China released a “white paper” on March 31st accusing the United States of making the region more “volatile.” China claims that Washington’s web of alliances and military forces across Asia pose security challenges.1 If China decides to act on them, these accusations could create potential economic problems for the U.S.
One way that China could react is by discontinuing the purchase of US treasury bonds, an action that would threaten the U.S. economy and the ability of the U.S. government to function, as it relies on the sale of treasury bonds as a source of income. If that occurred, the U.S. government would likely raise interest rates to offset the loss of debt funding. Higher interest rates would slow the U.S. economy, pushing the recession even farther “under the water.”2
This economic scenario would only happen though if China viewed American actions as threatening. China has promised only to retaliate if the U.S. threatens them3 – giving the U.S. the opportunity to back down. According to University of Kansas International Relations Professor Anna M. Cienciala, China only sees states as threatening if they threaten China’s sovereignty by trying to intervene in China’s right to govern via communism or to claim Chinese territory.4
China lists Taiwan, the Korean Peninsula, and Arunachal Pradesh as three of the major problem areas.5 In Taiwan and the Korean Peninsula, China fears the U.S. will threaten China’s communism by replacing communism in North Korea with democracy, which China sees as imperialism.6 China sees American values of civil and political rights as corroding communist emphasis on economic and social rights. The U.S. remains adamant about not provoking conflict in Taiwan7 or the Korean Peninsula.8
Arunachal Pradesh, a territory that borders Tibet, is viewed as problematic as well because China believes that India originally stole this territory from China. China claims that India will want to sovereignty over Tibet as well. Because the U.S. has been supplying weapons to India, China fears a potential invasion from India.9 India though is reluctant to start a war with China, so this potential threat will likely not materialize.10 11
Taiwan, the Korean Peninsula, and Arunachal Pradesh represent three potential obstacles to a strong US-China relationship. This analysis will further examine each of these threats to China’s sovereignty.
China fears the U.S. will aid the Democratic Republican Party in Taiwan, known as the Kumintang (KMT), in overthrowing the Chinese Communist Party (CCP).12 China believes the KMT represents foreign imperialists, who oppressed the Chinese people.13
After the 1901 Boxer Rebellion, China opened itself to Western thought as a means to arm itself against imperialism. One school of thought that became dominate was that of the KMT,14 who ushered in an era of democratic republicanism. The weakness of the KMT was revealed after they signed the Treaty of Versailles, which gave Japan the right to rule Shantung, a territory formerly under control of China.
Chinese became disenfranchised and clung to ideas of Marxism a philosophy despised by the West. Marxism gave China the power to fight their oppressors. The leaders of the Chinese Marxist party – the Chinese Communist Party (CCP) – Li Dazhoa and Mao Zedong– gave the Chinese peasant masses exactly what they wanted – a peasant revolution where the peasant became the proletariat of China. Mao fought for the masses. In contrast, the KMT failed to educate the peasants and began using bribery and blackmail to win support.
The CCP not only gave the Chinese effective national unity, real independence, and freedom from foreign domination, but social-economic reform as well, especially ending the feudal system. After the CCP drove the KMT off of mainland China, the KMT fled to an island off southern China (now known as Taiwan);15 the CCP viewed this action as occupying their territory.16 China now sees any support of Taiwan as promoting illegal occupation of territory.
The Obama administration (similar to past administrations) though supports China’s “One China” policy. The “One China” policy maintains that China and Taiwan are one. The U.S. would only get involved militarily if China coerces Taiwan into changing politically. Although the U.S. continues to sell light defense weapons to Taiwan, the U.S. is not selling more than usual. In fact, the U.S. recently refused to grant Taiwan the visa fee waiver. The U.S. has not signed a trade agreement with Taiwan either as a sign of support of China’s sovereignty in that matter.17
The U.S. knows any advancement in military affairs on Taiwan will provoke China into war because China cares about safeguarding communism. In fact, their principle to safeguard communism is so important to them that China even protects North Korea – a nuclear threat.
The sole reason China got involved in the Korean War was to protect its communism. Mao decided to ally with Russia in attacking South Korea because Mao knew the U.S. was not interested in an independent China. After the Treaty of Versailles when the U.S. gave Japan Shantung, China knew the U.S. wanted to dominate them.
China, thus, saw North Korea as the best buffer against American democracy in South Korea. China’s dealings in North Korea revolve around their fear of a foreign invasion of the Korean Peninsula.18 Yet, American policy on North Korea offers little threat to Chinese fears of losing communism in North Korea. U.S. and South Korean officials are resistant to responding militarily to North Korean provocations of a nuclear weapon and international scuttles that could spin out of control.
Former North Korea CIA analyst, Bruce Klingner describes the situation in North Korea saying, “Even if you do a tactical level retaliatory response, you have to be prepared to go all in, in that you cannot guarantee that it won’t lead to an all-out war on the peninsula. And because of that slippery slope, there is the constraint against really doing anything militarily.”19
American desire to avoid conflict in North Korea reveals that this fear of China’s will most likely not materialize. A similar situation exists for the Arunachal Pradesh threat.
