An Empire and its nervous periphery

My article An Empire and its nervous periphery appeared last week in the Edit Page of The Pioneer

Here is the link...

China has been expanding its boundaries to fulfil its dream of becoming the world’s most powerful nation. But the picture is not rosy. Resentment among the best of China’s friends is growing

Since the new Emperor sat on the throne in Beijing in 2012, the Middle Kingdom has steadily extended its influence in the periphery of the Empire. The CPC proclaims today: “The great rejuvenation of Chinese nation is an unstoppable historical trend that won’t be diverted by the will of any individual country or person.” The CPC has a dream: For its 100 years in 2049, it wants China to be the most powerful nation in the world. But if one looks at the Empire’s neighbourhood, all is not rosy and resentment has been created everywhere, even amongst China’s best ‘friends’.
Take Pakistan, whose friendship is deeper than oceans and sweeter than honey; according to The Tribune, the border trade with China through Khunjerab Pass resumed last week after a three month gap.  The reason? A traders’ strike against a Web-Based One Customs system newly introduced at the Pakistan-Xinjiang border. The newspaper explained: “The decision to end the strike took place during a meeting held in Gilgit under the supervision of the Army. Traders had blocked the strategic Karakoram Highway which is a part of the multibillion dollar China Pakistan Economic Corridor project.” It is obvious that not everyone is delighted by the largesse of the all-weather sponsor, particularly  inhabitants of Gilgit-Baltistan and Baluchistan.
A similar phenomenon is happening elsewhere. Last month, The Washington Post published a long investigative piece on Sihanoukville, a new city of 90,000 inhabitants, which has been developed by China in Cambodia. The number of Chinese tourists doubled in a year to 120,000 in 2017, according to The Post: “Restaurants, banks, landlords, pawnshops, duty-free stores, supermarkets and hotels all display signs in Chinese. The Cambodian government has allowed extraordinary levels of Chinese investment...Thirty casinos have already been built, and 70 more are under construction.” The Blue Bay casino promotes itself as “one of the iconic projects of China’s One Belt, One Road initiative.” The smallest studios start at $143,000, while the most prized apartments cost more than $500,000. The Post continued: “With the exception of those working in the hotels and casinos, most Cambodians, whose average income is $1,100 a year, are seeing little benefit from this investment. And resentment is mounting.” It is the pet project of Hun Sen, the Cambodian Prime Minister, who has been ruling for the past 34 years, “his willingness to be embraced by China is most evident,” said the US newspaper.
As a result, serious tensions have appeared between the new landlords and the locals. As The Financial Times put it: “Cambodia is not alone in weighing the mixed blessings of Chinese investment, which elsewhere has been welcomed for its scale and relative lack of conditions attached. What is unusual about Sihanoukville’s transformation is that tension in the town has coalesced into a public backlash — unusual in a country where personal freedoms are fading.”
Vietnam, too, is caught between the generous Chinese investments and the nationalists’ demands to not bow to Beijing. The South China Morning Post reported: “Earlier this month...more than 1,000 workers went on strike at a Taiwanese shoe factory in Ho Chi Minh City in southern Vietnam, blocking a highway.” The workers were singing: “We don’t want to give any of our land away to China, not even for one day.” They protested against their own Government’s plan to set up three new special economic zones where foreign companies (read China) would be granted decades-long leases. Later the protests swept across Vietnam.
The Hong Kong paper said: “Police shut down protests in urban centres, and at times clashed with demonstrators, including in Binh Thuan province near Ho Chi Minh City, where protesters burned police vehicles and defaced Government buildings.…Production stopped at multiple Chinese — and Taiwanese — owned factories across the south of the country.” Hundreds of demonstrators had gathered, holding up banners shouting: “I love my fatherland — don’t let China lease our land.”
Already last year, Forbes titled a report as  “Violent Protests Against Chinese ‘Colony’ In Sri Lanka Rage On.” In January 2017, as the first brick of a Southern Industrial Zone was laid in Hambantota, violent protests erupted in the new port. It left more than 10 people hospitalised and many others were sent to jail. According to an  economic newspaper: “A group of demonstrators led by Buddhist monks from nearby Amabalantota took to the streets as the opening ceremony of the industrial zone took place. However, these protesters were met by mobs of Government supporters, who reputedly attacked them with clubs and fists. The monk-led demonstrators fought back by throwing rocks. The police, meanwhile, found themselves in the middle of the fray, using water cannons and tear gas.”
The reason for the protests was the handing over of the port to the Chinese; “the perceived loss of autonomy to a foreign power as well as the potential land grab that could be necessary to build the 15,000-acre industrial zone.” One can wonder if Nepal has thought of this aspect of the Chinese ‘generosity’. Last month, Prime Minister KP Oli visited Beijing and told Xinhua that Nepal attached great value to its relationship with China “which has always respected its sovereignty, territorial integrity and independence”. During the visit, it was announced that China would build a railway connecting Tibet with Nepal. It was one of several bilateral deals signed during the Nepali Prime Minister’s visit. The rail link will connect the Tibetan city of Shigatse to Kathmandu, Nepal’s capital, via the border port of Kyirong. According to a Chinese official website, the two sides further signed 10 other agreements involving technology, transportation, infrastructure and political cooperation.
Nepal has also inked a $2.5 billion deal with China’s state-owned Gezhouba Group to build a hydropower facility in the west of the country. The China Daily quoted Li Keqiang, the Chinese Premier, saying: “China would also like to work with Nepal to build a ‘cross-Himalayan connectivity network’ through aviation, trading ports, highways and telecommunications.”
It sounds good, especially in Kathmandu,  but as I was finishing writing this piece, a Twitter message came in saying, “A Chinese rubber factory in Talgar, Kazakhstan, burned by locals today.” Talgar is located some 20 km from Almaty, the Kazakh capital. Here too resentment is growing. The moral of the story: There is no free meal and a nation like Nepal will sooner or later realise this, even if the Chinese dishes are appetising to start with; in fact the Indian food may be less tasty, but it definitively leaves less hangovers.

