China's Periphery Part II - Inner Asia
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China’s Periphery Part II – Inner Asia Tony Kellett Defence Scientist Emeritus The reported results, their interpretation, and any opinions expressed herein, remain those of the author and do not represent, or otherwise reflect, any official position of DND or the Government of Canada. DRDC CORA TM 2012-009 January 2012 Defence R&D Canada Centre for Operational Research and Analysis China Team Sponsor: Strategic Joint Staff National Défense Defence nationale China's Periphery Part II - Inner Asia Tony Kellett Defence Scientist Emeritus The reported results, their interpretation, and any opinions expressed herein, remain those of the author and do not represent, or otherwise reflect, any official position of DND or the Government of Canada. Defence R&D Canada – CORA Technical Memorandum DRDC CORA TM 2012-009 January 2012 Principal Author Original signed by Tony Kellett Tony Kellett Defence Scientist Emeritus Approved by Original signed by Gregory Smolynec, Ph.D. Gregory Smolynec, Ph.D. Section Head Strategic Analysis Approved for release by Original signed by Paul Comeau Paul Comeau Chief Scientist This paper has been produced under Thrust 10a as part of the China/Asia ARP. It does not contain controlled goods. Defence R&D Canada – Centre for Operational Research and Analysis (CORA) © Her Majesty the Queen in Right of Canada, as represented by the Minister of National Defence, 2012 © Sa Majesté la Reine (en droit du Canada), telle que représentée par le ministre de la Défense nationale, 2012 Abstract …….. This study forms part of the broader investigation of China’s re-emergence as a key great power and its impact on regional and global security, with a view to exploring the potential implications of developments around China’s periphery for Canada and its key alliance relationships. This report examines all the states that constitute Inner Asia (the five Central Asia countries, Russia – particularly its eastern part bordering China – and Mongolia) in the context of their relations with China. Particular emphasis is placed on issues relating to energy and security and to the potential geopolitical competition between Russia and China. Résumé …..... Le présent rapport s’inscrit dans le cadre d’une vaste étude sur la réémergence de la Chine en tant que grande puissance et sur les répercussions de cet essor sur la sécurité régionale et mondiale. L’étude a notamment pour visée d’explorer les effets potentiels de l’évolution des pays voisins de la Chine sur le Canada et ses principales alliances. Dans le présent document, nous examinons les États qui forment l’Asie intérieure (les cinq pays de l’Asie centrale, la Russie – en particulier la partie est du pays qui borde la Chine – et la Mongolie) dans le contexte de leurs relations avec la Chine. Nous accordons une attention particulière aux questions d’énergie et de sécurité et à la concurrence géopolitique qui pourrait s’installer entre la Russie et la Chine. DRDC CORA TM 2012-009 i This page intentionally left blank. ii DRDC CORA TM 2012-009 Executive summary China's Periphery: Part II - Inner Asia Tony Kellett; DRDC CORA TM 2012-009; Defence R&D Canada – CORA; January 2012. Background: This study forms part of the broader investigation of China’s re-emergence as a key great power and its impact on regional and global security, with a view to exploring the potential implications of developments around China’s periphery for Canada and its key alliance relationships. The present report examines all the states that constitute Inner Asia (the five Central Asia countries, Russia – particularly its eastern part bordering China – and Mongolia) in the context of their relations with China. Particular emphasis is placed on issues relating to energy and security and to the potential geopolitical competition between Russia and China. In August 2010, China’s economy overtook that of Japan to become the second largest in the world, and the IMF now forecasts that in terms of purchasing power parity it could overtake the US perhaps as soon as 2016. As China acquires the economic, military and political sinews of a Great Power, so it is developing the ambition for global stature. There have been signs of a growing assertiveness in China’s foreign policy. Recent actions suggest that Beijing may have departed from the policy of reassurance it adopted in the 1990s, and have revised its grand strategy to reflect its own rise and the decline of the US. However, confidence and assertion abroad seems to be mixed with insecurity at home, with the Chinese authorities appearing to be more nervous now about maintaining social stability and long-term regime legitimacy than at any time since 1989. A number of factors influence China’s relations with Inner Asia. China has historically pursued a policy of “engaging the periphery,” focusing on its borders and its immediate neighbours as a way of protecting the heartland. Beijing very much