China, Japan, and the US

[Bert]

It seems the quest for resources these days as it relates to the middle east
appears to be growing or at least more contentious in the news.  China and
Japan are seeking access to resources and are becoming definite competitors.
I wonder whats going to happen in a few years with the US, the EU, Russia,
China, and Japan (the big energy consumers) all jostling around with their own
concerns.  We should throw them into "BMQ" and make them learn to work
together for a change.  Anyway, another stratfor special.



Japan, U.S.: A Mutual Strategic Concern
www.stratfor.com

Summary

Japan and the United States will meet Feb. 19 for "two-plus-two" talks on the
alliance between the two nations. It has been widely leaked that the joint
statement to be released at the end of the meeting will for the first time
include a clear delineation of Taiwan as a key strategic issue for Japan.
This only vocalizes moves Japan already has taken in association with the
United States to encapsulate Taiwan in the Japanese defense sphere. While
these moves clearly show that the United States considers China the greatest
threat to its interests in East Asia, the Chinese leadership senses a
long-term opportunity for an alliance with the United States against Japan.

Analysis

Japanese Foreign Minister Nobutaka Machimura and Defense Agency Director
General Yoshinori Ono will meet with U.S. Secretary of State Condoleezza Rice
and Secretary of Defense Donald Rumsfeld for "two-plus-two" talks on the
alliance between the two countries. It has already been leaked that the joint
statement issued at the talks' conclusion will include a declaration that
Taiwan represents a mutual strategic concern -- a change for Tokyo, which
previously preferred to let such things go unsaid.

While Beijing obviously will react to this news with consternation, it is
unlikely the Chinese leaders are surprised. As Stratfor noted in October
2004, Washington and Tokyo already were discussing the movement of fighter
aircraft to Shimoji, a location that brings them within striking distance of
the Chinese coastline opposite Taiwan. Not long after, rumors emerged that
Taipei was funding some of the new air base's construction through indirect
channels and by letting the United States divert money from Taiwanese defense
support to the airfield work.

The acknowledgement of Taiwan as a strategic interest of Japan appears to be
rather late in coming. Eighty-five percent of Japan's energy supply comes
from the Middle East -- and is shipped through the South China Sea right past
Taiwan. This has long been a reality, but until now, Tokyo was content to let
the United States bear the brunt of providing protection and security to
Taiwan. Since the end of the Cold War, however, Tokyo has become more
aggressive in asserting its own defensive capabilities and priorities.

Japan has moved to add in-air refueling capabilities, extended its assistance
to the Untied States in the Iraq war (including supplying U.S. warships and
deploying noncombat troops to Iraq), begun developing and deploying its own
spy-satellite network and linked itself to the U.S. development of regional
missile defense systems. Japan has sought to increase its maritime security
cooperation along its main energy supply line -- working with India and
Singapore among others -- and it is actively reviewing the constitutional
constraints on its military.

For Beijing, these represent troubling moves. While the United States still
stands as China's main global competitor, Japan is a next-door neighbor --
and one with a history of less-than-peaceful relations with China. Beijing
sees the growing assertiveness of Japan as a challenge, but also as a
potential opportunity. While Washington and Tokyo have a mutual interest in
keeping China from embarking on any regional military adventurism or from
becoming the dominant player in East Asia, Beijing sees room for cooperation
with Washington based on a potential mutual threat from Tokyo.

Japan is the world's second largest economy, and its interests do not always
appear to mesh with those of Washington -- such as on the question of energy
supplies from Iran -- so Beijing hopes eventually to capitalize on the
likely, but less apparent, point at which the United States and Japan move
from being global partners to global competitors.

Whether Washington sees this potentiality -- or views it as a threat -- is
unclear, but the U.S. government obviously views China as a clearer and more
present danger, and is working with allies in the region to step up the
containment of the Middle Kingdom. Tokyo's overt moves to firm up its
security relationship with Taiwan, then, further tighten the noose around
Beijing and may instigate more rapid and creative responses from the Chinese
leadership as it seeks to counter the containment ring now closing in.

 

[Bert]

EU: Visions of Profit, Strength in Chinese Arms Market
www.stratfor.com

Summary

The European Union's 15-year-old arms embargo on China looks set to be lifted
formally within just a few months. Only a couple of EU members have expressed
reservations on selling certain types of military equipment to Beijing, and
most countries are rubbing their hands together in anticipation of lucrative
sales. When it comes to Europe and money, the United States can do very
little to stand in the way.

Analysis

Leaders of European Union member countries likely will agree to end a 15-year
arms embargo on China during a March 22-23 meeting. The lifting of the ban
probably will not formally occur for another few months, but EU defense firms
are salivating at the prospect of selling to the rapidly modernizing Chinese
armed forces. When the embargo ends, it will expedite China's quest to
develop a high-tech army.

For EU defense firms, China is the ideal customer. It has plenty of money for
procurement, desire to purchase top-of-the-line equipment and the willingness
to participate in cooperative manufacturing and training agreements, and it
could provide another "pole" to challenge the United States. Washington will
try to influence European military sales to China, but will be unable to do
much. The ties between some EU members and China are strengthening, and money
is largely the driver.

EU countries enacted the arms embargo after the 1989 Tiananmen Square
massacre and maintained it because of lasting concerns about human rights
violations in China. The embargo, part of the Council of Ministers
Declaration on China, is not official EU policy and member states are free to
break it. Although some states -- including the United Kingdom and France --
have sold military equipment to China, those items have mostly been
nonlethal, "dual-use" items for civilian and military purposes.

