CourcyInt

COURCYINT SPECIAL BULLETIN

To: All Courcy's Intelligence Service members

Date: 28 July 2005

From: JKC de Courcy, Chief Executive, Courcy's Intelligence Service

Subject: US FEAR OF CHINA COMING THROUGH LOUD AND CLEAR

Considerable publicity has been given to the publication last week of the annual report to Congress by the US Secretary of Defence on “The military power of the People’s Republic of China”. Less has been given to the equally interesting hearings of the US-China Economic and Security Commission.

The hearings covered the following topics: China’s Future Energy Development and Acquisition Strategies; Factors Driving China’s Global Strategy and US Policy Responses; China’s Approach to Africa; China’s Approach to Latin America; China’s Approach to Europe; China’s Approach to Northeast and Southeast Asia; China’s Approach to South Asia and Former Soviet States.

We reproduce below the agenda for the 21-22 July hearings, links to the key speeches, and short summaries of each testimony.

Of all the testimonies, the one that most struck us was that concerning China’s approach to Southeast Asia given by Dr Marvin C Ott, Professor of National Security Policy at The National War College. This testimony reads particularly interestingly alongside the main briefing in this week's Courcy's Intelligence Review ("US sends uncertain signal to Asia"), and it reinforces the main thrust of that briefing even though, in the event, China's Foreign Minister Li Zhaoxing pulled out of the ASEAN Regional Forum meeting at the last moment.

Dr Ott claims in his testimony that China ’s geopolitical ambitions “focus on Southeast Asia , where Beijing is intent upon establishing a pre-eminent sphere of influence”. According to Ott, China has pursued this ambition “with a very skilled diplomatic campaign designed to ultimately bind the region to China – politically, economically, and militarily”. He says: “In effect, a contest for the future of Southeast Asia and the peripheral seas is already underway.”

Ott is in no doubt as to the motive forces driving China ’s foreign policy, they are “geopolitical ambition and nationalism”. He says that Maoism/Marxism is dead and has been replaced by a strident nationalism that is reminiscent of late-19th century Europe and is being given added edge by “ China ’s acute sense of historic grievance against the West and Japan ”.

Ott concludes: “There is a strategic contest (a Great Game) underway and one player has developed a sophisticated strategy and has already collected a number of chips; the other player does not have a strategy and acts like it is unaware the game has started. So far, the US is losing the game.” 

Taken altogether, and with very few individual exceptions, if we had to use one word to sum up the testimony before the US-China Economic and Security Commission it would be fear.

Details of the hearings follow:

Hearing on China ’s Growing Global Influence: Objectives and Strategies 

Hearing Cochairs: Commissioners Carolyn Bartholomew, June Teufel Dreyer and Michael R Wessel 

July 21-22, 2005, 124 Dirksen Senate Office Building, 1st Street and Constitution Avenue, NE, Washington , DC 



OPENING STATEMENTS

* Opening Statement by Chairman RICHARD D'AMATO

EXTRACT:

“China ’s influence - diplomatic, economic, and military - is growing on nearly every continent. China’s quest for energy and commodities is a central reason for that country’s increasing activities and presence around the globe, and a part of this Commission’s mandate is to assess how China’s growing economy is affecting the world’s energy supplies and demand driven behaviour...It is imperative for Washington to understand China’s global objectives, the resulting implications for the U.S., and how, as a nation, we should respond. In particular, it is vital for Congress to make knowledgeable, informed decisions. Our purpose here is to collect and help Congress evaluate the information it needs in this respect.”

FULL TEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/damato_richard_open.pdf 


* Opening Statement by Vice Chairman ROGER W ROBINSON, Jr.

EXTRACT:

“Like the Chairman, I am also concerned about some of the downside risks for U.S. interests associated with a rising China . China ’s presence is growing in many parts of the world, and at a high velocity. China is strengthening ties with traditional U.S. allies – such as Germany , Israel and Australia . Such ties could in the future require those who have been our friends and supporters to choose sides between the US and China on certain issues. We must gain a better understanding of China ’s global economic and security strategy and, at the same time, persuade our allies not to sacrifice long-term security interests for short-term economic and financial gain.”