Modi’s Vietnam outreach marks India’s new assertive foreign policy

My article Modi’s Vietnam outreach marks India’s new assertive foreign policy appeared in NitiCentral.

Here is the link...

Modi was clear about the ‘aligned’ policy when his Government decided to sell to Vietnam Brahmos short range cruise missiles (co-developed with Russia), a long-standing demand from Hanoi. The Congress Government had been hesitant, hiding behind reservations by Russia.

Prime Minister Narendra Modi has invented a new concept in Foreign Policy, ‘Assertive Alignment’.
Take Vietnam for example.
At the end of the meeting with the visiting Vietnamese Prime Minister Nguyen Tan Dung, Modi asserted: “Our defence cooperation with Vietnam is among our most important ones. India remains committed to the modernisation of Vietnam’s defence and security forces. This will include expansion of our training programme, which is already very substantial, joint-exercises and cooperation in defence equipment.”
Modi was clear about the ‘aligned’ policy when his Government decided to sell to Vietnam Brahmos short range cruise missiles (co-developed with Russia), a long-standing demand from Hanoi. The Congress Government had been hesitant, hiding behind reservations by Russia. Modi was not shy to tweet: “My Government has promptly and purposefully intensified our engagement in Asia Pacific region, which is critical to India’s future.”
India is also likely to coach Vietnam Air Force pilots in flying Sukhoi SU-30 fighter planes. Quoting a source, The Times of India asserted: “The training would be on the pattern of the ‘underwater combat training’ already underway for Vietnamese sailors at the Navy’s submarine school in Visakhapatnam since October 2013.”
Perhaps touchier for Beijing, the two countries will also work on joint oil exploration in the South China Sea, a region disputed by China.
This comes after Narendra Modi’s visit to the United States where he reiterated that Washington was India’s ‘natural’ ally.
We have come a long way from the Krishna Menon days and his obsession with the American ‘imperialists’.
After their dinner at the White House, Prime Minister Narendra Modi and President Barack Obama issued a vision statement and wrote a joint editorial whose theme was ‘chalein saath saath’ (‘forward together we go’).
The joint editorial published on The Washington Post, while invoking Swami Vivekananda and Martin Luther King Jr., emphasised: “India and the United States are bound by common values and mutual interests.”
It speaks of India and the US building ‘a transformative relationship’, again far from the often aggressive stance of Nehru towards the United States.
Two days after Modi had left the US, Phil Reiner, senior director for India in the National Security Council at the White House declared that Modi’s meeting with President Barack Obama had ‘re-energised’ the strategic relationship between the world’s two largest democracies: “I would say that the assessment on our part is that the PMs visit was extraordinarily successful. It has provided a boost in terms of the vision and focus that we have for our bilateral relations,” he stated.
Narendra Modi also met some of the US top business leaders who promised to invest in India. In a survey, the US-India Business Council (USIBC) found that US businesses were ready to commit $42 billion over the next two-three years. IANS reported that what added to the investor confidence was Prime Minister Modi being very conversant with the business ‘nuts and bolts’.
The Prime Minister’s visit to Japan too was a special one. Modi’s first bilateral meet outside the subcontinent was also an ‘aligned’ exercise.
Interestingly, there was a cultural and spiritual dimension to the visit.
Whether it is Swami Vivekananda, Rabindranath Tagore or Netaji Subhas Chandra Bose, many great Indians have been associated with Japan in the past and became admirers of Land of the Rising Sun.
Then, Modi reiterated his alignment with some of India’s neighbours, Nepal and Bhutan. Regarding Modi’s visit to Thimbu, The Times of India reported that Modi has “stepped up a charm offensive with neighbours to try to check China’s influence in the region.”
Before leaving, the PMO had released a statement putting the visit in perspective: “Bound by common interests and shared prosperity, India and Bhutan enjoy a unique and special relationship, which has been forged by ties of geography, history and culture. Therefore, Bhutan as the destination for my first visit abroad as Prime Minister is a natural choice. Relations with Bhutan will be a key foreign policy priority of my Government.”
All these moves demonstrate a more pro-active and ‘aligned’ foreign policy. Even with less ‘aligned’ nations, assertive engagement has been the motto.
When President Xi Jinping and his wife Peng Liyuan, landed in Ahmedabad on September 17, they had a taste of Modi’s hospitality first hand, a flavour of the friendly culture of Gujarat (as well as its delicacies) on the banks of a clean Sabarmati river.
Both India and China wanted to show the world that the two most populated countries of the planet can live harmoniously together.
Of course, the next day, the Chumar incident took place and Modi’s India had to remind the Chinese President of its position on the LAC. Whether the incident was the outcome of differences within the PLA or not, Delhi remained firm on the ground, while ‘engaging’ China.
It is perhaps time for historians to have a deeper look at India’s non-aligned policy.
Officially, the Non-Aligned movement came into being during the Conference of Heads of State or Government of Non-Aligned Countries, under the Chairmanship of the Yugoslav president, Josip Broz Tito in September 1961 in Belgrade.
It seems that the term ‘non-alignment’ was coined by VK Krishna Menon, the Indian (Communist) Representative to the UN during a speech in New York in 1952. Menon could obviously not have been ‘non-aligned’.
However, it is probably in Bandung in 1955, that Nehru firmly decided to go for the policy of ‘non-alignment’. The conference of Asian and African states, hosted by Indonesian president Sukarno brought together several ‘Third Word’ leaders and the Machiavellian Zhou Enlai. With most participants heavily tilting towards Soviet Union, the conference adopted a ‘declaration on promotion of world peace and cooperation’ and a collective pledge to remain ‘neutral’ in the Cold War.
Nehru was greatly influenced by his ‘friend’ Zhou Enlai, the Chinese Premier who also swore by the Five Principles (Panchsheel), which became the ideological foundation stone of the Movement. The principles such as ‘Mutual respect for each other’s territorial integrity’ or ‘Mutual non-interference in domestic affairs’ were music to the ears of the Chinese Premier, who thus could keep at bay those who were tempted to come to Tibet’s defence. Four years earlier, the Roof of the World had been invaded by a neo-imperialist China; it was indeed a very clever move on the part of Zhou!
The end of the non-alignment came on November 19, 1962 when a panicky Indian Prime Minister shot two missives to the US President imploring him to help his country.
Modi’s new Indian assertive foreign policy, ‘aligned’ with friends as well as less friendly countries, is refreshing. We are living in an interdependent world, and ‘non-alignment’, apart from the fact that it never served India’s interests, is not suited to the 21st century; ‘alignment’ and ‘engagement’ are.

