and Beijing, putting their participation in the quadrilateral coordination group on hold.21 However, the two capitals continued their own independent negotiations with the Afghan authorities and the armed opposition.
Having wagered on a military solution to the intra-Afghan conflict in 2017, the White House scrapped the efforts of recent years oriented toward negotiations between the Kabul government and representatives of the opposition in the form of the Taliban movement, with the participation of China, Pakistan, and the United States as international intermediaries. At the same time, the United States tightened its sanctions against Pakistan. In response, Islamabad renewed threats to block the overland and aerial transit of cargoes for the American military personnel in Afghanistan, as it had done in 2011. The Americans hurried to open negotiations with Kazakhstan on an alternative route for shipping their cargoes. The Afghan Taliban responded with a number of terrorist acts.
The US strategy in Afghanistan and South Asia in 2017 underlined India’s leading role in stabilizing the Afghan situation. New Delhi viewed China’s growing role in Afghan negotiations as Beijing’s way of forcing it out of Afghanistan. That same year, New Delhi and Kabul launched “a new partnership for development” by announcing 100 new projects in the areas of education, health care, agriculture, energy, and resource management. India promised to implement projects for delivering potable water to Kabul, providing low-cost housing for refugees returning from Pakistan, laying pipelines to supply water to the city of Charikar, and building a polyclinic in Mazar-e Sharif. The media in Islamabad and Karachi reported that India was following a policy for the “strategic encirclement of Pakistan” in the region, saying it alone would be responsible for all the pain and suffering of the Afghan people. Islamabad and Beijing reacted negatively.
However, their next challenge would be the ultimatum issued by President Ashraf Ghani immediately after the October 2017 visit of US Secretary of State Rex Tillerson. Afghanistan would join in the CPEC project only if Kabul were granted access to corridors along the border between Pakistan and India. Otherwise, it would restrict Islamabad’s transit to the markets of Central Asia. Relations between Afghanistan and Pakistan were once more at a dead end, and only the persistence of China could unblock them. It insisted on holding a trilateral meeting in December 2017 as part of an initiative by PRC Chairman Xi Jinping to improve relations and develop cooperation.
Considering the variability of President Ghani’s position, Beijing held official negotiations during this period with Kabul’s political opposition, Gulbuddin Hekmatyar in particular.22 The leader of the political party Hezb-e Islami of Afghanistan became the candidate of the combined political opposition prior to the 2019 presidential elections in Afghanistan.23
Planning long-term political cooperation with Afghanistan, Beijing embarked on an ambitious program of investing in the country’s economy and took part in negotiations with a wide spectrum of its political establishment and armed opposition.
The security situation inside Afghanistan has grown more complicated in recent years as a result of combatants belonging to the Islamic State terrorist organization rebasing themselves there from Syria. Fearing they would move into Xinjiang, China began negotiations with Kabul on establishing military base in the region of the Wakhan Corridor, while bearing responsibility for financing the project and training Afghan military personnel.
In June 2018, the American Congress once again adjusted the Afghan vector of its foreign policy in light of the minimal results gained against a 17-year background of paying for the military and civilian needs of the US and NATO antiterrorism campaign. Washington demonstrated its readiness to participate in the dialogue with the Taliban movement, but only if it were done jointly with representatives of Afghanistan’s Government of National Unity.
The combatants’ many years of refusing to negotiate directly with the Kabul government once again convinced the White House in December 2018 to alter its approach to both the Afghan situation and Islamabad. President Trump contacted Pakistan’s Prime Minister Imran Khan with a request to help arrange direct negotiations with leaders of the Taliban. At the end of 2018, as part of a dialogue organized by Islamabad, representatives from Washington and the Qatar office of the Taliban movement discussed two main issues without the participation of officials from Kabul: a timetable for the withdrawal of all foreign troops (a demand from the Taliban) and the form of Afghanistan’s government (a demand from Washington). The negotiations were held, but the Americans’ concerns were not addressed.
