The Dispensable Nation: American Foreign Policy in Retreat (36 page)

China, however, already sees East and West Asia (the term it uses for the Middle East) as linked. For instance, in July 2012, after months of coaxing, the Chinese finally agreed to talk to U.S. emissaries about Afghanistan and Pakistan. But the U.S. diplomats arrived in Beijing not long after tensions over the South China Sea had surged, with Chinese and Philippine warships engaging in a standoff over Scarborough Shoal, a tiny collection of reefs and rocks plus a lagoon sitting only 120 miles west of Luzon (the largest island of the Philippines, on the eastern edge of the South China Sea). The Chinese blamed the United States for the crisis and refused to engage on the question of Pakistan, telling their American interlocutor: “There are now new issues like the South China Sea coming over the horizon that demand our attention.” The Chinese don’t divide the world into a set of separate policy domains; to them, the Middle East and Asia (and Africa and Latin America) are interconnected.

The Obama administration took the Scarborough Shoal contretemps as a sign that China’s rise would no longer be as peaceful or harmonious as before, and likely come at the cost of American interests and those of its regional allies. American interests rest with strong Southeast Asian states prospering on the back of open commerce. China’s aggressive
posturing over the South China Sea (and the rich oil and natural gas deposits lying beneath it) challenges that vision. It has rattled Beijing’s Asian neighbors, and some among them, like the Philippines and Vietnam, have looked to Washington for help.
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But what Obama and his advisers got wrong is their assumption that Chinese assertiveness is limited to Asia, and that Asia, in China’s view, is the Asia-Pacific.

There are two conceptions of Asia in Chinese thinking. The first is indeed the Asia-Pacific: the area from Myanmar eastward, or, in other words, the regions we call Southeast Asia (Myanmar, Thailand, Vietnam, Indonesia, Philippines, Singapore, etc.) plus Northeast Asia (Japan, North Korea, South Korea). Then there is the larger conception of Asia as the entire vast landmass—the world’s largest both in area and population—that stretches from the Pacific Ocean to the Mediterranean Sea. China has come to accept America’s dominance in the Asia-Pacific for now, but not so in the countries of South and Central Asia and the greater Middle East. Our strategy should be to challenge the Chinese conception of where America can and should be present. We achieve that by maintaining a strong presence in the western parts of Asia and not just in the form of military bases, but by becoming embedded in the region’s economy and political life.

America is an integral part of the Asia-Pacific thanks to its many trade deals and military bases, and also its bilateral alliances and the multilateral institutions it has helped create and now participates in. Our goal is to keep the region stable, open, and free of conflict. We see benefit in the region’s prosperity and openness to American business and trade. The wealthier the Asia-Pacific has become the more important it is for us to make sure that it will remain free of hegemonic control by any one power. The same logic should apply to the Middle East. Yet today the Middle East accounts for 5 percent of U.S. trade and only 1 percent of its direct foreign investment ($54 billion out of $3.4 trillion), a paltry amount compared with the Asia-Pacific, which accounted for 16 percent of American investment abroad.
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We are now doing less trade with the region than China is. The big story of the past decade that we missed amid our preoccupation with wars in the Middle East is the explosion of Chinese trade with the region. China’s trade with Iran has grown from $1.3 billion in 1999 to $45 billion in 2011; with Saudi
Arabia from $4 billion in 2001 to $50 billion in 2011; and with Egypt from less than a billion in 2001 to $9 billion in 2011. Since 2006 China has been exporting more to the Middle East than the United States does, and the same is true for imports since 2009.
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In 2010 Chinese exports to the region were close to double that of the United States (China is now the largest exporter to the region), and Chinese direct foreign investment took off, leaving America far behind: 30 percent of China’s global contracts in that year were with Arab enterprises.
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We have essentially ceded the Middle East to China and others to profit from just as we geared up to prevent the same happening in the Asia-Pacific and Africa.