Democracy comes to China ...by sea

A runway of 2700 meters for tourists or the military?

The Chinese media recently reported about 'a tiny Chinese prefecture coming out of the water' (in South China Sea).
On July 17, probably in response to Vietnam's advances in the area, China officially created a new prefecture, responsible for administering 'its' territories in the South China Sea.
The prefecture is called: Sansha, 'san' meaning three and 'sha' is an abbreviation for the three groups of islands in the area, Xisha (Paracel Islands), Zhongsha and Nansha (Spratly Islands). 
The new administrative center is located on the island of Yongxing (also known as Woody Island), the largest of the Paracel Islands, occupied from 1932 by the French and then by the Japanese, and finally by the Chinese. It is also claimed by Vietnam as part of its territory.
The particularity of the new town: it has an area smaller than a Chinese university campus (2.13 km2) and a population of 444 inhabitants (in 2010).
It will however admister the largest and most southerly area of the People's Republic of China.
Residents of Sansha are mostly military and government officials. 
According to Xinhua, Beijing has set up an organizing committee to create a legislative body for Sansha.
The committee was set up by the Standing Committee of the Hainan Provincial People's Congress in Haikou, capital of China's southernmost island province. Xinhua says that the Committee will organize the elections for the first municipal congress which will have 60 'directly elected' delegates.
Can you believe it!
It is the State Council, China's cabinet, which approved the establishment of Sansha to "improve China's management of the region and help coordinate efforts to develop the islands and protect the marine environment".
Wu Shicun, the Director of the National Institute for South China Sea Studies told the Chinese news agency that the fishermen, the oil-gas, and tourism resources in the South China Sea would thus be better protected.
Beijing would like Sansha to administer some 200 islets, sandbanks and reefs of the Paracel, Zhongsha and Spratly Islands, covering 13 km2 in island area and 2 million km2 of water.

But there is another story.
Xinhua also reported that China's central military authority has approved to form and deploy a military garrison in the newly established city of Sansha.
It affirmed: "Sources with the People's Liberation Army (PLA) Guangzhou Military Command said that the Central Military Commission (CMC) had authorized it to form a garrison command in the city."
It added: "The garrison command will be a division-level command under the PLA's Hainan provincial sub-command, responsible for managing the city's national defense mobilization, military reserves and carrying out military operations. The PLA's Sansha Garrison Command will be under the dual leadership of the Hainan provincial sub-command and the city's civilian leaders."
Does it mean that the PLA in Sansha will be under an 'elected' government?
It would be a first in China.
Why not to replicate the experiment in the Tibetan autonomous prefectures?

The Realizing Power of Symbols

One remembers that on June 11th, 1963, a 66 year old Vietnamese Buddhist monk, Thich Quang Duc calmly walked to the center of a busy Saigon intersection and set himself aflame.
Some of his friends had taken a jerry can of petrol from a car and poured it over Quang Duc, who had begun meditating in padmasana.
A mala in his right hand, Quang Duc lit himself the fire; he was soon engulfed in flames.It marked the beginning of the revolt against the Diem regime who fell a few months later. 
Duc's last words were: 

Before closing my eyes and moving towards the vision of the Buddha, I respectfully plead to President Ngo Dình Diem to take a mind of compassion towards the people of the nation and implement religious equality to maintain the strength of the homeland eternally. I call the venerables, reverends, members of the sangha and the lay Buddhists to organise in solidarity to make sacrifices to protect Buddhism.

