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Why China plays it safe

china currencyOne of the most interesting aspects of the crisis surrounding Russia’s annexation of the Crimea has been China’s attitude.
The development of the crisis will, to a great extent, be influenced by this new superpower’s actions, and predicting these is, at best, an imperfect science.

Since American President Richard Nixon’s ground-breaking visit to Beijing in 1971 — which brought the overt hostility between the two to an end — China pursued a balancing act between the US and the USSR, refusing to ally itself with one side or the other.

When the USSR fell apart in 1991, the furious competition between Russia and the US also came to an end, making China’s previous policy more or less redundant.

But the tension between Moscow and Washington has been growing again of late, with the Crimean crisis as a provisional climax. Up to the Crimea situation, China mostly tended to side with Russia, for instance in opposing sanctions and or military action against Libya, Syria and Iran.

The fairly aggressive way in which the Chinese have muscled in economically on Africa has also not improved the mood in the White House.

But regarding the Crimea, China has once again seen an opening to play Russia and America off against each other.
In the UN Security Council, the Chinese ambassador abstained from a vote to condemn the Russian action in the Crimea.

In their public utterances, Chinese spokespeople steered away from blaming or supporting the Russians, limiting themselves to vague statements like encouraging all those involved to resolve the issue through dialogue and restraint.

Obviously, the world as seen from Beijing looks different from viewing it from the White House or the Kremlin. Successive Chinese governments have always been very good at pursuing their own interest.

And in this case, China’s interest demands a cautious course without committing itself to either side.
For the Chinese rulers, the bottom line at present is to keep their country’s economic boom going. The blistering pace of its growth has flattened somewhat during the last three or four years, but compared to the rest of the word, it still dwarfs anything seen elsewhere.
To a large extent, this growth is export-driven. According to the official English-language China Daily, the country’s international trade grew by 7.3 percent in 2013 to US$4.2 trilion (about M42 trillion), exceeding that of the USA.
Zhu Haibin, chief economist of JP Morgan, expects 11 percent growth for 2014.
This has to be seen in context. America’s ratio of its trade to its GDP is only just above 30 percent, which makes it a relatively autarkic country. China’s equivalent figure is 53 percent.
In other words, while China’s economy makes a big contribution to the world economy, it is also relatively vulnerable to international economic trends.
At the same time, energy-guzzling China is also rather dependent on Russian oil.
According to a recent report in the American online economic news website Bloomberg, China imported a total of 2.72 million metric tonnes of crude oil in February alone, “about three supertankers full every three days”.
Russia now supplies about 12 percent of Chinese crude imports. If it is to continue its economic boom, China cannot afford to offend either Russia or the West — at any rate, not too much. But this cautious policy of safeguarding its economic growth also has to be seen in context.
China has grown much more confident in its backyard, East Asia and the western Pacific, during recent years.
Many international commentators foresee a clash with especially Japan, South Korea and America in coming years.
The Chinese are in the process of building up a strong navy, thereby enabling themselves to project power offshore to several hundred kilometres.
Their strategic goal, some think, is to become the dominant power in the region, to be able to dictate to their rivals.
But they know that, although they may test the envelope, so to speak, they cannot go too far — at any rate, not at present.
For the time being, they must play it safe to build up their economic (and military) muscles. If this analysis is correct, it explains why China is treading warily in the escalating power struggle between the US and Russia.
Russia has already put out feelers to Beijing in order to enlist the Chinese on their side. It appears that the Chinese answer is to remain courteous but firmly non-committal. — Fin24

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