China's strategic objective: 富國！強兵？

The brightest politican of the modern era is perhaps Lee Kuan Yew. It is a major shame that he was only allowed to run the tiny city state of Singapore. Had he been given the mandate to run Malaysia, or ASEAN, or even China, I wonder how different this world will be today.

My respect for Mr Lee is not only from what he has accomplished, but also from how he has reasoned and what he has deduced. There are critics who discounted Lee's achievement by saying that Singapore is easy to manage because it is small. I do not agree. If you read what he writes and hear what he says, you would know that he makes decision based on reasons. Reasoned decision making goes a long way. It will bring him success whereever he is.

Since Lee has also openly asked for US presence in the area, continuously, it make his analysis on China's strategic objectives even more credible (especially to the "China-skeptics").

Below is an essay Mr Lee has written on Forbes about a month ago. He has explained why China's strategic's objective is in improving the country's general economic and technological (which are related) competitiveness, and why it does not make sense to challenge US militarily. He then backed it up with his conversation with different generations of Chinese leaders who had demonstrated that they understand this.

The example of the USSR was quoted. The reasoning is actually quite simple, especially after the lesson of the USSR, so simple that I do not think anyone would disagree, as follows,

1. Technology determines modern warfare, investing in military means investing in technology
2. Technology changes fast, and becomes obsolete quickly
3. It does not make sense to invest in military technology if you are not going to use it soon (this is like buying the top of the line PC and put it into storage for a few years)
4. Therefore, one should only invest in technology know-how, and where technology could bring you more wealth/resources so that you could further improve on your technology

In other words, the traditional Chinese proverb of "enrich the country and strengthen the army(富國強兵)" is one that is probably mis-understood by most. What it really mean is "only after one enriches the country and can one strengthen the army(先富國而後能強兵)". It has never meant to be two parallel objectives (except, perhaps when it was "pretended" to convince a king who is eager to defend his country). If you read the original writing in the Spring-Autumn era such as Shang Yang, you would see the logical sequence of the two. In other words "strengthen the military" is only a secondary objective, or a result of "enriching the country". With the current speed in technology advance, it cannot be "pretended" any more.

That is why the increase in China's military spending has mainly gone into paying for salaries of its staff (they are underpaid) and a small portion in keeping abreast of modern technology (in the spirit of marginal return, analogous to buying a low end PC "just in case"), or low (but strategic) investments such as 'shooting down its own satellite from the ground'.

What my readers (or the China-skeptics) may not agree is probably that the leaders in Beijing are rational in their judgment. Lee said they are, through his personal experience with them. IMO It would be ignorant to think that the Chinese leaders do not understand this basic element of ancient Chinese "statecraft". Read the whole essay below.

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Contest for Influence in Asia-Pacific
Lee Kuan Yew

18 June 2007
Forbes Asia
Volume 3 Issue 11

China has been courting its neighbors, and although the Chinese did not coin the phrase "soft power," they have exercised it with consummate skill. Only the U.S. and Japan have expressed concern and asked China what its intentions are regarding its increased military spending and its firing of a missile into space to shoot down one of its own satellites. China's other neighbors appear unconcerned, a measure of its soft-power success. Most of these countries are focused on China's growth, anticipating the economic benefits in trade and investment it will bring them. For example, China's voracious appetite for energy and other natural resources is feeding an economic boom in Australia, and, like other countries in the Asia-Pacific region, Australia wants China's growth to continue without disruption by conflicts over Taiwan.

China has concluded a free trade agreement with the ASEAN countries. But because of domestic pressures, Japan and India have so far been unable to match the ASEAN-China FTA. China's decision making is based on strategic considerations that override such competing domestic interests as importers versus exporters and agriculturists versus industrialists. China wants ASEAN countries to link up, to ride its boom and hitch their economic futures to China's, but Japan's and India's decision-making processes don't allow their governments to override such internal conflicts of interest.

China has been taking steps to avoid conflicts and improve relations with its neighbors. For instance, Premier Wen Jiabao visited Japan and addressed the Diet, knowing that Japan's Prime Minister, Shinzo Abe, wants to remove pacifist clauses in the constitution so Japan can adopt a more assertive foreign policy. Using warm and conciliatory language, Wen invited Japan to join with China in realizing a "peaceful coexistence, friendship for generations, mutually beneficial cooperation and common development." The Japanese media hailed his speech as "historic." Premier Wen told Chinese residents in Japan: "I did a lot of preparation. [I wrote] every sentence myself, and I did all the research work. Why? Because I feel our nation's development has reached a critical moment. We need to have a peaceful and conducive international environment."

Despite these words, Japan and the U.S. worry that China's increased military spending heralds a more aggressive foreign policy. However, I don't believe China will blunder into competing against the U.S. militarily.

In the mid-1990s China's General Liu Huaqing, then deputy chairman to Chairman Jiang Zemin at the Central Military Commission, told me that he had gone to Leningrad in the 1950s to learn how to build a navy. I commented that the Soviets made clumsy weapons. He corrected me, saying that the Russians made weapons that were as powerful as any made in the West. The Soviets' mistake, he said, was in investing too much in military technology at the expense of general technology and the civilian economy. Hence, the U.S.S.R.'s collapse. Vice Premier Qian Qichen underscored this view in his memoirs, Ten Episodes in China's Diplomacy, when he cited a former Soviet Central Committee leader, Yegor Ligachev, as saying that the Soviet Union had "wasted large amounts of capital on strengthening national defense and assigned its best brains with the best equipment and materials to this unproductive sector."

Striving for Competitive Advantage
To become competitive China is focused on educating its young people, selecting the brightest for science and technology, followed by economics, business management and the English language. Its goal: to become a modern technological power by the second half of this century. But China knows it is well behind the U.S. in R&D and lacks the entrepreneurial culture that drives a creative and dynamic economy.

Other leaders in Asia believe that the U.S. economy will remain the world's most powerful and vigorous economy and that its technology will remain the most advanced. They believe the balance of power will not change. However, because they expect China to become the world's biggest economy by 2030--with India not far behind--they want to avoid antagonizing the two giants.

In the competition for economic and political clout the U.S. has enormous strengths. Although its population (300 million) is less than a quarter of China's (1.3 billion), U.S. GDP ($12.4 trillion) is six times China's ($2.2 trillion). Moreover, private consumption constitutes 70% of U.S. GDP but only 38% of China's. More FTAs would further open the U.S.' more attractive market. However, the recent protectionist mood in Congress will likely hobble the Administration once President Bush's fast-track Trade Promotion Authority expires July 1.