Yesterday's images of Duc, like today's pictures of the Tibetans monks and nuns immolating themselves, have a great symbolic power in their struggle for justice. 
In fact, they have a Power of Realization: through these pictures, the prayers and aspirations of these monks and nuns will eventually materialize.
Do the Chinese regime understands this?

 

   

 

Is War inevitable?

This article on the site China-defense-mashup says that a war  between Vietnam and China is inevitable. 
The stake is the oil of the South China Sea.
The reserve are anywhere between 105 to 213 billion barrels of liquid gold deposited in the region—well-exceeding 80 percent of the entire Saudi kingdoms' reserves, according to Chinese estimates, says the author of the article.
One remembers that in 1979, China decided to invade Vietnam  and ultimately got 'a bloody nose' (some 20,000 Chinese PLA soldiers died).
Strangely, the Sino-Vietnamese War started a month after the beginning of China's 'opening'.  
On December 18, 1978 , Deng Xiaoping climbed the rostrum for the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China to declare an open policy.
This decision was to change the face of China forever.
But the question comes: why to start a War against its arch Communist enemy Vietnam at that particular time? 
This has never been elucidated. 
And why to attack Vietnam when Indian Foreign Minister Atal Bihari Vajpayee was on official tour in China (the first of a senior Indian official after 1962 Sino-Indian War). 
I quote here from Vajpatee Statement in the Rajya Sabha on February 20: 

May I recall to the House that after the reports of the massive attack by the Chinese troops across the Sino-Vietnamese border, the Prime Minister had, on February 18, issued a statement of our reactions to these developments? The Statement expressed our profound shock and distress at the outbreak of hostilities which could endanger international peace and security. It also made an earnest plea for the immediate restoration of peace and, as a first step towards cessation of hostilities, underlined the urgent need for the withdrawal of Chinese forces from the Vietnamese territory.

I myself heard of these developments late in the evening of February 17, when I was 29 in Hangchow, through a news agency report and the international radio network. As I was not near any of our diplomatic missions, I tried to gather as much firm information as possible. When reports confirmed these grave developments, I decided immediately to cancel the remaining programme of my stay in China and sought the help of the Chinese authorities to get to Hongkong and to return to India the same day.

Our serious concern at these developments was conveyed to the Chinese authorities in Peking through the Chinese Ambassador to India, who was accompanying our party on the tour in China early on February 18 before we left Hangchow.

The situation in Indo-China has been tense and inflamed for the last few months. This had caused set back to the process, which at one time looked hopeful of co-operative relations being developed in the South East Asian region. Being already a serious focus of tension, the situation in Indo-China figured at some length in my discussions with the Chinese leaders in Peking. The Chinese side, in explaining their viewpoint, had mentioned that there were provocations and threats along their border with Vietnam.

From my side, I had even then expressed our concern at the possibility of deterioration of the situation and its dangerous consequences. I sought to impress on the Chinese leaders that any escalation would be serious and urged that the problem should be solved peacefully through negotiations. I added that the aggravation of tensions in an already complex situation could be a setback to stability in South-East Asia and endanger international relations in general.

According to the Vietnam official statement conveyed to the Ambassadors of various countries in Hanoi on February 17, China had used troops, tanks, long range artillery and war planes for the attack along the entire length of the border. They had occupied border posts along the border in the Vietnamese provinces of Long Son, Hoang Lien Son, Lai Chau, and Quang Ninh.

In any case, as stated by the Prime Minister, we are distressed and shocked at these developments. The present aggravation of the situation is and must be a matter of grave concern to the entire international community. This escalation, with massive armed incursion across the Sino-Vietnamese frontier, must be arrested and reversed as soon as possible, lest there should be further widening of the conflict and danger to world peace.

Vajpayee concluded: 

I should like to add that India has long admired Vietnam for its heroic struggle against the heaviest possible odds for its national independence which culminated eventually in victory against imperialism and intervention. We had responded as generously as to any country and as quickly as any nonaligned nation, to take a hand in the gigantic task of economic rehabilitation and national reconstruction which faced the Socialist Republic of Vietnam. We remain as committed as ever to develop friendly relations with Vietnam.

