Gambling Man: Xi Jinping and the South China Sea


China’s President Xi Jinping is a gambling man.  He’s gambling that the West and particularly the United States will cave into Chinese demands over control of the South China Sea.  Xi is convinced that corporate interests in the U.S., Australia, Japan, and elsewhere will pressure their governments to accede to China’s territorial claims rather than risk war.  So far Xi has been proven correct.  The West’s response to China’s aggressive push into the Paracels and Spratlys has been both ambiguous and weak.

Xi’s recent actions raise an important question.  Specifically, why is he pushing so hard at this moment in history to assert China’s territorial claims to the South China Sea?  There are several possible reasons for Xi’s assertiveness.

First, the Chinese Communist Party (CCP) is currently suffering a crisis of legitimacy.  It’s a well-known fact in China that the CCP is riven with corruption.  The Chinese people are thoroughly fed up with the financial shenanigans of their leaders.  They know the economy is rigged to benefit the few at the expense of the many.  Additionally, China’s economy is tanking.  The peak growth years are over.  As the economy sputters, social and political discontent rises.  The people are questioning like never before whether the CCP can lead them into the future.  Consequently, Xi is manufacturing a crisis in the South China Sea to divert the public’s attention away from a growing list of domestic economic and political problems.  America is serving, as it did during the long reign of Mao Zedong, as a convenient bogeyman for the problems tearing at Chinese society.

Second, Xi understands that the global economy is teetering on the edge of a recession.  He may have calculated that the capitalist West will do all it can to avoid a military confrontation that will send the global economy into recession.

Third, Xi may have decided that China’s economic leverage over the West and the U.S. has reached its apex.  Thus, China must use its remaining economic leverage to break out from the U.S.’s military encirclement.  If the CCP waits too long to challenge U.S. hegemony in the seas south of the mainland, China will not have the economic clout to peacefully pressure the U.S. into concessions.  Instead, China will have to rely almost exclusively on its military to expand into the South China Sea.  Any exclusive reliance on military means to advance Chinese interests will increase the likelihood of war between China and the United States.

It’s notable that in the past year and a half, in a clear sign of China’s shrinking economic clout, the country’s foreign currency reserves shrunk from approximately $4 trillion to $3.23 trillion.  The decline in foreign currency reserves limits China’s ability to respond domestically to a future global economic shock.  It also puts a cramp on China’s international assistance programs – a key means of increasing China’s influence overseas.

Finally, Xi believes the United States is politically fractured and ineffectual on the international stage.  Xi knows the U.S. is horribly divided.  Wall Street doesn’t want war with China because of its huge investments in that country.  Obama can’t have a war and the recession that is sure to result from it because those two outcomes will harm the electoral chances of his chosen successor – Hillary Rodham Clinton.  Meanwhile, the American people hate their political leaders, don’t trust either party to solve their problems, and are in no mood for another war they know will enrich the military-industrial complex, while further impoverishing them.

Looking afield, Xi recognizes that the U.S. under Obama has suffered a string of defeats in the international arena.  The U.S. lost the war in Iraq, is presently losing the war in Afghanistan, has failed to depose Assad in Syria, and inadvertently turned Libya into a failed state and safe haven for ISIS terrorists.  Obama didn’t stop Putin in the Crimea, Ukraine, or Syria, nor has the U.S. been able to do anything about North Korea’s nuclear program.  Xi likely considers the United States a paper tiger and Obama a gun-shy lightweight.

So from Xi’s perspective, now is the time to aggressively expand into the South China Sea.  Of course, it remains to be seen whether Xi’s gamble will ultimately pay off.

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