associates its core domestic security concerns – the “three evils” (terrorism, separatism and religious extremism) – with what goes on around its periphery. In particular, Beijing sees Xinjiang as a key forward defence and equally a gateway into Central Asia. Eight of China’s international borders lie in Xinjiang, giving it immense strategic importance to China, and the region epitomizes some of Beijing’s security concerns, having been rocked by Islamist uprisings, violent disturbances and bombings over the past two decades. China also worries, to a lesser degree, about Inner Mongolia, a resource-rich region whose restive minority Beijing fears could find support over the border in independent Mongolia. In these circumstances, Beijing is pursuing a vigorous policy to develop its border regions, along with an effort to deepen its relations with neighbours in Central Asia and Mongolia. Thus, the Inner Asian neighbours assume considerable significance for China’s domestic security. Their importance to China’s security is reinforced by the role that Beijing increasingly sees them playing in the Chinese economy. Historically, the Chinese state did not rely on external sources of raw materials, commodities or know-how to survive and prosper. China’s rapid economic DRDC CORA TM 2012-009 iii development has ensured that this relative independence no longer pertains, and this is particularly the case where it comes to energy, without which China’s modernization and geopolitical rise would be severely undermined, along with the survival of the Communist Party. It is expected that by 2035 China will be importing about 72 percent of the crude oil it consumes, and the government anticipates greatly boosting the share of natural gas in total energy consumption. Inner Asia is in a strong position to satisfy this energy appetite. Results: Russia. Russia is by far the most powerful of the Inner Asian countries, and the degree to which it cooperates or competes with Beijing has a great bearing on China’s rise. The two countries have reversed their national power standings over the past two decades, but even a weakened Russia remains in many ways a formidable power. Russia’s leaders have realized that their country’s energy riches give it considerable leverage in world politics. Russia has a strong sense of strategic entitlement which grates on the Chinese, and Moscow insists on its status as a Great Power. Russia has always relied on military capability to assert that claim. However, Russia’s conventional strength is greatly reduced, forcing it to rely more for its military clout on its formidable nuclear arsenal, but it does have the capacity for effective power projection in Central Asia, unlike China. Senior Russian officers are ambivalent about China, which has been viewed as both a future military threat and a market for Russian weapons, the proceeds from which have enabled a modest re-equipment of the Russian armed forces. Twenty years ago China lagged Russia in military capability by a wide margin, but has now virtually caught up with its neighbour. Formally and informally the two countries have been neighbours for many centuries, but at no stage of their common history has there been a period of unalloyed good relations. They now share the fifth-longest border in the world, but it has been shaped geographically and psychologically by a series of “unequal treaties” in the 19th century that deprived China of some 1.5 million km2 of territory. For China, the Russian Far East and Taiwan represent the last “unreturned territory” taken from China. Not surprisingly, Russian leaders have expressed real worry about China’s future plans and ability to dominate the Russian Far East, a major part of the “unreturned territory” and an important factor in Sino-Russian relations. Russian residents of the region fret that they will be swamped demographically and economically by China, and the issue of “illegal migration” roils nationalist opinion there. Only forty years ago Russia and China were implacable enemies, but now relations may well be better than at any other time in their mutual history, although neither country constitutes the other’s most important bilateral relationship. Moscow’s approach to the relationship has emphasized security concerns, whereas Beijing has focused more on the economic aspects of the association. In 2010 Russia ranked only eighth among China’s trade partners. As a result of Beijing’s conflation of economic growth and domestic stability, energy has become a major dimension of the Sino-Russian relationship. However, the extent of the energy partnership falls well short of its potential, largely because the necessary infrastructure has been slow to develop, with Russia more focused on its European markets. In addition, Beijing wants to avoid over- dependence on Russia as an energy supplier. iv DRDC CORA TM 2012-009 Russia and China share similar perceptions of a substantial non-state security challenge, concerns that intersect in Central Asia.