We want to eventually see peace and stability made secure so that nations in their independence can resume economic cooperation in the region. India had no ulterior interest in South East Asia, but as in the case of the Indian sub-continent, we would like to see the chapter of outside competitive involvement come to an end.

Today, a War can certainly be avoided; if all parties decides so; in any case, it is far from certain that China would win so easily. 
Another interesting 'coincidence', Deng Xiaoping had called Gyalo Thondup to Beijing in February to find out a way to sort out the Tibetan issue. 
When I asked Gyalo Thondu: "When you met Deng Xiaoping in 1979, did you know that Vajpayee was there about the same time? It was the first visit of an Indian minister after 1962 war?", the Dalai Lama's brother remembered: 

Yes, Mr Vajpayee visited China and at the same time, a war between Vietnam and China started and the Indian Foreign Minister cut his trip short. I was supposed to proceed to China with the permission of His Holiness the Dalai Lama and because Mr Deng Xiaoping had asked me. Some of my friends in Hong Kong told me: “Don’t go, China and Vietnam are fighting a war. It would be very dangerous.” I told my friend: “No matter how much danger, I will not cancel my trip because I already promised Mr Deng Xiaoping. I had the permission of His Holiness and I had told Mr Deng Xiaoping that I was coming, so I went”.

I waited for him because he was not in Beijing. He had gone to Guangzhou to be operated and he directed the war from there. So, I had to wait in Beijing for one month. I had a very good time, I visited all the places, though I am quite familiar with Beijing in 1946/47 I was there for a long time.

Since this fateful month, no progress has been recorded in the relations between the Dalai Lama and the leaders of China.
The "Open Policy' was economic only.


Why A War Between China And Vietnam Is Inevitable
August 2, 2011
China-defense-mashup
Now Much to China's dismay, the South China Sea dispute has become an open-house party: the US is invited by many to host the show, and even China's arch rival India will tag along. The biggest allure for the party is oil, anywhere between 105 to 213 billion barrels of liquid gold deposited in the region—well-exceeding 80 percent of the entire Saudi kingdoms' reserves, according to Chinese estimates.