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/robinson_roger_open.pdf 


* Opening Statement by Hearing Co-Chair JUNE TEUFEL DREYER

EXTRACT:

“China’s large purchases of weapons systems and arms from Russia have strategic implications not only for the US but for other nations in close proximity to China as well. Some of these are part of America’s alliance system; all are important for the maintenance of Asian stability.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/dreyer_june_open.pdf 


* Opening Statement by Hearing Co-Chair MICHAEL R WESSEL

EXTRACT:

“China is pursuing an entirely different strategy on energy acquisition than the US, or its major allies are pursuing. Our actions are market based – no one questions that our major oil companies intend to sell their products to the highest bidder. The major oil companies are engaging in a free market approach.

“China, on the other hand, wants to own oil and other energy assets, at the wellhead. Their energy acquisition strategy is mirrored in their efforts to acquire other resources such as iron ore, nickel and other commodities. They are willing to pay a premium for these assets now to ensure captive supplies for the future.

“China views this as a national security issue and has linked its military, diplomatic and political efforts in the world to their energy acquisition strategy. They have entered into energy acquisition deals with Iran, Sudan and other nations to ensure their access to energy. In return, they have transferred military equipment, technology, and cash and have agreed to support the political aims of those and other countries. Their efforts extend to blocking action at the United Nations for the call for action against the genocide in Sudan. They have transferred, and been sanctioned for, their shipments of advanced missile technology to Iran. They are reaching out to countries across the globe – many of which have serious implications for US security interests.”

FULL TEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/wessel_michael_open.pdf 


PARTICIPANTS and TESTIMONY:

Thursday, July 21- Location: Senate Dirksen 

9:00–9:45 am Panel I: CONGRESSIONAL PERSPECTIVES 

* Senator RUSSEL FEINGOLD

N/A


* Senator JAMES INHOFE

EXTRACT:

“I have outlined in my earlier speeches how China is a threat. I believe it is. But this is a threat that can be addressed and enable a healthy, mutual growth for both our countries. A primary step toward this end is addressing the shortcomings of the CFIUS [Committee on Foreign Investment in the United States] review process.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/inhofe_james_wrts.pdf 


* Congressman J RANDY FORBES

EXTRACT:

“If I could summarize our greatest concerns at this time, they would be the following:

1. There is an enormous void in our knowledge of China which must be filled. We have few analysts who read or speak Chinese or fully understand their culture. On the contrary, many of their leaders including their generals speak English and many were educated in America.

2. At every briefing we attend, no matter how high ranking the participants, we are told that there is no coordinated approach to analysing the multi-faceted complex nature of the China problem and the communication between agencies is inadequate at best. This must be remedied as soon as possible.”

FULLTEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/forbes_randy_wrts.pdf 


9:45-11:30 am Panel II: CHINA'S FUTURE ENERGY DEVELOPMENT AND ACQUISITION STRATEGIES

* Dr GAL LUFT, Executive Director, The Institute for the Analysis of Global Security

EXTRACT:

“Though there is always a chance that China’s pursuit of energy could present an opportunity to enhance cooperation, integration and interdependence with the US, I believe that it is more likely that aggressive competition over access to energy sources will ensue. With global reserves of cheaply recoverable oil and gas being depleted China is already competing with the U.S. over the same oil reserves in some of the world’s most unstable areas. Former Secretary of State Henry Kissinger warned recently that the global battle for control of energy resources could become the modern equivalent of the colonial disputes of the 19th century."

FULL TEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/luft_gal_wrts.pdf 


* Mr FAREED MOHAMEDI, Chief Economist, PFC Energy

N/A

11:30 am–1:00 pm Panel III: FACTORS DRIVING CHINA'S GLOBAL STRATEGY AND US POLICY RESPONSES

* Mr RANDALL SCHRIVER, Armitage International

N/A 


* Dr STEVEN TSANG, Director, Asia Studies Center , St. Anthony’s College, Oxford 

EXTRACT:

“In general terms while China is building up its ‘comprehensive national strength’ it needs a stable and peaceful international environment to ensure rapid growth under the leadership of the Communist Party.

“In national security terms, China’s main focus is Taiwan, and until this ‘principal contradiction’ has been resolved to its satisfaction, it is China’s policy to reassure the rest of the world that China has no territorial or aggressive ambitions.

“In the long term and when China is ready it will assert its ‘rightful place’ in the world, which may require appropriate changes being made to the international system...

“If the nature and disposition of the Communist Party leadership and the political system remain essentially unchanged when China reaches a state of development that it can afford to assert its ‘rightful place’ in the world, such a turn of events will almost certainly not be as peaceful as Chinese propaganda today portrays. It will involve a contest of strength and diplomacy between the established superpower and the new emerging one.”

