Stratfor and Shu Qi

Tuesday, March 06, 2012
George Friedman continues his review of the current global geopolitical situation by looking at the problems and opportunities facing China. as he points out China faces three challenges: maintaining domestic peace between its coastal and interior regions, ensuring that its supply lines are secure, and maintaining its buffer states to protect its core from threat.

The beginning of the article is excerpted below. You can read the entire article at Stratfor by following the link at the end of the excerpt.

For the article's Hot Stratfor Babe I diligently searched the ranks of Chinese actresses worthy of the honor. I finally selected the Taiwanese born actress Shu Qi to receive the title of this article's Hot Stratfor Babe.

Ms. Qi is most familiar to Western audiences for her role as the 'package' in the 2002 film The Transporter. She's actually had busy career, and is well known, in the Hong Kong film industry.

She started out as a soft core model, doing Chinese Playboy shoots and the like, and then graduated into doing roles in soft core Chinese films. In spite of the stigma of such a start to conservative Chinese viewers, her acting ability allowed her to graduate into more serious roles -- or at least roles where she kept her clothes on most of the time.

She has also elevated her modelling career, and now does ads for the fashion, perfume and cosmetics industries. She also continues to appear in Western films from time to time, so she may be able to extend her reach beyond Asian audiences. 


The State of the World: Assessing China's Strategy
By George Friedman, March 6,2012

Simply put, China has three core strategic interests.

Paramount among them is the maintenance of domestic security. Historically, when China involves itself in global trade, as it did in the 19th and early 20th centuries, the coastal region prospers, while the interior of China -- which begins about 160 kilometers (100 miles) from the coast and runs about 1,600 kilometers to the west -- languishes. Roughly two-thirds of all Chinese citizens currently have household incomes lower than the average household income in Bolivia. Most of China's poor are located west of the richer coastal region. This disparity of wealth time and again has exposed tensions between the interests of the coast and those of the interior. After a failed rising in Shanghai in 1927, Mao Zedong exploited these tensions by undertaking the Long March into the interior, raising a peasant army and ultimately conquering the coastal region. He shut China off from the international trading system, leaving China more united and equal, but extremely poor.

The current government has sought a more wealth-friendly means of achieving stability: buying popular loyalty with mass employment. Plans for industrial expansion are implemented with little thought to markets or margins; instead, maximum employment is the driving goal. Private savings are harnessed to finance the industrial effort, leaving little domestic capital to purchase the output. China must export accordingly.

China's second strategic concern derives from the first. China's industrial base by design produces more than its domestic economy can consume, so China must export goods to the rest of the world while importing raw materials. The Chinese therefore must do everything possible to ensure international demand for their exports. This includes a range of activities, from investing money in the economies of consumer countries to establishing unfettered access to global sea-lanes.

The third strategic interest is in maintaining control over buffer states. The population of the historical Han Chinese heartland is clustered in the eastern third of the country, where ample precipitation distinguishes it from the much more dry and arid central and western thirds. China's physical security therefore depends on controlling the four non-Han Chinese buffer states that surround it: Manchuria, Inner Mongolia, Xinjiang and Tibet. Securing these regions means China can insulate itself from Russia to the north, any attack from the western steppes, and any attack from India or Southeast Asia.

Controlling the buffer states provides China geographical barriers -- jungles, mountains, steppes and the Siberian wasteland -- that are difficult to surmount and creates a defense in depth that puts any attacker at a grave disadvantage.
Challenged Interests

Today, China faces challenges to all three of these interests.

The economic downturn in Europe and the United States, China's two main customers, has exposed Chinese exports to increased competition and decreased appetite. Meanwhile, China has been unable to appropriately increase domestic demand and guarantee access to global sea-lanes independent of what the U.S. Navy is willing to allow.

Those same economic stresses also challenge China domestically. The wealthier coast depends on trade that is now faltering, and the impoverished interior requires subsidies that are difficult to provide when economic growth is slowing substantially.

In addition, two of China's buffer regions are in flux. Elements within Tibet and Xinjiang adamantly resist Han Chinese occupation. China understands that the loss of these regions could pose severe threats to China's security, particularly if such losses would draw India north of the Himalayas or create a radical Islamic regime in Xinjiang. The situation in Tibet is potentially the most troubling. Outright war between India and China -- anything beyond minor skirmishes -- is impossible so long as both are separated by the Himalayas. Neither side could logistically sustain large-scale multi-divisional warfare in that terrain. But China and India could threaten one another if they were to cross the Himalayas and establish a military presence on the either side of the mountain chain. For India, the threat would emerge if Chinese forces entered Pakistan in large numbers. For China, the threat would occur if large numbers of Indian troops entered Tibet.

China therefore constantly postures as if it were going to send large numbers of forces into Pakistan, but in the end, the Pakistanis have no interest in de facto Chinese occupation -- even if the occupation were directed against India. Likewise, the Chinese are not interested in undertaking security operations in Pakistan. The Indians have little interest in sending forces into Tibet in the event of a Tibetan revolution. For India, an independent Tibet without Chinese forces would be interesting, but a Tibet where the Indians would have to commit significant forces would not be. As much as the Tibetans represent a problem for China, the problem is manageable. Tibetan insurgents might receive some minimal encouragement and support from India, but not to a degree that would threaten Chinese control.

So long as the internal problems in Han China are manageable, so is Chinese domination of the buffer states, albeit with some effort and some damage to China's reputation abroad.

The key for China is maintaining interior stability. If this portion of Han China destabilizes, control of the buffers becomes impossible. Maintaining interior stability requires the transfer of resources, which in turn requires the continued robust growth of the Chinese coastal economy to generate the capital to transfer inland. Should exports stop flowing out and raw materials in, incomes in the interior would quickly fall to politically explosive levels. (China today is far from revolution, but social tensions are increasing, and China must use its security apparatus and the People's Liberation Army to control these tensions.)

Maintaining those flows is a considerable challenge. The very model of employment and market share over profitability misallocates scores of resources and breaks the normally self-regulating link between supply and demand. One of the more disruptive results is inflation, which alternatively raises the costs of subsidizing the interior while eroding China's competitiveness with other low-cost global exporters.

Read the rest of  The State of the World: Assessing China's Strategy at Stratfor.
 

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