1.The Inevitable
The regional mess proves Beijing's policy of "shelving disputes and developing jointly" is a total failure. In Territorial Disputes, sovereignty is a fiat currency solely backed by the economic and military might. Otherwise it's simply bluff. Diplomacy and Economic ties alone will never win China the south China sea.
To solve the territorial dispute, Sino-Vietnamese war seems inevitable. It's also the most cost-effective way for China to sort out the mess once and for all. The only thing that matters right now is the timing and how the US will factor in this event. We are going to look into the dynamics how this volcano is going to erupt:
The fragile Vietnamese economy hugely depends on the South China Sea oil production, which accounts for 30% of its GDP. Vietnamese economy will collapse if it loses its oil assets in the region. Vietnam is in dire straits: The inflation is running rampant while the consumer price index rose 20.82 percent in June from a year ago, the fastest pace since November 2008; The bank system is teetering with bad loans amid tight monetary conditions and busting economic bubbles; the widening trade deficit has eroded the country's foreign-exchange reserves—estimated at $12.2 billion at the end of 2010, down 53% from the peak of $25.8 billion reached February 2008, which will deter foreign investment, worsen liquidity and increase systemic insolvency. All this will seriously aggravate social unrest and threaten the communist regime. Therefore, Stoking tension with China will be a good way for Hanoi to direct national grievance away from its domestic mismanagement and vindicate its legitimacy of rule with patriotism and even war. To Hanoi, the South China Sea is worth shedding blood for.
Now let's look at this from Washington's perspective: the diminishing American economic influence in Asia-pacific will force the US to sustain its engagement with the region in alternative capacities, for example, maintaining military power balance. China now serves as the hub for the region's global supply chain, gobble up components, commodities and capital goods and is coming into its own as a vital pillar of support for the region's economies, particularly at a time Western demand is lagging. "According to ASEAN statistics, China's trade with ASEAN has jumped six-fold since 2000 to US$193 billion in 2009, surpassing that of the US. China's share of Southeast Asia's total commerce has increased to 11.3 percent from 4 percent in that time, whereas the US's portion of trade with the bloc fell to 10.6 percent from 15 percent. During that time, ASEAN's trade plus with China widened by five times to US$21.6 billion. The bloc reported a US$21.2 billion trade surplus with the US in 2009, down 12 percent from 2000." China is also a very important source of investment and the largest source of foreign tourists in the region. Meanwhile, Asia today is the region with the highest increase in defense spending in the world, and that combined with China's skirmishes over territory disputes with Japan, Vietnam and Philippine, etc. present the US Military–industrial complex with a grave challenge and perfect opportunity. The South China Sea dispute offers the US a golden opportunity to come back to Asia, talk about friendship, energy deals and arms sales.
Now let's look into the stakes for Beijing: the energy-intensive nature of Chinese Economy will underwrite the assertiveness of China's south China sea stance and naval force buildup. " China's oil reserves have shrunk almost 40 percent since 2001 as the economy expanded 10.5 percent a year on average, according to data compiled by Bloomberg." "Currently China depends on foreign imports for over fifty percent of the oil it consumes, and half of this imported oil is from the Middle East." However, the Arab Spring and stand off between the US and Iran have intensified the volatility of the region to the extent that China must diversity its energy supply. China's rapid economic development, expanding middle class population, motorization, and urbanization will aggravate its thirst for energy even further: IEA has predicted that China's dependence on foreign energy will increase to over 60-70 percent of its total consumption in 2015. The fragile state of its energy security will leave China with few options but securing its oil supply more and more from the South China Sea. Failure to do so will not only threaten China's status as World Factory but also its future survival. Furthermore, any concession on the sovereignty will seriously undermine CCP's legitimacy of rule while it faces serious calls for democracy and freedom of speech. It is well known that China suffered a lot of humiliation, territory loss and slaughters in past wars with foreign countries. Nationalist sentiments are abundant for the government or the anti-government to tap into when necessary. CCP can't afford to lose such a powerful initiative when it can tip the balance of. power.