China fears the loss of Tibet, which they see as a grave injustice. China feels they should get Arunachal Pradesh as part of Tibet. China rationalizes that since Britain stole Tibet from them by forcing Tibet to open relations with Britain in 1904, China is the rightful government of Tibet.20
Arunachal Pradesh region lies between Tibet and India, and China fears India’s build up of troops along the border indicates India’s intention to invade Tibet.21 China feels that Britain illegally helped India take Arunachal Pradesh by enforcing the Simla Accord, which demarcated Arunachal Pradesh to India during its independence without the KMT’s signature. China’s belief is that India wants Tibet, since it already has Arunachal Pradesh.
China uses the example of the 1962 Indo-China conflict where they claim India invaded Tibet. China also cites India’s harboring of the Dalai Lama as evidence to prove India wants Tibet.22 China fears American involvement because India uses the weapons the U.S. gives them to amass troops along the border. Nonetheless, India has not attacked China and is unlikely to engage in a costly war unless provoked, as in the 1962 Indo-China dispute.23 Again, similar to the other perceived threats, this threat will most likely not materialize.
Because the U.S. does not meet China’s definition of a threat, China is not likely to cut economic relations with the U.S. The U.S. has not violated the first part of the definition as seen in the examples of Taiwan and North Korea. Furthermore, Washington did not violate China’s second part of the definition of a threat because American ally, India, does not intend to invade Tibet.
Even if China did end economic relations with the U.S., the U.S. would rely on increased interest rates to compensate, but it would be difficult. As of now, Chinese investment in U.S. treasury bonds pay for America’s budget deficit, but the public could feel the burden of this debt should China stop investing in U.S. treasury bonds.24
China could easily do without U.S. treasury bonds. China only has U.S. treasury bonds as payment for goods they export to the U.S., which only amounted to US$296 billion in 2009 – not enough to put a huge dent in the Chinese government should China decide to withdraw their investments. This would give China the ability to withdraw their investments should they feel threatened by the U.S. and create panic in the stock market.
China could easily afford withdrawing their investments because there are other countries to place their investments.25 The crucial question remains whether China will keep its promise not to attack first.
1 Bristow, Michael. “China white paper highlights US military ‘competition.’” BBC. March 31, 2011.
2 McArdle, Meagan. “What a Crisis Looks Like.” The Atlantic. April 25, 2011.
3 “Chinese military paper lays bare fears about US.” Taipei Times, April 1, 2011.
4 Cienciala, Anna M. “The Chinese Revolution and Chinese Communism to 1949.” University of Kansas, December 5, 1999.
5 “Chinese military paper lays bare fears about US.” Taipei Times, April 1, 2011.
6 “Chinese military paper lays bare fears about US.” Taipei Times, April 1, 2011. and Bajoria, Jayshree. “The China-North Korea Relationship.” Council on Foreign Relations. October 7, 2010.
7 “Obama to retain Taiwan policy.” Asian Values. December 21, 2010.
8 Conroy, Scott. “Obama’s Tough Line on North Korea Faces Limits.” Real Clear Politics. December 1, 2010.
9 Singh, Naorem Bhagat. “Shrouded in Mystery: Indo-China Border Issues.” Society for the Study of Peace and Conflict. November 7, 2009.
10 Karl, David J. “Military Buildup: Is There a Strategic Direction?” Foreign Policy Blog. December 14, 2010.
11 Prasad, Eswar S. “U.S.-China Economic and Security Review Commission Hearing on ‘U.S. Debt to China: Implications and Repercussions.’” Brookings Institute. February 25, 2010.
12 “Chinese military paper lays bare fears about US.” Taipei Times, April 1, 2011.
13 Cienciala, Anna M. “The Chinese Revolution and Chinese Communism to 1949.” University of Kansas, December 5, 1999.
14 Hooker, Richard. “Ch’ing China: The Boxer Rebellion.” Washington State University. July 14, 1999.
15 Cienciala, Anna M. “The Chinese Revolution and Chinese Communism to 1949.” University of Kansas, December 5, 1999.
16 “Chinese military paper lays bare fears about US.” Taipei Times, April 1, 2011.
17 Dumbaugh, Kerry. “Taiwan-U.S. Relations: Developments and Policy Implications.” Congressional Research Services. November 2, 2009.
18 Salman, Andrew. “China’s support of North Korea grounded in centuries of conflict.” CNN. November 26, 2010.
19 Conroy, Scott. “Obama’s Tough Line on North Korea Faces Limits.” Real Clear Politics. December 1, 2010.
20 Hessler, Peter. “Tibet Through Chinese Eyes.” The Atlantic Online. February 1999.
21 Naorem, Bhagat Singh. “Shrouded in Mystery: Indo-China Border Issues.” Society for the Study of Peace and Conflict. November 7, 2009.
22 Hessler, Peter. “Tibet Through Chinese Eyes.” The Atlantic Online. February 1999.
23 Singh, Naorem Bhagat. “Shrouded in Mystery: Indo-China Border Issues.” Society for the Study of Peace and Conflict. November 7, 2009.
24 McArdle, Meagan. “What a Crisis Looks Like.” The Atlantic. April 25, 2011.
25 Prasad, Eswar S. “U.S.-China Economic and Security Review Commission Hearing on ‘U.S. Debt to China: Implications and Repercussions.’” Brookings Institute. February 25, 2010.