FULL TEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/tsang_steve_wrts.pdf 


* Dr AVERY GOLDSTEIN, Professor of Political Science, University of Pennsylvania 

EXTRACT:

“China’s strategy reflects its attempt to play a weak hand well. The US, by contrast, holds most of the high cards; we need only be sure that we don’t play our strong hand poorly. A rush to judgment about the nature of the China we are likely to face several decades from now is not only unwise, it is also unnecessary.”

FULL TEXT: 

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/goldstein_avery_wrts.pdf 


* Dr CHARLES MCMILLION, President and Chief Economist, MBG Information Services

N/A


2:00–3:30 pm Panel IV: CHINA'S APPROACH TO AFRICA 

* Ambassador PRINCETON LYMAN, The Ralph Bunche Senior Fellow in Africa Policy Studies, The Council on Foreign Relations

EXTRACT:

“It is not only protecting its clients from strong punitive measures by which China’s investments are attractive to Africans, but also because they come with no conditionality related to governance, fiscal probity or other of the concerns that now drive western donors.”

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/lyman_princeton_wrts.pdf 


* Ambassador DAVID SHINN, Adjunct Professor of International Affairs, The George Washington University 

EXTRACT:

“There will inevitably be an element of competition between China and the US in Africa over access to natural resources, winning of commercial tenders, and even African support for occasional different positions on political, economic, and social issues in international forums. There will be disagreements, for example, on human rights issues in certain African countries, the priority and pace of democratization and the sale of military equipment to African countries engaged in conflict.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/shinn_david_wrts.pdf 


3:30-4:30 pm Panel V: CHINA'S APPROACH TO LATIN AMERICA 

* Dr CYNTHIA WATSON, Professor, The National War College 

EXTRACT:

“While I do not believe that Chinese involvement [in Latin America] currently indicates a serious threat to the security of the United States, I believe that Beijing seeks to establish networks which will benefit its interests for the long term, possibly to the detriment of US security.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/watson_cynthia_wrts.pdf 


* Dr CLAUDIO LOSER, Senior Fellow, The Inter-American Dialogue

EXTRACT:

“Trade between China and Latin America will continue to grow at a rapid pace over the coming years. Despite that, China’s share in Latin American trade will remain relatively small, compared to the share of the United States and European Union. Taking into account China’s economic bottlenecks and uncertain investment promises, Latin America probably cannot rely on China, as the source of trade expansion.” 

FULL TEXT: www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/loser_claudio_wrts.pdf 


* Mr AL SANTOLI, President, The Asia-America Initiative

EXTRACT:

“Chinese geo-strategic practices of asymmetrical warfare, using both ancient techniques and modern 'war by other means' targeting the 'weak exposed sides' of the United States have been steadily and effectively growing during the past decade in Latin America . Chinese tactics are being used to gain political and economic influence, as well as military alliances and bases for cyber-electronic warfare. These developments are a critical challenge to the United States in a vulnerable resource-rich area on our doorstep that we have too often taken for granted.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/santoli_albert_wrts.pdf 


Friday, July 22 - Location: Senate Dirksen 106 

9:00-10:15 am Panel VI: CHINA'S APPROACH TO EUROPE 

* Dr ROBIN NIBLETT, Executive Vice President and Director of the Europe Program, The Center for Strategic and International Studies

EXTRACT:

“There is little doubt that China’s current leaders would like to draw Europe and the EU into a multi-polar world order in which the transatlantic alliance would be weakened and in which China’s ability to manoeuvre between Washington, Brussels, and EU member state capitals (as well as between Moscow, Delhi, and other key capitals) on its policy priorities would be maximized. From a zero-sum perspective, a weakening of the transatlantic bond would be a net plus in terms of the Chinese government’s freedom of action domestically and on the world stage.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/niblett_robin_wrts.pdf 


* Dr CHRISTOPHER DENT, Professor, University of Leeds 

EXTRACT:

“The ‘China threat’ does not resonate in Europe in the same way that it does in the United States.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/dent_christopher_wrts.pdf 


10:15 – 11:45 am Panel VII: CHINA'S APPROACH TO NORTHEAST AND SOUTHEAST ASIA 

* Mr DANIEL BLUMENTHAL, Resident Fellow, The American Enterprise Institute

EXTRACT:

“There are three elements to China’s strategy: First is to build up what it calls ‘comprehensive national power’; second is to reassure the region that it does not have revisionist or aggressive aspirations; third, by necessity, is to displace the United States as the pre-eminent power, hopefully, in their minds, peacefully.”