In the past, America has resisted being pushed out of Asia by a hegemonic force. From 1941 to 1945, America fought a world war with Germany and Japan, then we faced down the Soviet Union for decades to prevent such an outcome.
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America now fears that China may wish to exclude the United States from Asia exactly when the sagging U.S. economy badly needs all the ties that can be mustered.
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That fear is behind the expansion of free-trade arrangements (with Japan and South Korea) and new business ties in Asia (with India and countries of Southeast Asia)
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and, more broadly, behind the “rebalancing” exercise and the effort to convince the countries of the Asia-Pacific that China is
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going to grow till it blocks the sun; we will be there to check its ambition. We also want China to know that we will stand athwart its path to hegemony. But to be convincing, we have to do that not just in East Asia but everywhere else, too, starting with West Asia.

The global oil company BP forecasts that between now and 2030, 95 percent of the increase in world demand for oil will come from China and India (which by 2030 could surpass China as the world’s most populous country). Even if they grow at a slower pace, the two Asian giants will still account for a significant share of global energy consumption. North America, by contrast, will become energy independent. In 2030, natural gas will account for a far bigger share (and likely majority) of global energy consumption, but less so in China or India. For starters China will still lack the necessary pipeline infrastructure to distribute natural gas nationally (building a national grid connecting supply sources to hundreds of thousands of cities, towns, and villages will take
considerable time and investment), and that will limit its ability to harness its own shale gas reserves as well.

By 2030, the oil- and gas-producing countries of Central Asia and the Middle East will be totally dependent on Asian buyers—the oil-induced strategic nexus between America and the Persian Gulf will be coming apart. That trend is already evident. Japan is buying natural gas from Qatar at $15 to $17 per million BTUs (about a thousand cubic feet), whereas the cost in America for the same amount of gas is just $3 (one reason to be hopeful that U.S. manufacturing will become more competitive). Qatar and other Middle Eastern gas producers can expect a shrinking demand from the West—Asia is now their market. They are looking east just as China is looking west. Persian Gulf monarchies are investing in refineries, banks, and manufacturing in China, deepening economic ties between East and West Asia.

Pondering this picture, the Obama administration and some observers have assumed that America can leave the Middle East and wash its hands of Middle Eastern problems. If we don’t need their oil, then surely we don’t have to deal with their headaches? That would be wise if Chinese interest in Middle Eastern energy sources did not threaten to put at a disadvantage the very allies—India, Japan, South Korea, and even much of Europe—that America needs to balance China.
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If these countries became dependent on China for their energy supplies they would have to align their foreign and economic policies with China, which would mean moving away from the United States. That would put a big dent into our plans for containing China in the Asia-Pacific and ensuring the region’s continued prosperity and openness. The best way for China to break American containment in its backyard is to squeeze the energy lifeline of America’s Asian allies, and that would have to happen in the Middle East. It is these same countries, which have been asking us to pay more attention to the Asia-Pacific, that will soon be asking us to refocus on the Middle East.

In April 2012, Turkey’s prime minister, Recep Tayyip Erdogan, visited Urumqi, the capital of China’s far western province of Xinjiang, home to
the Turkic-speaking and historically Muslim Uyghur ethnic group. With four ministers and thirty Turkish business executives in tow, Erdogan visited factories, mosques, and bazaars. To set the proper tone for the first visit of a Turkish premier to China in twenty-seven years, Erdogan had decided to first make a stop in predominantly Turkic and Muslim Urumqi. But unlike Charles de Gaulle in Quebec, Erdogan had not gone to Urumqi—site of Uyghur versus Han Chinese communal unrest not long ago—to support local nationalist aspirations. On the contrary, he told an audience there that Turkey believed in “one China.” There would be no Turkish support for Islamic activism and Uyghur separatism. This was a major shift for Turkey. Only three years before, Erdogan had angered Beijing by referring to China’s crackdown on Uyghur separatists as “genocide.” Beijing had asked Erdogan to retract his comments; he declined then, but was now in effect doing just that.

Turkey was not interested in local politics, but stood ready to invest in the local economy—to help develop a free economic zone in Urumqi. Turkey’s economic reach into Central Asia would now extend to Xinjiang, and that could in time help China further extend its own reach into Central Asia.