The US response was the trilateral format for the Afghanistan-China-Pakistan negotiations organized by Beijing, which were also held in December 2018.
The current state of Pakistani-Chinese relations according to the “shared future” formula (i.e., the coinciding of fundamental national interests) was made possible by Pakistan’s military command presenting China with a number of its own Taliban provisions for launching a new stage of the Kabul process under the patronage of Beijing.
The American administration objected strongly to strengthening China’s role in reaching a settlement in the Afghan crisis. At the same time, Washington dealt another blow to Beijing’s position in the region: it excepted the Iranian port of Chabakhar from its sanctions policy, strengthening India’s regional position.
The conflict of interests between China and the United States excludes a settlement in the intra-Afghan crisis, regardless of how many rounds of peace negotiations are held and what their format is. The beneficiary of the ongoing armed conflict in the region remains the terrorist groups supported by the countries sponsoring them. Time has already shown that Beijing is winning the race for Afghanistan.
1. The Pushtuns are the Afghan state’s predominant ethnic group, separated artificially from the zone of Pushtun tribes in the Afghan-Pakistani border region. For Beijing, the Pushtuns (Afghan and Pakistani) were one of the most important factors in developing the strategy of trilateral China-Afghanistan-Pakistan cooperation.
2. Kazanin, M.V., O roli KNR v mirnom protsesse v Afghanistane [On China’s Role in the Peace Process in Afghanistan]. URL: http://www.iimes.ru/?p=28278 (Retrieved on May 8, 2016.)
3. China-Afghanistan Relations in 2009. URL: http://af.china-embassy.org/eng/zagx/ introduction/t853111.htm (Retrieved on August 30, 2011.)
4. China-Pakistan-Afghanistan: The Anti-Terror Tripod. URL: http://www.mushahidhussain. com/news-detail.php?id=MjM1&pageid=media (Retrieved on February 13, 2015.)
5. Beijing in Talks over Military Base in Remote Afghanistan: Officials. URL: https://www. dawn.com/news/1386840/beijing-in-talks-over-military-base-in-remote-afghanistan-officials (Retrieved on February 2, 2018.)
6. East Turkistan Islamic Party. URL: http://www.thefrontierpost.com/china-says-afghan-presi dent-vows-to-help-china-fight-militants/ (Retrieved on October 29, 2014.)
7. Turkistan Islamic Party (TIP). URL: https://www.trackingterrorism.org/group/turkistan-islamic-party-tip (Retrieved on November 12, 2018.)
8. Long Term Plan for China-Pakistan Economic Corridor (2017-2030). URL: http://pc.gov.pk/ uploads/cpec/LTP.pdf (Retrieved on November 21, 2017.)
9. China Says Afghan President Vows to Help China Fight Militants. URL: http://www.dawn. com/ news/ 1141147 (Retrieved on October 29, 2014.)
10. US Sees China, Russia and Iran as Key Players in Afghanistan. URL: https://www.dawn. com/news/1453661/us-sees-china-russia-and-iran-as-key-players-in-afghanistan (Retrieved on December 26, 2018.)
11. Turkistan Islamic Party Target of Pakistani Army Incursion in North Waziristan. URL: http://www.longwarjournal.org/archives/2014/05/turkistan_islamic_party_target.php (Retrieved on May 22, 2014.)
12. Foreign Secretary Attends First Round of China-Afghanistan-Pakistan Trilateral Strategic Dialogue, Meets with His Counterpart and Calls on Afghan Ministers. URL: http://mofa.gov. pk/ pr-details.php?mm=MjU1Mg (Retrieved on February 9, 2015.)
13. Record of the Press Briefing by Spokesperson on July 09, 2015. URL: http://mofa.gov. pk/pr-details.php?mm=MjkyOA (Retrieved on July 9, 2015.)
14. All Eyes on the Visit. URL: http://nation.com.pk/columns/02-Oct-2015/all-eyes-on-the-visit (Retrieved on October 2, 2015.)
