War by Other Means

The United States is the most powerful economy in the world; but, it still relies primarily on the power of the gun in the pursuit of its international affairs. On the other hand, emerging superpowers like China, Russia India and Japan are turning to economics as their primary form of warfare.

In the United States, foreign policy issues are centered on combat issues. Should the USA arm directly arm Iraqi and Syrian Kurds to fight ISIS? Should it increase military presence in Syria? Should increase the number of troops in Afghanistan? Should it launch a pre-emptive military strike against North Korea? The answers to all these questions are based on furthering the interests of the United States.

China has the same interest of furthering its own economic And security interests. But, so far it has followed a different path .Instead of a military war, it is waging an economic war. China curtails the import of Japanese autos to signal its disapproval of Japan’s security policies. It has given aid to Cambodia in exchange for active support of its aggressive policies in the South China Sea. It continues being the principal trading partner of North Korea to counter balance American influence in the Korean peninsula. It threatens to reduce economic benefits to countries that host the Dalai Lama.

In their book WAR by OTHER MEANS, Blackwell and Harris defines this type of warfare as geoeconomics: “The use of economic instruments to promote and defend national interests, and to produce beneficial geopolitical results and the effects of other nations’ economic actions on a country’s geopolitical goals.” 

One of the most important factor for the emergence of economic warfare is the tremendous rise of state capitalism in many countries. This refers to the control of corporations by governments which put their resources at the direct and immediate disposal of governments. In the United States, the government cannot force Apple or Exxon to invest for political purposes. In countries, like China, Russia and Saudi Arabia this is possible. 

“Governments, not private shareholders, now own the world’s 13 largest oil and gas firms and 75% of the world’s energy reserves. Between 2004 and 2009, 120 state owned companies joined the ranks of Forbes’s list of the world’s biggest 2,000 companies, while 250 private firms dropped off. According to reports from 2013, state backed companies account for 80% of China’s stock market, 62% of Russia’s, and 18% of Brazil’s. One-third of the emerging world’s foreign direct investment (FDI) from 2003 through 2010 came from state-owned firms. Governments are now the largest players in some of the globe’s most important bond markets.”

China’s government has become the world’s biggest state capitalist. Never in the history of the world has one government controlled so much wealth. It should, therefore, not be surprising that China has been described as the leading practitioner of economic warfare. 

Long-time foreign policy expert and former New York Times commentator said: “ Beijing has been playing the new economic game ...staying out of wars and political confrontations and zeroing in  on business – its global influence far exceeds its existing economic strength.”

Isolating Taiwan

China’s strategy of internationally isolating Taiwan ( Republic of China) in order to force a peaceful reunification is a classic case in the use of economic warfare. According to Blackwell and Harris:

“ Beijing will not rule out the use of force, however, and some 1,600 missiles still pointed at Taiwan help punctuate the point. The threat of force has been a fixture of cross-straits relations for decades...Backstopped by this threat of force, Beijing has supported its desire for reunification by pressuring Taipei with a full range of geoeconomic instruments. China now increasingly relies on a strategy of economic encirclement and penetration to push Taiwan in the direction of eventual reunification. It has two parts. The first is multilateral, reflected in how China uses geoeconomics around the world to advance a one-China policy on its terms; and, the second mirrors this, but on a bilateral level, seen in how Beijing makes use of geoeconomics in its direct dealings with Taiwan.”

Last June, Panama  severed official diplomatic relations with Taiwan which leaves only 20 countries with official diplomatic relations with Taiwan. By “coincidence’, last Dec. 2, 2016, a Chinese business delegation arrived in Panama scouting investment opportunities particularly in energy and port infrastructure. Also, at that same time, reports surfaced that Beijing has been seeking to establish official ties with the Dominican Republic, a move that would invalidate the island’s existing ties with Taipei.

 Last November 23, 2016, Hongkong authorities, apparently acting at Beijing’s behest, interdicted a shipment of armoured personnel carriers heading from Taiwan to Singapore – a city state that has long maintained military ties with Taipei. 

There is still a lot of debate whether China’s economic warfare will really succeed. The reported failures of Chinese infrastructure investments in Sri Lanka has led to questions about the economic feasibility of Chinese loans. The increasing political pressure in the United States to launch a trade war with China coupled with Japan’s remilitarization could also impact China’s foreign policy. Finally, the younger generation in Hongkong and Taiwan are more nationalist than their elders and are unwilling to succumb to China’s economic pressure as easily as the present generation of leaders.

The Philippines needs to be aware of the changing landscape in international affairs and always place Philippine sovereign interest as the primary goal of its international policy.

Creative writing classes for kids/teens and adults

Young Writers’ Hangout for Kids & Teens on September 9, September 23, October 7 and October 21 (1:30-3pm/independent sessions). Speculative Fiction Writing for Adults with Dean Francis Alfar on September 16, 2017 (1:30 pm-4:30 pm). All sessions are at Fully Booked Bonifacio High Street. For registration and fee details text 0917-6240196 or email [email protected].

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