The story of the Chinese spy balloon floating over the US dominated media attention last week, and its destruction by the US appeared to be a defining moment in relations between the two superpowers.
It has already been an exciting few months. Just before the balloon standoff, Washington took a major step to expand its military presence around mainland China. The United States and the Philippines announced an agreement allowing the US military to use four more bases in the Philippines. It was Washington’s latest move to build its defensive posture in the Asia-Pacific region, the likely site of any conflict between the two.
The deal with the Philippines follows the United States and Japan’s announcement last month that they were adjusting the American troop presence in Okinawa and several other defense measures, as the country’s top diplomats and military officials condemned Beijing’s aggression in the South China Sea.
And in September 2021, Washington agreed to supply nuclear-powered submarines to Australia as part of a new AUKUS defense alliance comprising Australia, the UK and the US. Security partnerships include cooperation in cyber security, artificial intelligence and quantum computing.
Meanwhile, Taiwan, which China claims as part of its historic territory, has been the biggest point of contention between the two countries. A visit there last summer by then-House Speaker Nancy Pelosi led to weeks of hostile rhetoric and unprecedented defense tactics by Beijing near the island, and the People’s Republic has significantly increased its military flights around Taiwan in recent years.
So how dangerous is the situation in the Asia-Pacific? To find out, I spoke with Jeremy Mark, a senior fellow at the Atlantic Council’s GeoEconomics Center, a Washington-based think tank. Mark was previously a reporter for CNBC Asia and the Wall Street Journal and has lived in Singapore, Taiwan and Japan. A transcript of our conversation follows, edited for length and clarity.
Contents
Michael Bluhm
How unstable is the situation in Asia-Pacific?
Jeremy Mark
The situation is pretty volatile, but I don’t think it’s a powder keg.
Over the past decade, in particular, China has taken steps that have created the instability the region has become accustomed to since the Vietnam War. China has threatened Japan, South Korea, Taiwan and the Philippines. Along its land border with India, Chinese provocations have claimed lives in the last two years. All this points to a significant increase in tension.
That said, I don’t think there is a regional or US-China conflict. Business is going on. Supply chain integration between China and its trading partners remains extremely deep.
China is deeply preoccupied with its own economy right now due to the impact of Covid, a severe real-estate slump, high youth unemployment and several other issues. This is not a country that is going to jeopardize its future by starting a war.
Michael Bluhm
What are the possible consequences of Philippine bases for regional security?
Jeremy Mark
The United States sees its consequences positively. There is essentially a hole in the US territorial defense against China – which is now being filled by this deal.
It is also a message to China that its provocative actions have relegated the Philippines to a pro-American place it once held in the regional security system.
But from China’s point of view, it increases instability. The presence of US troops north of the Philippine island of Luzon – the closest island to Taiwan – could in some circumstances introduce further tensions.
Michael Bluhm
The agreement is the latest in a series of new defense ties with countries in the region, such as the recent agreement with Japan and the AUKUS submarine agreement. How do you see Washington’s strategy here?
Jeremy Mark
I would add to last week’s announcement of technology exchange between the US and India and some other smaller arrangements. They all underline deep concerns across much of Asia about China’s posture.
In the past 10 years, the Japanese have radically changed their approach to military policy. They even amended their constitution to give greater powers to their Self-Defense Forces, allowing for a higher level of defense than China’s. Australia has concerns about Australian exports and China’s moves in the Solomon Islands, and Canberra’s decision to acquire nuclear submarines reflects that concern.
All of this adds up to a strong consensus among many Asian countries that they need greater cooperation with the United States — and with each other — to counter China.
Michael Bluhm
Let’s look at China’s perspective. How do you see China’s strategy in the Asia-Pacific region?
Jeremy Mark
Many of China’s strategies are inward-looking. The Chinese Communist Party, before and during the era of Xi Jinping, had a crisis of legitimacy. Zia has tackled corruption in a number of ways, including a massive crackdown on corruption soon after coming to power. The Chinese government has used nationalism — and particularly the threat of the United States — to sway public opinion, and they have been very effective.
More broadly, China sees itself as a rising power. Its rhetoric portrays the United States as a declining power and says it is time to redefine China’s place in the world order.
China clearly sees the importance of creating a regional sphere of influence with China at the center – and using its growing economic and military power to reduce US influence in Asia. China’s military, which has gained considerable power under Xi Jinping, is increasingly taking advantage of this to pursue a more confrontational defense policy.