15. Afghanistan and India Sign “Strategic Partnership.” URL: https://www.bbc.com/news/ world-south-asia-15161776 (Retrieved on October 4, 2011.)
16. Afghanistan, India Inaugurate Friendship Dam. URL: http://www.dawn.com/news/12627 35/afghanistan-india-inaugurate-friendship-dam (Retrieved on June 6, 2016.)
17. The New Great Game. URL: http://www.dawn.com/news/1264242/the-new-great-game (Retrieved on June 12, 2016.)
18. Zamarayeva, N.A., Kitaisko-pakistanskiy ekonomicheskiy koridor i pozitsiya Indiyi [The Sino-Pakistani Economic Corridor and India’s Position]. URL: http://va.ivran.ru/articles? artid= 7258 (Retrieved on March 25, 2017.)
19. Indian Army Chief Calls for “Unconditional” India-Taliban Talks. URL: https://nation.com. pk/10Jan2019/indian-army-chief-calls-for-unconditional-india-taliban-talks (Retrieved on January 10, 2019.)
20. Zamarayeva, N.A., Vseafganskiy protsess primireniya: perspektivy i vyzovy [The Afghan Nation’s Peace Process: Prospects and Challenges]. URL: http://www.iimes.ru/?p=27432#more- 27432 (Retrieved on February 13, 2016.)
21. Zamarayeva, N.A., Pakistan i amerikanskaya strategiya v Afganistane i Yuzhnoy Aziyi 2017 i reaktsiya stran regiona [Pakistan and the American Strategy in Afghanistan and South Asia in 2017 and the Reaction of Countries in the Region]. URL: https://ru.journal-neo.org/ 2017/09/10/pakistan-i-amerikanskaya-strategiya-v-afganistane-i-yuzhnoj-azii-2017-g/ (Retrieved on September 10, 2017.)
22. Chinese Envoy Talk Polls, Peace Process. URL: https://thefrontierpost.com/hia-leader-chinese-envoy-talk-polls-peace-process/ (Retrieved on October 26, 2018.)
23. Zamarayeva, N.A., Pakistano-afganskiye otnosheniya v usloviyakh regional’noy transformatsiyi (2016-2017 gg.) [Pakistani-Afghan Relations under the Conditions of a Regional Transformation (2016-2017)], Pakistan: istoriya i sovremenniye problemy. Sb. st. [Pakistan: History and Contemporary Problems (2016-2017). Collected Articles], Institute of Oriental Studies, Russian Academy of Sciences, Мoscow, 2018, pp. 170-194.
Translated by Terence C. Fabian
Author: Vladimir Petrovsky
American-Chinese Trade Wars: Economics or Geopolitics?
Source: Far Eastern Affairs, Vol. 47, No.2, 2019, pp. 62-71
Abstract. The dispute between the United States and the People’s Republic of China over trade and economic issues has a long history. It has now become clear, however, that Donald Trump’s protectionist policy is in direct contrast to China’s consistent position in defense of free trade, based on the principles of the World Trade Organization (WTO). Washington sees in Beijing its main strategic competitor and has adopted a policy of long-term opposition to China in all spheres, including trade and economics. Having launched a trade war against China, the United States is also doing its best to weaken by noneconomic means their growing competition in the field of high technology.
Keywords: trade and economic relations, WTO rules and principles, protectionism, trade wars, strategic competition, dialectic of rivalry and cooperation.
Trade negotiations are increasingly often used as a political instrument. This is the first thing that comes to mind when one tries to understand what has happened around the trade war launched by the Trump administration against China. Geoeconomics and geopolitics are, of course, strongly intertwined, but is it “kosher” to use trade negotiations as an instrument of political wheeling-and-dealing, and why do we see this more and more often?
The dispute between the United States and China over trade and economic matters has a long history. It has now, however, become clear that Donald Trump’s protectionist policy is in sharp contrast to China’s consistent policy of defending free trade, based on WTO rules. The thesis of defending free trade, promoted by Xi Jinping at the Boao Forum in April 2018 was drawn up as early as the 19th CPC Congress and presented at the most recent forum in Davos.