For several years, however, China has been pushing to get the embargo lifted.
Beijing is in the middle of a decades-old effort to modernize its army and
has been buying billions of dollars worth of weapons and equipment to that
end. Russia and Israel are currently China's largest suppliers; however,
Israel will not offer certain items due to pressure from Washington, and
Russia often withholds technology from China for national security reasons.
EU countries -- some far from being controlled by Washington (and eager to
prove it) and none of them bordering China -- do not necessarily share these
concerns.

The United States does not want a better-armed China for two reasons. First,
Washington fears that a powerful Chinese military might try to reclaim
Taiwan; and second, the United States -- along with other countries,
including Japan -- is anxious to box China in politically, economically and
militarily to prevent it from becoming a strategic threat.

Even countries that consider themselves staunch U.S. allies have been immune
to pleas by U.S. President George W. Bush to reconsider lifting the embargo
(made most recently at a Feb. 22 meeting between Bush and EU leaders in
Brussels). British diplomatic sources indicate that London wants to lift the
ban, as some major British defense firms are part of European Aeronautic
Defense and Space Company (EADS), Europe's defense conglomerate that is among
the frontrunners to win Chinese arms purchases. Poland, another U.S. ally,
also likely wants the embargo ended and began ramping up arms production in
2004 in anticipation of increased exports.

Of course, not every European defense firm will participate in a China
free-for-all; at least one major company, the United Kingdom's BAE Systems,
has expressed reservations about operating in China because of heavy U.S.
pressure. Washington might also attempt to stymie some sales on a
case-by-case basis.

EU defense sector sources say China is not interested in items such as
aircraft (like Dassault's Rafale fighter), which it can easily purchase from
Russia and reverse-engineer into its own designs. China instead wants to
acquire radar and sonar systems, missiles and fuel-efficient jet engines --
all of which European companies are willing to sell. But, the sources
caution, Beijing has yet to tell the Europeans exactly what it wants,
preferring instead to be presented with a full display of European systems
for sale and then picking and choosing what it wants, rather like a child in
a candy store. Defense sector sources also say negotiations and meetings
between EU defense firms and the Chinese government already are in progress.

Almost as important as military equipment sales -- indeed, almost more
important -- is the potential for follow-on cooperation between the European
Union and China. Purchase agreements probably will contain clauses requiring
cooperative manufacture and training programs between the vendor and Beijing
-- for example, the vendor's establishment of a factory in China to build its
products, or the training of Chinese workers and troops in the vendor country
in the construction and use of the equipment.

Europe is eager to get to China for several reasons. Some EU states have a
geopolitical interest in helping China rise to compete with U.S. global
hegemony. Europe and China are far enough apart that Europeans have little
concern about a threat from Beijing. Europe also believes that only the
emergence of several rivals will be able to constrain the United States as a
superpower, and the EU sees China as one of those rivals.

Not only will a major buyer boost Europe's defense industry, it also will
provide the Europeans with further entre into other Chinese markets. High oil
prices and a weak dollar have hurt Europe's export-driven economy since the
latter half of 2004, whereas China -- the world's No. 1 consumer country with
a rising middle class -- has huge potential. France is especially keen to
sell military equipment to China, having lost major client Iraq after the war
there and facing competition in other markets from the United States, the
United Kingdom and Russia.

Certainly, European military sales to China will not significantly compete
with Russian sales -- after all, the Europeans are only offering what the
Russians do not. Small components such as radar systems and jet engines might
not seem major, but used together -- and combined with existing Russian
technology -- they have the potential to greatly modernize the Chinese armed
forces.

Unfortunately for Washington, its attempts to keep the embargo in place will
fail. The economies of EU member states -- especially the EADS countries
(France, Germany, Spain and the United Kingdom) -- witnessed another year of
slow gross domestic product growth in 2004, continuing a trend they are eager
to halt. Military sales to China are a chance for Europe to expand one
industry that could potentially bring in billions of dollars. As one Pentagon
official said, "The French would sell a hand grenade to a 5-year-old if he
could pay for it." Despite U.S. warnings that a better-armed China represents
a global threat, money is the Europeans' top priority now.

 

[tomahawk6]

Do you actually think that arms sales to the PRC will significantly improve the economies of France and Germany ?
Germany has +12% unemplyment. France isnt much better. The economies of old Europe are stagnant. The real beneficiary of arms purchases will continue to be the Russians. The PRC continues to improve its amphibious capability. The latest deal is for the Zubr hovercraft which can carry a variety of loads - 3 MBT's or 2 MRLS. The cost per craft is $10 million. Even a dozen of these would give the Taiwanese defense planners fits.


http://foxxaero.homestead.com/indrad_068.html

 

[Bert]

I think France and Germany want to keep their defence workers happy.  Defence supplier contracts mean
jobs, an employed workforce, and somewhat more stable domestic politics.  China will win big by
receiving the technology/hardware and then shorten the technological disparity with the US.  The
chinese own, lease, or control many ocean gateways (Suez, Panama, interests in Africa and South America)
and this could restrict US carrier group movements. 

The US, Russia, and the Cold War grew out of the consequences of WW2.  China, as it emerges from
old communist ideas and hungry for resources and status, is a different more invigorated competitor.

I don't know about these Stratfor articles.  After reading this, I get the impression the world is like
a bucket of crabs.  If one tries to climb out of the bucket, another clamps on its leg and pulls it
back down.