Saurav Raj Pant
China is rising and rising. Yet, China faces some key challenges which may halt its ambitions for becoming a sole international player. To become key international player, one of the significant factor is to overtake is on oil independency. Petro-dollar politics is very complicated. So, China should be independent of oil production. China dependency on oil from Saudi Arabia is a big problem. It imports a considerable amount of oil from Saudi Arabia including Iran. As per Forbes, China’s crude oil imports numbered at around 9.5 million bpd of which Russia held the largest share at 16%, followed by Saudi Arabia 12%, Iraq at 11% and Angola at 9%. China imports around 43% from the Middle East via Strait of Hormuz and 82% of all Chinese oil imports passes through the Strait of Malacca. Strait of Hormuz—where the US naval base is present; is protecting the US vested interest and Arab security umbrella. This has been the 1st strategic blockage for China. If the US-China partnership shattered at an international level, the US-led bloc could use this strategic route to block China’s key imports i.e. Oil. China should address its key challenges in distributing its coal reserves to the consumers of the Southeast coastal provinces and cities; which is available in Shanxi, Inner Mongolia, Guizhou. The transportation price is higher to bring coal from Shanxi to Southeast coastal provinces but China needs to adjust this for limiting its dependency on international products. Such unaddressed challenges push China to rely on foreign countries for oil—this could be a bargaining chip for limiting China’s rise.
The second blockage in international trade is in the Strait of Malacca; surrounded by Malaysia and Singapore. Both are close to the US. These two strategic blockages (Strait of Malacca and Strait of Hormuz) could be a geopolitical battleground for China and the US; if BRI comes in action. BRI also uses the maritime route of the South China Sea, Indian Ocean, and the Arabian Sea. The US —already under the Indo-Pacific Strategy is building Quadrilateral Security Dialogue (Australia, US, India, and Japan) —naval base to protect and protect the US-led vested interest possibly countering the passage of goods of China under BRI.
Economic aspect
Next, to it, China should able to negotiate effectively on the ongoing trade talks with the US. Escalating trade war could potentially make the ASEAN countries to exploit the US market directly; which has been exploited by China earlier. The US is a huge consumer market and if one country’s production is costlier; another secondary market step in.
China’s ever-increasing international engagement in trade and politics could also impact the western countries to re-strengthen the western security alliance created after 1945 under the leadership of the US. This possibly makes the Trans-Atlantic Trade and Investment (TTIP) is a prime example. TTIP has been negotiating back door of the EU parliament despite rejection from the several EU NGOs claiming it would increase corporate hegemony over Europe. But, if the western led multilateralism faces a tough time from China; TTIP becomes unstoppable. TTIP is one of the largest deals ever which could increase the size of the EU economy by 120 billion Euros and the US by $95 billion. The two largest economic centers of the world EU and the US if happen to be combining; the global economic landscape could be dangerous. All the global wealth might forcefully be concentrated on the EU and the US market. So, underlining this; China should also prepare something coercive economic club against TTIP combining ace actors of Asia.
Way forward
Firstly, China should able to be vocal and increase its media engagements globally. As per data currently, the majority of the global media is controlled by the American businessman. This could propagate anti-Chinese propaganda globally which might affect global investors to invest in China. As still, the US is the largest FDI receiving countries ($311 billion) followed by China ( $144 billion). It has been observed that China for the last 10 years has been engaged in economic expansion globally but has limitations ineffective diplomatic engagement. In contrast, western countries have a deeper diplomatic engagement globally; promoting and protecting their vested interest perfectly. Diplomatic engagement has the power to maneuver both politics and society in a deep manner. So, the Chinese establishment should initiate a project like ‘Diplomacy First’ likewise BRI. This initiative would focus on China’s improving diplomatic maneuver and protecting and promoting her vested interest.