This is what lies behind the conciliatory phrases in statements by Chinese representatives to the effect that China is not working toward perpetuating a positive balance of trade and is prepared to increase imports and improve conditions for investment and access to its financial and insurance markets, with the aim of stimulating domestic consumption.
The May 2018 visit to the United States of the delegation headed by Vice Premier Liu He of the PRC State Council, and the subsequent visit to China by U.S. Treasury Secretary Steven Mnuchin, were capped with the signing of a joint communiqué on trade and economic consultations. China and the United States agreed to take measures that would reduce the American trade deficit. It was assumed this would be done, on the one hand, by American goods and services satisfactorily meeting the demands of growing consumption in China, and by jobs and prerequisites for economic growth being created in the United States, on the other.
The two parties agreed to increase imports of American agricultural products and energy carriers, and to determine the areas for developing cooperation, encouraging mutual investment, and creating a fair and competitive business environment. It was also decided to continue high-level consultations on trade and economic issues (there is no such format between the United States and other countries).
In June 2018, the PRC State Council’s press office published a White Book titled China and the WTO to show how China was meeting its obligations within the organization; explain Beijing’s principles, position, policy, and proposals with respect to a multilateral trade mechanism; and to describe the concept and action plan for the country in conducting its policy of reforms and openness.
This document, which summarized 30 years of results from China’s efforts to become a major participant in the system of world trade, turned out to be highly appropriate under the conditions of the U.S.A.-China trade war. It stressed that the outburst of antiglobalist sentiment in recent years has, in combination with the growth of protectionism, created major challenges for the multilateral trade system of which the WTO is the heart. This clear hint aimed at the Trump administration, whose policy has led to trade wars not only with China but against Canada, Mexico, the countries of the European Union, and others as well.
In addition, the White Book presented some very interesting data on the American Chamber of Commerce in China, according to which around 60% of the enterprises in one survey continued to view China as one of the world’s best places for investment, while 74% of the Chamber’s members intended to increase their investments in the Chinese economy.1
By the summer of 2018, the feeling had arisen that at a minimum, any trade war would be delayed. Then, however, came the “summer escalation.” In June 2018, the White House announced the United States would impose customs duties of 25% on $50 billion worth of goods imported from China. These were intended to affect such spheres as the aerospace industry, information and communications technologies, robotechnology, industrial equipment, new materials, and automaking.
Beijing responded in kind, setting 25% import duties for American goods for exactly the same sum. The list contained 659 goods, for 545 of which the elevated tariffs were to take effect on July 6, 2018; no deadline was set for introducing tariffs on the remainder. The elevated tariffs were to be placed on agricultural goods, seafood, automobiles, medical equipment, and chemical products.
In response, Trump ordered a list of Chinese goods totaling $200 billion to be drawn up for the possible levying of an additional 10% in tariffs on them, should China raise duties on American products in the future as well.
Trump also stated that he planned to shut Chinese companies out of investing in high-tech firms in the United States, and to block additional exports of high technology from the United States to China. The natural question arises here: Were the American actions due entirely to economic motives? Does the United States really wish to sabotage the growing competition in the field of high technology by noneconomic means?
In 2015, the PRC government drew up the Made in China 2025 (MIC2015) strategy for industrial development, which gave priority to developing high-added-value production in the field of high technology. Up to 40% of all Chinese industrial goods were to be raised to this level by 2020, and up to 70% of all parts, components, and subassemblies in the aerospace, telecommunications, power generating, and processing industries by 2025.
The U.S. Foreign Relations Council labeled MIC2015 “a threat to American technological supremacy,” since it put American manufacturers at a competitive disadvantage. It was said that China would obviously force foreign companies to transfer technology in exchange for access to PRC markets and continue its conditions for doing business inside the country.
