x Abu Dhabi, UAEMonday 22 January 2018

China's ambitions are unlikely to remain in port

A Chinese naval contingent will berth this morning at Port Zayed in Abu Dhabi. It will be the first such visit, but it is unlikely to be the last in the region.

A Chinese naval contingent will berth this morning at Port Zayed in Abu Dhabi. It will be the first such visit, but it is unlikely to be the last in the region. Beijing's deployment of a naval force in the Gulf of Aden in 2008 and 2009 to protect Chinese ships is only the forerunner of an expanding presence in the region. And the signs are that China's preoccupations with events immediately beyond its shores will give way to a more assertive presence on the world stage.

The historical behaviour of other growing economic powers is one such indicator. The historian Paul Kennedy argued in his 1989 book The Rise and Fall of Great Powers that a country with a growing economy prefers to become wealthy instead of funnelling its economic output into the military. Decades later, however, economic expansion will require a commitment to ensure access to markets and raw materials. Of course, whether that will prove to be true of China as well, remains to be seen.

China's own history provides evidence of an assertive national character. The boundaries of China as we know them have been defined through periods of expansionism. Before the century of humiliation, from the mid-19th century to 1949, China was a dominant power, demanding and receiving tribute from other kingdoms in the Far East, Central Asia and South East Asia in exchange for its umbrella of protection.

It is hardly surprising that the Chinese would want to regain this position in Asia. In many periods of its history, imperial China was the dominant actor in regional affairs. At various times it controlled massive swathes of territory, and had an abundance of natural resources within its reach. With rare exceptions, it did not need to project its military might against neighbours to maintain its sphere of influence.

But China has had territorial disputes. After the military crackdown in Tibet in 1959, China fought a series of border skirmishes with India, culminating in the Sino-Indian War in 1962. In 1974, the country and Vietnam contested for control of the Paracel Islands, one of many sore points that it still has with its neighbours. Today, most of China's neighbours are strong trade partners. China entered what was heralded as the largest free trade pact in the world with 10 other nations in South East Asia earlier this year. But by keeping the value of the Chinese currency, the yuan, fixed, while others allow their currency to float, Chinese exports to the West are kept cheaper than those of their neighbours. The United States has made the most noise about this but it may be developing nations who have the most to lose. The US is not the only aggrieved party, but its loud reaction to China's stance on currency underscores its concern over China's growing power and influence. If any Cold War-style confrontation develops between the United States and China, it will be waged largely over markets rather than ideology.

That has a direct bearing on the Middle East. Half of China's crude imports already come from the region, mostly from Saudi Arabia, and its dependence on the region's oil is only projected to increase. China's policy of economic engagement with little political interference is likely to continue for the foreseeable future. Its relationship with Iran will probably remain the same even if imports of Saudi or UAE oil rise.

In the past five years, giant Chinese oil companies have signed deals worth $120 billion, as well as one in 2004 that secures China 10 million metric tons of liquefied natural gas per year from Iran's Yadavaran oilfield for the next 25 years. In all likelihood, Beijing has learnt from US mistakes regarding the Arab-Israeli conflict, and will steer clear of any interference. Chinese leaders realise that meddling would only antagonise both parties and could possibly cause anti-Chinese sentiment in the region, damaging its economic interests.

For now, China will likely focus its energy on doing business rather than on mediating conflicts. There is little doubt that Chinese foreign policy is driven by economic priorities, with a main priority on securing energy resources across the globe. But wherever its thirst for oil drives it, China runs the risk of conflicting with US interests. The Asian giant is a global power on its way to becoming a superpower. Even conservative forecasts tell us that two decades from now, China's economy is likely to equal or surpass that of the United States, its military will be strong enough to stand against America, its energy demands and imports will increase.

For these reasons, the dragon is not likely to remain quiet. Instead, it is positioned in direct competition with the US. The two countries will be locked in a struggle to secure markets, energy resources and maintain a global balance of power. It may at first bear little resemblance to the Cold War of the last century, but the stiff competition between two great global powers seems all but inevitable.