Sun, Sep 09, 2018 - Page 7 News List

What a Chinese superpower would look like

China aims to expand its influence from one polar cap to the other, but debt, demographics and a middle-income trap stand in the way

By Marc Champion  /  Bloomberg

Consider, too, that the average Chinese remains less wealthy than the average Mexican at a time when the population is already starting to age. Some investors wonder about the health of big Chinese banks, whose lending for decades provided the investment-led growth on which the party relies for its legitimacy.

If this is a superpower in the making, it might be a fragile one.

To former Australian deputy secretary for Strategy and Intelligence Paul Dibb, it is telling that Beijing spends more on internal security than defense.

“China will have to choose not between guns and butter, but between guns and elderly care,” he said.

Wang is among the loyalists who have come to prominence since Xi took power in 2013. Like his boss — Wang is also the Chongyang Institute’s party secretary — he exudes limitless confidence in China’s future.

An ice sheet with a mean depth of 2.6km has protected Antarctica’s resources from exploration. Still, Wang’s report says that below the surface is an estimated 500 billion tonnes of coal, as much as 100 billion barrels of oil, and 5 trillion cubic meters of natural gas.

Despite a 1959 treaty that freezes all territorial claims, at least for now, Wang sees a “fierce” geopolitical struggle under way. He fears that, without a stronger voice and presence, China will lose out.

“President Xi Jinping has repeatedly emphasized that China must participate more actively into rule-settings in new areas, including deep sea, polar regions, outer space and the Internet,” his report concludes.

In practice, that would mean building infrastructure to accommodate tourists and beefing up Beijing’s research presence, the key determinant of influence in Antarctica’s multinational administration.

The US budget request for the Office of Polar Programs next year is US$534 million.

Wang’s report said that from 2001 to 2016 China invested 310 million yuan (US$45.3 million) in its Antarctic program.

Beijing could easily afford the difference, but Antarctica is just one challenge China faces.

In January, China published its first white paper on the other pole, the Arctic, outlining its ambition for a “Polar Silk Road.”

It proposes designing and building new icebreaker vessels and bases, essential tools in an area with fewer barriers to territorial claims than the southern polar cap.

Silk Road is another name for the Belt and Road Initiative, into which China has already sunk hundreds of billions of dollars. In Africa alone, China loaned about US$86 billion between 2000 and 2014 to governments and state-owned enterprises, and in 2015 Xi pledged another US$60 billion under the initiative.

To match the US on defense spending, China would need to find another US$400 billion a year. Even for China, these are large costs.

Xi grasps the core lesson of the former Soviet Union’s failure — its over-reliance on military strength, said David Shambaugh, a professor at George Washington University and author of numerous books on China.

Beyond weapons, superpowers require technology, strong economies and soft power influence to sustain themselves.

“China understands that,” he said.

Beijing has modernized its army while spending a relatively small share of annual GDP — officially as little as 1.5 percent, or 1.9 percent according to the Stockholm International Peace Research Institute.

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