China’s explanation that MIC2025 was not a discriminatory strategy and did not have the goal of forcing American manufacturers out of high-tech industries, or that China would never wish to steal technology – just the opposite; it seeks cooperation with American companies that possess the latest in cutting-edge technologies and could help develop the Chinese economy under mutually beneficial conditions – simply fell on deaf ears.
It would seem the United States misinterpreted the key figures given in MIC2025 for import substitution (40% and 70%). These are not hard-and-fast indicators; rather, they are targets – goals used for strategic planning by all countries, including the United States itself (for example, in the Clinton administration’s National Information Infrastructure program, or the program for doubling exports under President Barack Obama).
It should once again be emphasized that the thrust of China’s response to the tightening of protectionism lies not in so-called countermeasures but in continuing the policy of openness and reform. China’s economic ascent and the laws of a market economy put everything into perspective.
In disputes with the United States, the Chinese were originally inclined toward compromise, since a retaliatory imposing of tariffs would only ratchet up the mechanism escalating the trade conflict. China knows from experience (including the economic sanctions following the events on Tiananmen Square) that raising the stakes by introducing countersanctions, harshening rhetoric, and so on, is entirely without promise. Here, incidentally, both Russia and China have something to learn.
A brief walk through history is in order here. January 2019 marked the 40th anniversary of official American-Chinese relations, something remembered mainly in Beijing. PRC Foreign Minister Wang Yi granted an interview on the topic, in which he presented China’s view on the experience and lessons learned from bilateral relations over the last several decades.
He noted in particular that the fear a powerful China might pose a challenge to or replace the United States is “a seriously mistaken strategic judgement.” The Foreign Minister also noted that as with other countries, there could be competition in China’s relations with the United States, but this should be “friendly rivalry and correspond to the principles of competition.”2
Washington has never had a problem with its satellite countries, which are tiny and dependent on the United States. However, the principle of America First! has always interfered in building relations with such countries as China and Russia.
This became especially obvious after the disintegration of the Soviet Union, when the Americans began talking about the “End of History” and their absolute world leadership. However, the United States was never to experience this imagined unipolarity, forgetting once and for all how to consider the opinions and interests of others. If the United States had earlier done its best to demonstrate its global leadership in one way or another, it now considers it a kind of fixture with which the rest of the world should simply come to terms.
At the same time, the United States failed to note and grasp how China’s peaceful ascent and the growth of its economic and political capabilities in the period of openness and reform changed this outdated picture of the world. China’s gradual transformation into a new superpower (in one joke, “China still isn’t Number One in the world, but it sure isn’t Number Two.”) is viewed by Americans with alarm and concern, and a desire to “restrain” a dangerous rival by any means possible.
We are not talking here about the rules of honest competition. Instead, anything needs dictate is allowed: attempts to achieve economic advantage by noneconomic means, imposing sanctions, hypocritical rhetoric in defense of human rights, and so on, and so on. And all of this against the background of both powers’ unprecedented trade and economic connectivity, and a gigantic volume of mutual trade turnover.
According to Joseph Nye, who originated the concept of “soft power,” interdependence is not a curse but a blessing, so long as it is used properly. It would seem, however, Washington has decided to ignore him, and the theory that economic interdependence between the United States and China will keep them from open conflict is, unfortunately, no longer being developed.
Washington sees Beijing as its main strategic rival and has adopted a policy of long-term opposition to China in all spheres. On October 4, 2018, Vice President Mike Pence delivered a sensational speech at the Hudson Institute, in which he said Beijing was interested in seeing President Trump turned out of office, and that the Chinese leadership was obviously making unprecedented attempts to influence the November mid-term elections to Congress and the next presidential campaign. Pence emphasized that these Chinese attempts to influence the American public were much more extensive than those “deployed by the Russians in 2016.”
After this, and against the background of other American attempts to accuse China of every deadly sin, the logical question arises: How serious is the deterioration of American-Chinese relations, and how long can it continue?
