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China Reaps Benefits From Our 5-Year War in Iraq

Author: Michael Moran
March 16, 2008
The Star-Ledger

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Marking the fifth anniversary of the Iraq War this week—the official date is March 19—will be a somber occasion in most quarters. In the run-up to this milestone, historians, economists, military tacticians, American presidential candidates and the people who elect them, have been pondering how much longer American troops will remain in Iraq, what the ultimate goal should be, and what the final price may be in blood, treasure and American prestige.

None of these questions has easy answers. Economists disagree sharply on the long-term implications of the war for the American economy, as well as its ultimate cost in dollars. Military strategists cannot agree on an exit strategy, or even on the conditions in Iraq which would enable an exit. And during this campaign year, political promises on the topic deserve even more skepticism than usual.

Whatever the final tally, in the wider world, some costs are clear. America’s enemies are enjoying a golden age. Iran’s influence surged ahead after we toppled Saddam Hussein in Iraq, replacing him with a government led by Tehran’s Shi’a brethren. North Korea has used its time to walk the final mile to the nuclear weapons club. Russia, a faltering democracy on the eve of the Iraq War, has slipped back to its authoritarian habit of portraying every move by the United States as a threat. Al Qaeda, battered but not beaten, smugly surveys the wreckage of America’s reputation abroad, which has suffered grievously since the Iraq War began. Even the unexpected resurgence of Fidel Castro’s ideas in Latin America, dressed now in the uniform of a Venezuelan colonel, belongs on the Iraq ledger.

Yet no country, arguably, has benefited as much in the long run from the quagmire in Iraq as China. In the period of a half decade, China has gone from rising regional power eager for American joint ventures and U.S. backing for its entry into the World Trade Organization into a nascent superpower whose influence, financial and otherwise, now looms large.

Beijing draws on its huge trade surpluses to buy raw materials and political influence in the developing world. If Beijing chooses, China’s sovereign wealth fund—i.e., the Chinese government’s investment fund—could swoop in and buy de based American assets like Countrywide Mortgage, New Century Financial or the AIG insurance group, to name just a few, and re coup the sales price through export earnings in a matter of days.

This has put China in the post- Iraq catbird seat. Yes, it too will suffer from America’s economic downturn—we are China’s largest market. But we shouldn’t confuse China’s cold with America’s influenza. China feels and acts immune. Already, China thumbs its nose at the West’s moralism in places like Sudan’s Darfur region or in its dealings with the dictatorial regime in Burma, often using Iraq as a counterpoint.

Its growing confidence can be seen in a new assertiveness at the United Nations, and most certainly will be on full display in this summer’s Beijing Olympics, where Chinese athletes are widely expected to lead the medals tables. This confident trend will increase, not de crease, as America’s wealth diminishes in relative terms, and foreign investors turn more and more of their dollars into euros, and China’s middle class begins to nudge our own in purchasing power.

In the wider political sense, China now markets itself aggressively as a genuine alternative model to the free-market, liberal- democratic one that supposedly won the Cold War. Its mix of see- no-evil diplomacy and checkbook capitalism wins applause from countries like Russia, Venezuela, Serbia and many Muslim nations that also embrace aspects of capitalism but reject the messy political freedoms that the West advocates.

“China and Russia represent a return of economically successful authoritarian capitalist powers, which have been absent since the defeat of Germany and Japan in 1945, but they are much larger than the latter two countries ever were,” the Israeli political scientist Azar Ghat wrote recently in Foreign Affairs magazine. “As China rapidly narrows the economic gap with the developed world, the possibility looms that it will become a true authoritarian superpower.”

Whether the Iraq War turns out to be an economic burden to America, it certainly came with what economists call “opportunity costs,” things not funded in lieu of war spending. A reasonable list might include education spending, more robust foreign assistance to places like Russia and Kazakhstan, “soft power” initiatives like microfinance, scholarships and literacy programs, and more serious attention to making the democratic model look viable to the many poor nations that emerged from the Cold War’s headlock uncertain of which path to chart.

Given all this, China may hope the Iraq War will go on for 100 years, or at least 20. As the Pentagon noted in February in its annual report on Chinese military power, “China’s leaders have described the initial decades of the 21st Century as a ‘20-year period of opportunity,’ meaning that regional and international conditions will generally be peaceful and conducive to China’s rise to regional preeminence and global influence.”

It is important to emphasize that Chinese power has not taken the aggressive military form that simplistic scaremongers like to stoke. China’s armed forces remain second-tier in quality, the report says, primarily defensive in their posture. What’s more, Beijing’s military spending is still relatively low even if the highest American estimate—$137 billion in 2007—is accepted. By comparison, the U.S. spent $450 billion on defense in the same fiscal year, not including another $120 billion spent on Iraq and Afghanistan.

Still, with its current resources, China has options. It continues to modernize aspects of its military which, American experts say, make sense if defense is the primary objective.

One possible exception to this could be Taiwan. Modernization of China’s amphibious landing capabilities and deployment of short- range missiles within range of Taiwan attest to this. But analysts still believe China lacks the capability, or the will, to take the island. Anyway, such a move would destroy the grand strategy of the “20 year opportunity” on which the country’s long-term power is based, not to mention its best export market in America.

Outer space provides another possible exception. Building on what it saw during the Iraq War, Beijing has emphasized anti-satellite weapons, and in January 2007, destroyed one of its own disabled satellites with a missile in what many U.S. officials took to be a shot across America’s bow.

“Destroying, damaging and interfering with the enemy’s reconnaissance/observation and communications satellites” is a major emphasis of Chinese military strategy today, according to the Pentagon report. But, again, for now these are defensive capabilities.

Looking forward, the direction China’s leadership takes, like the fate of America’s involvement in Iraq, remains an unknown. Whether a Democrat or Republican sits in the White House in 2009, Iraq and China will pose opposite dilemmas. How should America engage China? How should America disengage from Iraq? Five years from now, let’s hope we can point back to some truly good answers.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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