“Speak softly and carry a big stick: you will go far”.
President Teddy Roosevelt
November 25th, 2020. Geoeconomics is geopolitics. An event took place on Sunday, November 14th that could potentially change the lives of Europeans. Press coverage? Minimal. Three are two immediate strategic questions implicit in the creation of the Regional Comprehensive Economic Partnership (RCEP). What are the geopolitical implications and how does the RCEP relate to China’s also just announced fourteenth Five Year Plan?
A bit of history. The First World War was caused by the extreme Prussian-centric nationalism and expansionism of Wilhelmine Germany. However, Berlin also set in a motion a process that led to dangerous bloc mentality. With the fall of the wily Bismarck in 1890 the Dual Alliance, and then the Triple Alliance between Germany, Austria-Hungary, and for a time Italy, gradually went from being a defensive to an offensive pact as the domestic social and political pressures faced by the Prusso-German elite grew. By way of response the Franco-Russian Alliance was formed, which led in turn to the Entente Cordiale between Britain and France, and eventually the Triple Entente between Britain, France and Russia. Such an alignment would have been unthinkable a generation before. Something else happened. As the blocs formed every action taken by the states involved began to be seen through the narrow prism of military power. Hammers and nails and all that.
Geoeconomics: The Regional Comprehensive Economic Partnership
The geoeconomics. The fifteen nation RCEP could be possibly the largest free trade deal in history. Whilst it has not been China-led, the sheer magnitude of China’s economy and its ‘gravitational’ economic pull will inevitably mean it becomes China-centric. Whilst the RCEP does not completely eclipse the so-called Progressive Agreement for Trans-Pacific Partnership (CPTPP) because both the US and India withdrew (mistake?) the RCEP will further shift the centre of regional and thus world economic gravity towards China.
The RCEP involves some 30% of the world population and, critically for China’s domestic need to maintain economic growth, could see $209 billion added annually to world income and by 203 $500 billion to world trade. Whilst such growth is good news for COVID devastated Europe both the nature of it and the locus for its generation will also further accelerate the shift of wealth and thus power from Europe. Critically, for COVID-19 damaged economies in much of the Indo-Pacific, RCEP could improve access for many of the states therein to Chinese Belt and Road Initiative (BRI) funding, with all the geopolitical implications that would entail.
Geopolitics: The Fourteenth Five Year Plan
Now, the geopolitics. In March 2021 China’s fourteenth Five Year Plan will be revealed. From what is known thus far China’s aim will be to enhance economic, technological and supply chain security. Much of the Plan will be devoted to easing the rapid urbanisation driven economic gulf that exists between Chinese cities and the countryside, as well as between rich coastal communities and the rural poor. There will also be a significant part of the plan devoted to strengthening internal security, given the social unrest and many disturbances that have recently broken out. Beijing is particularly sensitive to the danger posed to the regime if the ‘contract’ established in the wake of the 1989 Tiananmen massacre breaks down. Under that ‘contract’ China’s burgeoning middle class accepted the political ascendancy of the Chinese Communist Party (CCP) in return for ever-improving living standards. Given the size of China’s middle class they matter.
Critically, the Plan will also contain major provisions for the further modernisation of the People’s Liberation Army (PLA), with the focus on “elevating the level of national security”. Given that Beijing sees Taiwan as part of ‘national security’ the implications for Taipei and regional strategic security could be serious. The specific aim of the Plan will be to transform the PLA from its current status as a twentieth century plus half-mechanised force still focused on old Communist-era military districts into a fully twenty-first century ‘informationised’ force designed to exert decisive theatre-wide influence and coercion. Given that the ‘theatre’ in question is the Indo-Pacific, by ‘influence’ the Plan clearly implies coercion of states therein (if needs be) and, in time, the exclusion of US forces. Central to the Plan will be the creation of a very large, high-end, integrated joint force, reinforced by civil-military fusion and a PLA Strategic Support Force. In other words, enhanced and sustainable military power projection allied to strengthened domestic resilience and people protection via the technologies of the new battlespace – hypersonic missile systems, artificial intelligence, drone swarms, bio and Nano tech, and super-computing leading to quantum computing.
Geoeconomics or geopolitics? China is no democracy and it would be easy for many in the global democracies to see all Chinese actions and the RCEP through the prism of Beijing’s increasingly aggressive military building programmes, its illegal seizure of islands in the South China Sea, its routine breaking of World Trade Organisation rules (most notably intellectual property theft), and its digital and other forms of offensive espionage. There will certainly be those around President Xi who profoundly believe that coercion works.
A wolf in sheep’s clothing?
There is another way of looking at the RCEP and, indeed, how it influences the politics and strategies that will be both explicit and implicit in the Five Year Plan. In the wake of the COVID-19 crisis and China’s aggressive ‘wolf warrior’ diplomacy, which has done so much to undermine trust in the Chinese state, Beijing has realised that China has much to gain by being seen to observe international rules and norms, which is precisely what the US and its Western Allies want. It is also why democracies in the region, such as Australia, Japan, South Korea and others, have signed up to the Partnership (the key is in the title). In other words, time will thus tell whether it is the RCEP or China’s Five Year Military Plan that will be the defining factor in both regional-strategic and by extension world security. At the very least, the RCEP should be given a chance to work some multilateral magic.
RCEP also establishes a template for a Biden Doctrine. For all the talk of climate change being the primary foreign policy focus of the President-elect’s team, it is China which will define the Biden Doctrine. As such, the Biden Doctrine will need to both engage China where and when Beijing observes the rules implicit in the RCEP, but if needs be confront and contain China when it does not. In other words, whilst RCEP implies risk and reward for all concerned (including India and the US) it also mitigates the tendency to see all Chinese actions through the prism of narrow militarism. Critically for the Americans New Delhi could well be in agreement with such an analysis.
At the same time, China will still be the overwhelmingly powerful force in RCEP, precisely because India and the US refused to join. There can also be no doubt that China sees itself in strategic competition with the US and the wider West. Such competition is implicit in the military modernisation aspects of the Five Year Plan. The test will be the extent or otherwise to which Beijing seeks to instrumentalise RCEP to exclude the US (and others?) from free trade in the Indo-Pacific, the world’s growth generator, and thus strengthen the perception of a US in decline. If it does then China’s stated aims in the Five Year Plan to strengthen China’s technological, economic and supply chain security will be decidedly anti-American, which in time would likely mean the RCEP falls apart.
Still, the Regional Comprehensive Economic Partnership is an important strategic demarche. It is also a success for the patient diplomacy of several mid-sized regional powers and the leadership of the Association of South-East Asian Nations (ASEAN), and should be celebrated as such. As such, the RCEP should also be seen as an attempt to use free trade to tie China into a rules-based multilateral framework of the type the West has consistently championed. The Biden administration, and the wider West, must also see the RCEP as a post-COVID geo-economic opportunity and treat it as such. However, there is always the chance it is also the harbinger of the geopolitical challenge that will be laid down in the Five Year Plan. In which case, the Biden administration would do well to remember the words of former President Teddy Roosevelt: “Speak softly and carry a big stick: you will go far”. One final thought. What a different world it would be if the Transatlantic Trade and Investment Partnership (TTIP) had been agreed. Ho hum.