Fairly pessimistic prognoses have already been made. For example, Jack Ma, founder of the Alibaba Group, says the trade war between the United States and China could drag on for two decades. Ma notes that the current tension between the two countries over trade will most likely affect large Chinese companies very quickly. To avoid U.S. import duties, they will be forced to transfer their production to other countries.
How serious and long-term Washington’s protectionist intentions are can be judged from one of the clauses of the new agreement between the United States, Mexico, and Canada (USMCA), destined to replace the North American Free Trade Agreement (NAFTA). According to this provision, if any one of the three USMCA countries enters into a trade deal with a “nonmarket country,” the two others may withdraw from the agreement after six months and conclude their own bilateral trade deal.
Neither can anything good come of the anti-Chinese spy-o-mania campaign launched in the United States. According to (entirely unconfirmed) data from Bloomberg, the Chinese military conducted a massive cyber-espionage campaign, ostensibly to pressure local manufacturers of server equipment for American companies to place in motherboards chips “the size of a grain of rice” that are capable of intercepting data and downloading malicious codes into servers on command.
However, yet another walk through history is needed in order to grasp fully “how bad” and “how long” this could be. In his speech, Pence himself incidentally tried to perpetuate it by saying that China is playing “for the long term,” and in a “100-year marathon” has done much to acquire the image of a world power.
This means that with its many thousands of years of traditional strategic thought, Beijing truly knows how to wait and plan its development on a long-term basis. If one partner or another (in this case, U.S.A.) tries to upset this, a wide variety of steps could be taken, from patient attempts to reach agreement to harsh countermeasures and readiness to simply outwait an undesirable American administration.
In his speech, Pence incidentally noted that American-Chinese relations could simply be “torpedoed,” and made it clear Washington would not cross over “the red line.” He mentioned in particular that the United States would in the future adhere to the principle of “one China,” although he considered Taiwan’s political model to be better for the Chinese people.
In terms of recent history, the American Vice President recalled the events of the late 1990s, when the United States seriously believed that after the fall of the Soviet Union “freedom in China would expand in all forms.” These expectations (based partially on the internationally televised events on Tiananmen Square in June 1989, the first attempt at a color revolution in contemporary history) proved to be unjustified.
China made the historic choice of continuing its market reforms while keeping a one-party system to maintain stability and prevent the country’s collapse. Chinese leaders were not about to sacrifice political stability and the country’s territorial integrity to the demands of accelerated political modernization.
This was followed by harsh American sanctions that China knew how to survive. Despite opposition from the United States, it was even able to join the WTO more quickly than usual, and on its own terms. Pence, however, complained that “America agreed to give Beijing open access to our economy, and we brought China into the World Trade Organization.”
If attempts to contain China’s economic development failed then, they are even less promising today. China knows how to wait; its opponents can win battles, but they can hardly win the war. This most likely means the current period of deteriorating bilateral relations could be comparatively short (if Washington recognizes the uselessness of pressuring Beijing) and equal to how long the Trump administration remains in power.
Against this background, the meeting between U.S. President Trump and PRC Chairman Xi Jinping at the G20 summit of November 30-December 1, 2018 was categorized as a “temporary trade ceasefire.” Each side presented its interpretation of the results from what had been achieved. Donald Trump called his relationship with Xi “great” and presented the results from talks with him as meeting the American conditions: Washington would not be raising tariffs on $200 billion worth of Chinese imports as of January 1, 2019, while Beijing would “buy more U.S. products, based on market demand.”
On his part, the PRC Chairman said the heads of the two countries had arrived at a consensus on halting the introduction of new tariffs and ordered economic groups to step up consultations on reaching a concrete and mutually beneficial agreement aimed at lowering all tariffs. He stressed that Beijing was prepared to open markets, expand imports, and help in mitigating the corresponding trade and economic conflicts between China and the United States.