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/blumenthal.pdf 


* Dr MICHAEL CHINWORTH, Director of The Center for US-Japan Studies and Cooperation, Vanderbilt University 

EXTRACT:

“With China’s economy assuming greater importance to Japan, I wonder if some in Japan fear the possibility that they will be forced essentially to make a choice between China and the United States to assure its own economic and perhaps territorial security. For a country that often views its own security in economic terms, the question is whether the value of Japan’s economic ties with China - or its economic dependence on China - will some day outweigh the benefits of its economic and military relationship with the United States.”

FULL TEXT: www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/chinworth_michael_wrts.pdf 


* Dr MARVIN C OTT, Professor of National Security Policy, The National War College 

EXTRACT:

“There is a strategic contest (a Great Game) underway [in Southeast Asia] and one player has developed a sophisticated strategy and has already collected a number of chips; the other player does not have a strategy and acts like it is unaware the game has started. So far, the US is losing the game.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/ott_marvin_wrts.pdf 


* Mr BRONSON PERCIVAL, Senior Advisor, The C.N.A. Corporation

EXTRACT:

“Although Washington has appropriately focused on countering terrorism, the ‘rise of China’ may eventually prove to be a second challenge for the United States in the region. Washington’s current response has been ambivalent and ambiguous. Southeast Asia tends to be treated as a footnote to larger issues in the US-Chinese relationship. Most experts agree that an American attempt to portray Southeast Asia as a battleground in a zero-sum contest with China is misleading and could turn into a self-fulfilling prophecy. But the United States has so long seen itself as the unchallenged, benign superpower in the region, that there is a whiff of complacency in the air.”

FULL TEXT: www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/percival_bronson_wrts.pdf 



11:45 am-1:00 pm Panel VIII: CHINA'S APPROACH TO SOUTH ASIA AND FORMER SOVIET STATES


* Dr JOHN GARVER, Professor, The Sam Nunn School of International Affairs, The Georgia Institute of Technology

EXTRACT:

“China’s broad strategic objective is to persuade India to look benevolently on an open-ended and expanding Chinese economic, political, and military presence in South Asia and the Indian Ocean, to eliminate suspicion in Sino-Indian relations, and to transform India into China’s partner. In this way the rise of China in Asia will not lead to Indian efforts to countervail China in coalition with the United States. But the conversion of India to friendship with China is to be done without making concessions to India on the status of Tibet, the Sino-Pakistan strategic link, or by restricting China’s expanding military, security, and transportation ties with other South Asian nations.” 

FULL TEXT: www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/garver_john_wrts.pdf 


* Dr MADHAV NALAPAT, Professor, Manipal Academy 

EXTRACT:

“Although China has taken a strident tone against US ‘unipolarity’, the reality is that the objective of the CCP is itself to create a unipolar Asia with the PRC at its core. This would in time enable the PRC to displace the US as the global unipolar power. In Asia, early on, the CCP saw Japan and India as the two major obstacles towards primacy in the continent, thus setting in train a series of policies - including strategic assistance to North Korea and Pakistan - designed to weaken the ability of the two Asian democracies to reach a level where they could overwhelm the 'Comprehensive National Power’ (CNP) of China.” 

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/nalapat_md_wrts.pdf 


* Dr PAUL GOBLE, Professor, University of Tartu 

EXTRACT:

“The underlying interests of the Russian government and the underlying interests of the Chinese government will both push them together toward cooperation in certain areas and drive them apart in others, a situation which means that we must be prepared to navigate between them rather than concluding as we have sometimes sought to do in the past all that we should back one of these countries against the other once and for all.”

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/globe.pdf 


* Mr HERMAN PIRCHNER, Jr, Founding President, The American Foreign Policy Council

EXTRACT:

“Far more than any discomfort caused by American bases in Central Asia , or American support of the new government in Georgia, the successful and correct American support in the election of a Western-leaning Ukrainian president over his Kremlin backed-opponent has had a profound effect in Moscow. Ongoing cooperation in the War on Terror and nuclear issues non-withstanding, a consequence of the most recent Ukraine election will be to increase Russian cooperation with China - especially through efforts that are, at least partially, aimed at reducing American involvement in the territory of the former Soviet Union…

“What is the future of this relationship? In the short term it may grow - especially if anti-democratic forces continue to be ascendant in Russia. But there are many reasons to believe that Russian-Chinese cooperation may lack durability.”

FULL TEXT:

www.uscc.gov/hearings/2005hearings/written_testimonies/05_07_21_22wrts/pirchner_herman_wrts.pdf



END