Captain Brian T. Molloy has served in the U.S. Army in Afghanistan and various posts around the U.S. He presently works as a Project Manager at the U.S. Army Corps of Engineers in Pittsburgh, PA. The opinions expressed in this article are his alone and do not reflect the official position of the U.S. Army, the Department of Defense, or the U.S. Government. Divergent Options’ content does not contain information of an official nature nor does the content represent the official position of any government, any organization, or any group.

National Security Situation: U.S. options towards the People’s Republic of China (PRC) as it continues to rise and increase its influence in the region surrounding the South China Sea (SCS).

Date Originally Written: January, 26, 2017.

Date Originally Published: March 20, 2017.

Author and / or Article Point of View: Author is an active duty U.S. Army Officer. Author believes in the use of force as a last resort and where possible, diplomacy should be the primary lever in influencing foreign powers.

Background: The U.S. and the PRC are currently playing out a classic dyadic relationship according to power transition theory[1]. This power transition theory is playing out in the SCS with the rising PRC asserting itself militarily and the declining U.S. attempting to reassert control of the region by addressing such military action with “balancing” actions. Recently U.S. balancing actions have utilized the military instrument of power with the Pacific Pivot[2] and freedom of navigation missions as the most visible. This U.S. response is playing directly into the beginning stages of a conflict spiral that so often follows with a power transition[3]. The idea of a military deterrent is often floated as the logical alternative to war. In this case, however, both of the major powers are already a nuclear power with a nuclear deterrent in place. This nuclear deterrent works to ensure that a direct conflict between the two would be unlikely, however, as we saw in the Cold War, this deterrent does not keep the powers from fighting through proxy wars. The options presented in this article assume rising influence of the PRC and a declining influence of the U.S., both militarily and economically, in the region. The SCS has become a potential flash point between the two powers as the PRC uses it’s military to claim land that is also claimed by longtime U.S. Allies in the region.

Significance: In an increasingly multi-polar global environment, regional powers such as the PRC are becoming a larger threat to U.S. interests throughout the world. The potential for conflict in the SCS represents the opportunity for the U.S. to either assert influence in the region or cede that influence to a rising PRC. Control of the SCS is essentially a trade-driven power move by the PRC towards its neighbors. As such, trade could be the primary focus of the response from the U.S.towards the PRC vice a more dangerous military confrontation.

Option #1: The U.S. and the PRC seek a strong bi-lateral trade agreement to replace the Trans Pacific Partnership (TPP) and the U.S. leverages negotiations on this trade agreement to provide security guarantees to allies in the SCS region.

With the downfall of the TPP the option to enter into a strong bi-lateral trade deal with the PRC is now open. Negotiating this deal requires nuance and the ability to intertwine defense and trade into an agreement that is both beneficial to all economically, but also sets limits on military actions seen to be provocative to the U.S. and its Allies in the region. Precedent for this sort of diplomatic economic deterrent action can be seen in post WWII Western Europe with the European Steel and Coal Community (ECSC)[4]. When complete, Option #1 would be an economic deterrent to conflict in the region. This economic deterrent will utilize trade agreements to ensure the U.S. and the PRC are entwined economically to the point that a military conflict, even a proxy conflict, would be too costly to both sides. This economic deterrent could be the action that needs to be taken in order rebalance power in the region.

Risk: The largest risk in entertaining this approach is that it opens the U.S. to the risk of an economic catastrophe if the approach fails. This risk would likely be unpalatable to the U.S. public and would have to be crafted carefully. Additionally, under the current administration, a trade deal similar to this could be difficult due to the ongoing rhetoric coming from the White House. Finally, this approach risks leaving long-time U.S. Allies no way to dispute their claims in the SCS.

Gain: This agreement gains the lessened risk of a conflict between the U.S. and the PRC and also has the potential for large economic growth for both sides. A mutually beneficial trade agreement between two of the largest economies in the world has the potential to remove the risk of conflict and simultaneously improve quality of life domestically.

Option #2: The U.S. can use its trade power to balance PRC influence in the region through encouraging the Association of Southeast Asian Nations (ASEAN) to trade as a bloc. This is essentially an Asian version of the European Union which can build multilateral trade agreements and also leverage economic sanctions to assert power in the region. Building ASEAN to be able to handle this would require a more inclusive membership of some of the more powerful Asian countries, Japan, and the Republic of Korea among them. This effort would require a radical overhaul of the ASEAN bloc but would benefit much smaller countries as they try to address the influence of the PRC.

Risk: The U.S., particularly under the current administration, is not a proponent of supranational organizations. In order for Option #2 to work the U.S. must have a stake in the game. Additionally, the U.S. risks losing influence in the region to the newly formed ASEAN economic power. There is the possibility that the newly formed ASEAN could forge close ties with the PRC and other trading partners and leave the U.S. out. Finally, the SCS is fraught with competing claims not only between the PRC and ASEAN members, but among ASEAN members themselves. Those conflicts must be worked out before the ASEAN bloc could effectively manage the PRC.

Gain: This option allows the U.S. to leverage the comparative power of an ASEAN bloc of mostly friendly countries to impose sanctions on the PRC on its behalf. In this way the U.S. is pushing regional allies take care of their own backyard while still maintaining influence in the region. The U.S. also benefits as it is able to trade effectively with a large number of Asian countries without entering into a free trade agreement like the TPP.

Other Comments: None.

Recommendation: None.

Endnotes:

[1] Garnett, J. (2010). The Causes of War and the Conditions of Peace, in John Baylis et al, Strategy in the Contemporary World: An Introduction to Strategic Studies’ (3rd Edition OUP 2010), (pp. 19–42). Oxford, UK: Oxford University Press; 3rd Edition

[2] Panetta, L. E., & Obama, B. (2012). Sustaining U.S. global leadership: priorities for 21st century defense. (pp. 2). Washington, D.C.: Dept. of Defense.

[3] Cashman, G. & Robinson L. (2007). An Introduction to the Causes of War. Patterns of Interstate Conflict from World War I to Iraq. (pp. 1–25). Lanham, MD: Rowman & Littlefield Publishers Inc

[4] Alter, K, & Steinberg, D. (2007). The Theory and Reality of the European Coal and Steel Community. Buffet Center for International and Comparative Studies, working paper No. 07-001