The Chinese government agreed in particular to lower or abolish tariffs on automobiles imported to China from the United States, which can be as high as 40%. Beijing officially announced that on the whole, China will actively expand imports (by way of, e.g., holding the first China International Import Expo) to satisfy the consumer needs of its people. It was noted in the closing documents of the G20 summit that China would lower its general level of tariffs from 9.8% to 7.5% in four rounds of adjustments during 2018.3
Because of the American-Chinese trade war, the world economy continues to be in a state of chaos (according to IMF estimates, the world GDP could fall 0.75% by 2020, due to the increased trade tension between the two countries. The key points of contention between Washington and Beijing over the future of the world’s trade and economic system remain unresolved. Trump’s slogan America First! fundamentally contradicts the views of Beijing, with its own growing economic might, on the state and future of the international trade system, based on the central role of the WTO.
It is sufficient to recall the recent APEC summit in Papua-New Guinea, which did not end with the signing of the traditional joint communiqué, due to the inability of the American and Chinese delegations to agree on the appropriate wording. If the Americans would not eliminate their remarks on protectionism, which upsets world trade, the Chinese refused to delete theirs about “unfair trade practices,” which would supposedly lead to the same result.
We should not, however, believe the narrative devised by the Western media on this matter. They claim that while the trade and economic giants clarify their relations, the rest of the world is standing by and waiting to see how it all ends. The thesis of the equal responsibility of the United States and China for the future of world trade does not stand up to scrutiny: the latter favors strengthening the central role of the WTO and its norms and principles, which postulate battling protectionism. Meanwhile, the White House has yet to explain to the rest of world what exactly “unfair trade practices” are.
Attempts by the U.S. administration to restrain China’s economic growth to the benefit of American supremacy, particularly by using trade restrictions to block implementation of the Made in China 2025 strategy, are likely to continue. However, it is worth noting the Chinese commentaries on the meeting in Buenos Aires, according to which the development of Sino-American relations demands that “friction between the two countries should be settled in good faith.”4
However, the ink had barely dried on the commentaries of those who viewed the Buenos Aires meeting between Trump and Xi as a ceasefire in the trade war when something occurred that was reminiscent of hostage-taking and the opening of a second front. The detaining in Canada of Meng Wanzhou, the Chief Financial Officer of the Chinese telecommunications giant Huawei, under pressure from the United States, became a full-fledged international scandal with far-reaching consequences.
U.S. federal officials demanded that Canada extradite Meng and presented Huawei with a list of 23 charges that included industrial espionage, financial fraud, violation of sanctions, and obstruction of justice. Acting Attorney General Matthew Whitaker announced the charges had been brought in both New York and Seattle.
In response, China’s Ministry of Foreign Affairs urged the United States to rescind the order to arrest Meng and “to avoid going further and further down a mistaken path.” Whitaker’s qualification that the charges were made not against China but in regard to a specific company was hardly convincing. In a statement by a representative of China’s Foreign Ministry, it was emphasized that the United States “has been using state power to smear and attack specific Chinese enterprises, destroying the legitimate operations of the companies,” and that “there is strong political motivation and manipulation behind it.”5
Other countries, and Russia in particular, have already encountered this more than once; it is sufficient to recall the cases of Bout, Yaroshenko, and the Russian hackers who, legally or illegally, were extradited to the United States and handed over to American justice.
This is why Russian Foreign Minister Sergei Lavrov, while noting that Russia will take no part in the American-Chinese trade war, stated “this is another example of a policy that has been rejected by the overwhelming majority of normal countries and peoples: a policy of extraterritorial application of national laws.” He went on to say “This is very arrogant, great-power politics that no one supports. It is being rejected even by the closest allies of the United States. They should put an end to this.”6
The problem was undoubtedly the American authorities’ dissatisfaction with the operations of Huawei itself. The Wall Street Journal reported that the U.S. Justice Department had long been investigating the company’s violations of American sanctions against Teheran. Matters went much farther than sanctions, however. The Americans accused Huawei (as they did earlier with China’s ZTE) of potential threats to the security of telecommunications networks, allegedly stemming from attempts to use tracking devices. The United States demanded from its closest allies (primarily Canada, Great Britain, Australia, and New Zealand, with which it had created the Five Eyes system for the joint gathering and use of intelligence data) that they refrain from including 5G technologies developed by Huawei in their tenders for government purchases.