All these variables will play out until we smell the blood and gun powder rippling across the South China sea.

2.The Conclusion
Yes, It's true that Vietnam has tried really hard recently to make the South China Sea dispute an open-house party as crowded as possible. It's crying out loud for the US's interference, flirting with India against China and ganging up with the rest of ASEAN to beef up the offensive. Even so, no matter how fancily Hanoi plays the game, the deciding factor is still the substance of American support.
To Washington, it is of course very important to contain China's burgeoning influence. However, it won't be in the US's strategic interest to include as many players as possible and exclude China from its coordinated alliance, because nobody knows for certain how far the US can come near Asia in 50 years, but it is certain that China will be a huge player in Asia for a thousand years. Without China's cooperation, the US will sooner rather than later lose its strategic relevance in Asia. Let's have no doubt about that
Moreover, Vietnam shouldn't expect too much of the US. Washington at best can act as a buffer, deterrent and arms dealer between waring parties. It won't directly engage China in the war in the foreseeable future, because the US dominates China with its superior naval and air force and the only way for China to level the playing field is to apply nuclear weapons. The nuclear nature of Sino-American warfare will make both the world no.1. and no.2 economy the fallen giants. The world can be effectively dominated by the Sino-American alliance if the two countries establish the mutual trust to cooperate. Nevertheless, if that window of opportunity passes in a war, the US and China will both be destroyed and at best become the also-runs just like Russian, Germany and France.
Washington's most urgent task is to tackle the fiscal deficit, trade deficit and unemployment. As the US's biggest trading partner and financier, China will play the biggest role in American renaissance. As the world's biggest creditor for dollar liabilities, China will be pivotal to sustain the dollar's status as world reserve currency. The pillar of the US superpower lies on the dollar's world reserve currency status, because the operation cost of a superpower can't be sustained by fiscal policy, which is often comprised by partisan politics while most emergent. That's when you can count on the monetary relief of the fed. Without dollar's world currency status, such relief won't exist. In such a scenario, the importance of China is self-enforcing.
So Vietnam will be left to its own devices in the war cause the US's priority lies somewhere else. It's good to see the last two outstanding communist regimes fight against each other. In the end whoever owns the South China Sea will need the superior expertise and technology of American oil companies. It's good to be America when there's no losing scenario.
For China, it is very important to defeat Vietnam. It will serve as a wake-up call to Philippine among other contenders and remind them of the false hope for unrealistic American engagement. Furthermore, unlike Philippine, Vietnam shares land borders with China. So China's attack against Vietnam won't be restricted by sea. It also can utilize its superior land force to invade Vietnam. Chinese army has plenty of ground warfare experience against Vietnam in previous two wars. It can destroy Vietnamese infrastructures and facilities to sustain the war and economic growth, and bring about the regime change or a civil war in Vietnam. That's the only cost-effective objectives for the army but not the costly occupation. Leave the chaotic Vietnam to Vietnamese themselves. A dissolved Vietnam will need another 50 years to muster enough strength to strike China.
Once the dust settles, China and the US can jointly exploit the rich oil and gas resources in the South China Sea. ExxonMobil, Chevron and Shell will be all over Spratly Islands.