Erdogan’s trip to China was a follow-up to the February 2012 visit to Turkey by the incoming Chinese president Xi Jinping. On his way back from Washington, Xi made two stops. One was Ireland, where China hopes to capitalize on shrinking American and European investments—especially in the pharmaceutical industry—in order to seize a commercial beachhead on Europe’s western flank. The other was Turkey, where China sees an opportunity to enter Europe from the east, and also to find a foothold in the Middle East and the Caucasus. It is rare for an incoming Chinese president to make such an exploratory visit—it signaled the centrality of Turkey to the new president’s plans for China. China is pivoting west, angling to poach on the lucrative economic relations between the United States and the EU, and to push into western Asia. Turkey is the critical launching pad for both ambitions.

Erdogan’s performance in Urumqi sat well with China’s leaders: “It is what we would have wanted to see, confirming the new economic and strategic opportunity,” was how one senior Chinese official put it. Erdogan had set the stage for the real reason he was going to China: to
conclude a sweeping and historic agreement between China and Turkey. After Urumqi, Erdogan went to Beijing. There, he and Chinese premier Wen Jiabao signed on to deals on a wide range of economic projects, an ambitious twenty-five, to be precise. The two countries agreed to build cars and consumer goods together, but also to invest massively in new infrastructure for Turkey—some of which would serve China’s larger geostrategic interests. China agreed to sell energy-hungry Turkey two nuclear power plants, build oil refineries, develop new port facilities, dig a canal in Istanbul to reduce congestion on the Bosporus, and lay down a railway from Istanbul through eastern Turkey with plans to connect (likely through Iran, where China is also building railroads)
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to lines in China proper that reach all the way to the coastal cities that are the hubs of Chinese industry and commerce.
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There was even talk of China building a third bridge over the Bosporus to connect Istanbul’s European and Asian halves. Between 2000 and 2012, Turkish trade with China grew more than twentyfold to $25 billion, and it was poised to multiply again.
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At the Beijing offices of the Turkish Industrialists and Businessmen’s Association (TUSIAD) there is unbridled enthusiasm for the burgeoning business ties: “Our trade is $25 billion. China exports $23 billion to Turkey, but we export only $2 billion to China. We want to export more to China, but China is also happy to make up for that imbalance with FDI [foreign direct investment].” That means more Chinese companies opening shop in Istanbul and across Anatolia. TUSIAD has been wooing Chinese companies, beating the pavement in Beijing and Shanghai, looking for Chinese customers for Turkish goods and Chinese investors for Turkish ventures. Erdogan’s trip was a shot in the arm. “Now that there is government to government agreement there is official support for the business relationship. This is now a whole new game.” TUSIAD’s vanguard in Beijing acknowledges that there are hurdles to clear—for instance, Turkey has been slow to give Chinese nationals work visas—but it hopes bureaucratic snags will not stand in the way of a boom in trade. Indeed, China is now so important to Turkey’s aspirations that the promise of a rich relationship will move mountains in Ankara—and even change Turkish foreign policy. Rebuffed by Europe and hungry for investments and markets, Turkey is fast moving into China’s orbit. And
Turkey is not alone. Egypt’s new president Mohammad Morsi, too, has written off the West as a source of investment and financial assistance. He is looking to China for help. In August 2012 he flew to Beijing (ahead of a stop in Tehran) to cultivate economic ties with China. The Arab world’s most important country, with the largest population, sitting at the crossroads of Asia, Africa, and Europe, thinks it has a thing or two to offer to China.

For Turkey, the Chinese connection brings new markets and much-needed foreign investment to sustain its economic boom at a time when Europe (Turkey’s major trading partner) is going through a downturn, and when the Arab world (where Turkey had hoped to grow its exports) is being buffeted by political instability. Turkey has set itself the goal of becoming, by the time of the Turkish Republic’s centennial in 2023, the world’s tenth-largest economy (it is now the sixteenth largest). Everything in Turkey is now geared to achieving this—both the government and the private sector have made it their mantra. Massive investments, mountains of commodities, and lucrative new markets will all be needed. In Turkish eyes, East Asia and especially China hold the key. One senior Erdogan adviser put it this way: “To realize our goal we need China’s investments to build new bridges, roads, telecommunications and new technologies, but also business and trade. China is building up Africa, why not Turkey? China is the only country in the world that is willing to make that kind of investment.” And what of Turkey’s future in Europe? I asked. “Europe will not make that kind of investment. Turkey’s future needs China.”