There are grounds for assuming that the main issue is not ensuring security but a simple desire to avoid competition. Huawei has become a generally recognized leader in the development and application of 5G technologies and equipment on which the future will depend: the Internet of Things, smart cities, driverless automobiles, and much else. Since technologies and equipment are accompanied by the standards for their use, a behind-the-scenes battle is being waged to force the 5G standards developed by Huawei out of world markets.
So far as the claim “They should put an end to this!” is concerned, the question is: How? The extradition of detainees to the United States formally proceeds within the confines of national law, but upon American request (often accompanied by rude and humiliating pressure from American authorities that is normally hushed up).
There is also the American Congress’ historic practice of scrutinizing and unilaterally altering signed international treaties and agreements during their ratification. This is also a pure manifestation of J William Fulbright’s “arrogance of power.”
The issue can be raised in the UN Security Council, where any examination of it can be blocked by the representative from the United States. However, there remains the moral and ethical aspect of the current political practice with which work begins on the corresponding norms of international law.
If China, Russia, and other countries with similar claims were to submit a draft resolution On the Unacceptability of Attempts by UN Member Countries to Extend the Norms of National Law Extraterritorially, it would surely receive enthusiastic support from the overwhelming majority of UN General Assembly members – with the possible exception of the dozen or so most zealous followers of Washington’s policies.
Why is the Huawei story unfolding now? Is it not associated with the competitive battle over 5G communications network standards in the world market? Huawei Technologies produced the world’s first chip whose conductivity exceeded that of its predecessors by 2.5 times. In addition, 5G base stations can be erected in half the time of their 4G analogs. Huawei Technologies has already signed 30 commercial agreements on 5G technology and delivered more than 25,000 5G base stations around the world.
There is obviously an attempt under way to quash competition by any means necessary. In mid-January 2019, it was revealed that the United States intended to limit the operations of Chinese telecommunications companies. An Executive Order was drawn up calling for restrictions “over national security concerns” for those telecommunications companies that have ties to the PRC government and do business in the United States.
This was against the background of constant accusations against Chinese companies (including Huawei) of stealing American technologies and intellectual property. Huawei, however, calmly denies this. It has long been investing its efforts and money in the basic sciences and technologies. According to a company statement, “We were the first to make a breakthrough in the key technologies of the broad commercial use of 5G.”7
Open extortion and attempts to employ foreign economic means are unacceptable in trade negotiations. Events show the Chinese must cultivate strategic patience in order to bring trade and economic negotiations to an end and reach a deal. China is interested in this so that the trade war does not distract it from solving strategic problems associated with the growth of the economy and strengthening its position in the world trade.
It is thought this is where the key lies to understanding how U.S.A.-China relations look now and what lies ahead for them. Resolving differences is a possible and necessary prerequisite for revitalizing relations between the two world powers. The system of a multipronged strategic dialog of which they were once so proud, and into which they invested so much time and effort, is breaking down increasingly often under Donald Trump and needs a reboot. Beijing is aware of this; we must continue to hope that Washington grasps it as well.
Traditional thoughts on how the enormous mutual trade turnover and close trade and economic connectivity of the United States and China ensure against an escalation of rhetoric and conflict are not living up to expectations. However, if the two sides manage to devise a mechanism for resolving differences, making a really big trade deal would revive both American-Chinese relations and the world economy.
Beijing is calling on its American partners to remember the dialectic of cooperation and collaboration, noninterference of politics into economics, and honest competition and observing the rules of the game. China is consistently building its relations with the surrounding world, including the United States, based on the principle of mutual benefit and mutual respect for national interests.
Along with everything else, China’s attempts to establish evenhanded and respectful relations with the United States is one part of its efforts to create a new world order based on multipolarity. By developing relations of a reliable strategic partnership with China (which will not grow into a military and political alliance), Russia too is playing a far from minor role in this.
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