3.The Winner & Loser Scenario
Some people say China will lost the war. But it doesn't really matter.
It doesn't need to win a war to win.
I call this a limited invasion: destroy Vietnamese infrastructures and facilities to sustain the war and economic growth, and bring about the regime change or a civil war in Vietnam.
Vietnam's communist regime is standing on the edge while the economy is melting down and people are thinking of unrest and democracy.
China should never consider occupation as an objective. Once the damage is inflicted enough to deprive Vietnam of the ability to sustain a war with China and bring about Vietnam's economic collapse and domestic chaos, the PPL should withdraw. The Vietnamese communist regime will fall on its own sword and too busy with internal turmoil to wage a war against China.
I also call this a Scalpel Invasion. Once the objective is achieved, the army should retreat like Scalpel needs not to stay in the body after the operation is performed.
This will be the difference between the Chinese and American Vietnam war.
The mentality of modern war should be changed. A loser in the war can still be a winner in the overall game. Sometime it shouldn't be about simply inflicting military damage and casualties. It could be about destroying the enemy's economic growth, energy supply and production, food supply and production, and water supply. The ensuing famine, chaos and economic collapse will decapitate the adversary ruling structure, causing political and social earthquake, and even civil war and many other internal turmoils. The repercussion of such strategy far outstrips the performance any conventional war ideology can deliver, especially in the upcoming Chinese Vietnam War. It's good enough to render the enemy paralysed in the economic, societal and governmental meltdown. This is what I call limited surgical warfare with permanent damage.
The "win or lose" should not be about military honor. It is only about the bigger game.

4.The Irony, American Interest and where to bet your money
If the war does break out, the money will flee Asia, not to embattled Europe but to the US. Without increasing interest rate, the US will enjoy abundance of capital inflow as a safe haven. The Treasury will drop the Yield and still sell like a breeze. The gold price will shoot through the roof. However, the oil price will be confusing and go both ways because the global production will scale back when the world manufacturing powerhouses in Asia are swallowed by war and chaos. Those companies whose profits and growth hugely depend on Asia will jump the shark. However, the good news is many factories will be relocated to the US, which will greatly improve the employment in the US. Not to mention the US can sell billions of dollars worth of weapons to waring parties in the meantime. It's a good day to be America by simply watching Asia burn.
As a lecturer in Economics at the Beijing Royal School, Dee Woo first gained international attention by writing a personal letter to Barack Obama in October 2010, attempting to dissuade the US from initiating a trade war with China. As a result, he was featured in much of the Mainland Chinese media, as well as in Hong Kong, Singapore, Macao, Malaysia, Canada and the US, including by the Wall Street Journal. He has gone on to publish numerous commentaries in many influential newspaper and magazines in Mainland China, Singapore, Taiwan and the US, and is a regular columnist for Forbes China and CIO&CEO. He can be reached at http://about.me/deewoo and http://twitter.com/dee8woo
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