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Thursday, April 3, 2003

Economic effects of war concern China


HONG KONG -- The war in Iraq has brought to the surface strains in the Chinese-American relationship that had been papered over because of the two countries' common stand in the war on terrorism.

As was the case after the 9/11 terrorist attacks 18 months ago, when Washington built a worldwide coalition in its war on terror, so today the United States is building another coalition -- this time perhaps more in name than in reality -- to show that its military campaign to overthrow Iraqi President Saddam Hussein has wide international support.

But three of the five permanent members of the United Nations Security Council -- France, Russia and China -- are notably missing from that list.

While China has preferred to let France take the lead in opposing the war in Iraq, Beijing has by no means been silent. In fact, as soon as the war broke out, China issued statements sternly condemning the invasion and calling for the immediate cessation of all military actions against Iraq.

Now that the war has entered its third week with the end nowhere in sight, China has made its position even clearer, with the publication of an article Monday in the People's Daily. The article took the form of an interview by the official Xinhua news agency with Li Jianying, vice president of the Chinese People's Institute of Foreign Affairs. Although the People's Daily termed the institute, founded in 1949 upon the suggestion of then Premier Zhou Enlai, a "nongovernmental organization," there is no doubt that its views reflect those of the Chinese government.

Li, a career diplomat whose last overseas posting was as ambassador to Surinam, used strong language, terming the military action against Iraq "a contemptuous breach of the basic norms of international law." He termed the war "illegal, unjust and unjustified," adding it "violates fundamental principles of the United Nations Charter and international law."

Li said "the real purpose" of the war was not to disarm Iraq, but "to control Iraq and proceed to dominate the strategically important Persian Gulf region with its links to Europe, Asia and Africa, to control strategic oil resources and to deal hard blows to nations that adopt a hostile attitude toward the United States."

What worries China isn't so much what may happen to Hussein as what may follow after the subjugation of Iraq. Beijing has to calculate how its interests would be affected by a Persian Gulf region dominated by the U.S.

More immediately, Beijing is concerned that the U.S. may take further military action after Iraq, perhaps against North Korea or Iran, countries that U.S. President Bush has grouped together with Iraq as an "axis of evil."

While Beijing is calling on the U.S. to stop the war, it knows that Washington is unlikely to do so until Hussein has been overthrown. Thus, realistically, Beijing would prefer a quick U.S. victory to a long, drawn-out war.

China is concerned that war will damage the peaceful environment that it needs to achieve its highest priority, which is to continue to develop its economy at high speed. If the war were to weaken the U.S. economy, for example, China's ability, in turn, to export and to attract foreign investment would be affected.

Furthermore, China is concerned that a war in Iraq that drags on for months could cause oil prices to shoot up at a time when Chinese imports of crude oil are increasing. About 60 percent of China's crude oil comes from the Middle East.

China is especially vulnerable because, unlike the U.S., it does not have a strategic oil reserve. The country is seeking to diversify its sources of oil imports and has also begun to set up an emergency oil mechanism, but the construction of a strategic reserve is likely to take years.

In the meantime, China will continue to maintain a stable relationship with the U.S., knowing that it has little choice but to do so, while at the same time doing what it can to support such countries as France and Russia to serve as a counterbalance to American power.

The visit by U.S. Vice President Dick Cheney later this month will give the two countries an opportunity to appraise their relationship and where they would like it to go in the months and years ahead. The Chinese view this as an important visit, since Cheney is known to be perhaps the most senior of the hardliners in the Bush administration.

Frank Ching is a Hong Kong-based journalist and commentator.


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