Michael Bluhm
You have said that you do not see an invasion of Taiwan or war in the region as imminent. Last week’s flight of a Chinese spy balloon over the United States has heightened tensions between the countries. How might this event affect the dynamics between the two forces?
Jeremy Mark
Xi and Biden met in Bali a few months ago and tried to lay out ways they could put railings around the relationship. Secretary of State Blinken’s planned visit this past weekend is going to be part of that process. The balloon event is clearly derailed [that].
Ideally, the two governments could go beyond this and proceed through negotiations to find ways to limit such incidents. But there is a great deal of uncertainty due to the political uproar in Washington and China’s growing response to the US balloon launch.
Michael Bluhm
How dangerous is the situation around Taiwan?
Jeremy Mark
It must be dangerous, but I don’t see an imminent attack. I don’t think China has the military capability to carry out such an attack. China is acutely aware of the potential damage to its own economy and its position in the world as a result of aggression. Sanctions will certainly hurt China in the event of an attack.
That said, China is capable of taking measures against Taiwan, the most obvious example being a severe economic embargo. We saw gestures in that direction last summer. But overall, these are very few actions that will disrupt the status quo in the Taiwan Strait.
You have to remember that China is heavily dependent on Taiwan for technology like semiconductors. Taiwan’s investment is very important to China, especially at the moment when the Chinese economy is struggling. That economic base is often overlooked when considering the Chinese threat to Taiwan.
Michael Bluhm
Let’s turn to the other regional powers and talk about their perspectives. How are Japan, Australia and India dealing with the situation?
Jeremy Mark
Japan, India, and — to a lesser extent — Australia are countries where China’s bully tactics have completely self-defeated. Because of China, Japan completely changed its original military policy. The conflict stems from the Senkaku Islands – uninhabited islands, which are administered by the Japanese but claimed by China – and was Joint Russia-China naval exercises in the waters around Japan last year, and those events leave little doubt in Tokyo that its interests lie with Washington.
India was not interested in deepening the Quadrilateral Dialogue, a diplomatic and military arrangement with the United States, Japan, Australia and India. But India is now actively engaged in Chaturdashi because of the conflict on the Sino-Indian border in the Himalayas. Prior to the AUKUS submarine deal, Australia had previously been very wary of alienating Beijing.
Countries like Laos, Cambodia and Myanmar are leaning towards Beijing, and others are trying to maintain good relations with both superpowers. Malaysia is a good example; Singapore allows the US Navy to use its ports, but it also doesn’t go out of its way to anger China.
But overall, the major countries around the Pacific decided that they needed to strengthen their relationship with the United States.
Michael Bluhm
What is this shift doing to the balance of power between the US and China in the region?
Jeremy Mark
From a military point of view, China has become much stronger in the last 10 to 15 years. The US alone would be hard pressed to counter China militarily, but if you add the military capabilities of Japan, South Korea, India and Australia, China is up against something much bigger.
However, the United States and China are economically dependent on each other. The US depends on China’s manufacturing capacity and China needs the US market. China desperately needs US technology and financing because of its own economic and financial system difficulties.
These are closely related countries that depend on each other – and China has a very significant dependence not only on the United States, but also on Japan, South Korea, Taiwan and others.
Michael Bluhm
Some have compared the US-China dynamic to the Cold War, but during the Cold War, the US and the USSR had decades of conflict management experience and conflict resolution mechanisms. Does the United States and China have such a system?
Jeremy Mark
This is a serious weakness in the relationship. If you go back to 2001, when a hot-dogging Chinese fighter pilot collided with a US spy plane in South China waters, it was very, very difficult for the US to establish contact with the Chinese leadership at the highest level. In subsequent years, efforts have been made to improve not only crisis interactions but also work-level interactions across various parts of the relationship.
The overall implication is that there are still huge holes in the relationship, especially in crisis management. Yes, there are diplomatic channels between the Chinese Ministry of Foreign Affairs and the US State Department. At the highest level, we see the US President, National Security Advisor and Secretary of State interacting with their Chinese counterparts. But the entire network of working relationships is very thin. What I have not seen suggests that there has been any significant improvement in developing processes to avoid a crisis.
How are you going to have a serious conversation when the chips are down if you don’t know how to talk to each other?
Michael Bluhm is a senior editor signal. He was previously managing editor of the Open Markets Institute and a writer and editor for the Daily Star in Beirut.
Clarification, February 9, 3 pm: Updated to clarify that the Russia-China naval exercise near the Senkaku Islands was not a confrontation but a planned exercise.
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