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The Interwoven Era: The US, China and its New Aircraft Carrier

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This article was co-authored with John Shea Dixon, a lawyer and freelance writer based in Los Angeles.

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What do a rusting Russian aircraft carrier, two top-ranking military officers, mounting trade deficits and half a trillion dollars in potential oil and gas in the South China Sea have to do with world peace?

Initially the authors of this article were preparing a short piece on the pending sea trial of China's first aircraft carrier on July 1st. By late June, the long-term implications of that ship on the balance of power in Southeast Asia and the escalating military aggression by China in the South China Sea had both become massive stories. Then an Act III surprise put an interesting spin on each of those stories, while demonstrating why our greatest deterrent to war today is how interwoven the world's economies are, especially between China and the US.

Where you could once say that the fraternal twins of the Soviet empire and the People's Republic of China threatened the world with their domino theory, the new domino effect posits mass societal change with the world turning towards iPads, Facebook, Lady Gaga, and those two crazy things called capitalism and freedom. The result? The Arab spring has sprung. Technology has reshaped the world around the flow of free information, free ideas, and free people.

But again, how is all this intertwined with a rusty, old aircraft carrier?

The Varyag -- China's first aircraft carrier

Appropriately, this story starts with the end of the Cold War in 1991 -- and straight business. When the Soviets halted payments for a new Soviet aircraft carrier being built in Ukraine, the country tried to sell it to the Chinese in 1992. The deal fell through under pressure from Japan and the United States. In 1998, the ship was finally sold for $20 million, with the contract specifically prohibiting the buyer from using the carrier for military purposes.

The buyer, a Hong Kong trading company named Chong Lot, announced plans to convert the ship into a floating casino and hotel complex in then Portuguese-controlled Macau. But as a 2004 Naval War College Review article reveals, Chong Lot's parent companies had secret connections to the People's Liberation Army Navy (PLAN). When the "privately-owned" carrier was towed into the Chinese port of Dalian, it was escorted to a heavily guarded PLAN dock. Two years later when it emerged from dry dock, it bore the same gray paint as all Chinese Navy ships, and no one talks of roulette tables anymore.

For almost a decade, the Chinese, with massive help from the Russians, worked to make the ship seaworthy. The China Post reports that at 67,000 tons, the carrier is two-thirds the size of the 100,000 ton American Nimitz-class flattops. Aviation Week notes the carrier has new living quarters and was refitted with new power systems, engines, radar, as well as long-range anti-ship cruise missiles, SAMs and close-in weapons systems (CIWS).

Want to see for yourself? Click on this Google search and this Xinhua article; scan military enthusiasts' pictures and this BBC video. China wants you to see this. For a real thrill, install Google Earth, and then scan down to Dalian, China at E121°36'41.76, N38°56'2.4". There nestled in the harbor sits the carrier, plain as day.

As the most visible symbol of China's increasing military power, China's first aircraft carrier was to conduct its initial sea tests on July 1st, the 90th anniversary of the Chinese Communist Party (CCP), with a formal launch set for October 1, 2012, the anniversary of the People's Republic of China (PRC).

Why the Carrier Worries So Many Countries

First, the Varyag is rumored to be rechristened as the Shi Lang, named after a Ming admiral who helped the Qing conquer the Kingdom of Tungning in 1681. Where was Tungning? Just look across the Strait.

Never one for subtlety, China has named its first aircraft carrier after an admiral who conquered Taiwan 330 years ago.

While the symbolism is almost comical, what really gives pause to generals and policymakers are China's strategic ambitions on the waterways. This January, the father of China's modern Navy, Rear Admiral Liu Huaqing, died at the age of 94. From 1982 until 1997, as China's top naval officer, Liu relentlessly pushed to modernize the Chinese naval forces. As the New York Times wrote, his goal was "to transform the Chinese Navy from a coastal defense force into what is known as a blue-water navy, capable of operating far from the home country."

For Liu, this meant China needed not one aircraft carrier, but several, with jets and supporting fleets of submarines, frigates, missiles, destroyers, AEGIS-level radar and satellite systems.

Just before retiring in 1997, Liu wrote that aircraft carriers (plural) were "extremely necessary" for China: 1) to protect its sovereignty and maritime resources, especially regarding Taiwan and the South China Seas; 2) to guard China's shipping and commerce regionally and around the world; 3) to keep up with its neighbors, India and Japan; and 4) to give China a decisive edge in any future naval warfare.

Although China today remains the only permanent member of the UN Security Council without an active carrier, Liu's advice seems to have fully taken hold inside the PLA.

China's Defense Minister, Liang Guanglie, told Japan's Defense Minister in 2009: "Among the big nations, only China does not have an aircraft carrier." A month later, Chinese Admiral Hu Yanlin told the China Daily: "Building aircraft carriers is a symbol of an important nation. It is very necessary...China has the capability to build aircraft carriers and should do so."

The Shi Lang/Varyag, by itself, will not challenge U.S. Pacific forces anytime soon. Admiral Robert Willard, commander of U.S. forces in the Pacific, recently said he is "not concerned" about the carrier. The reason is that a carrier by itself is easy target practice for anyone's missiles, jets or subs. China today has too few significant supporting submarines, destroyers, and frigates to form an effective carrier group.

Most experts believe the Shi Lang will be used for training China's naval pilots, and developing its carrier strategy. As the Financial Times writes: "China will need many years before it can effectively operate an aircraft carrier. 'Owning a carrier is one thing, operating one, or even a carrier strike group, is something completely different,' said one naval officer."

Still, as Admiral Willard told the Senate's Armed Services Committee, based on the feedback received from our allies in the Pacific, "the change in perception by the region will be significant."

The Dawn of a new Pacific Arms Race?

In a Global Times poll, more than 80 percent of China supports the idea of the country launching its aircraft carrier, while 57% say it will increase an arms race with the US, India and Japan.

The U.S. currently has 11 aircraft carriers at a cost of roughly $24 billion apiece. Italy has two. Russia, France, the United Kingdom, India, Spain, Brazil and Thailand each have one.

China has announced plans for four homemade carriers to be built by the 2020s. Thus, in ten years, China's number of carriers will leapfrog past most of the world's blue-water navies. China's carrier fleet will then indeed alter the Pacific geopolitical landscape, with little trouble securing passage throughout the South China Sea and Indian Ocean, or making the Taiwan Strait its daily trolling grounds.

And then there's the rest of its military. In 2007, the BBC confirmed that China successfully shot down a weather satellite. In 2009, the Guardian reported on China's newest nuclear submarines. In 2010 the Washington Times reported China was deploying a new anti-ship ballistic missile nicknamed "the carrier-killer." This January, the Wall Street Journal released pictures of China's first stealth fighter jet, and the BBC reports China's jets could rival the US's within as little as two to three years.

You cannot build this kind of technology without a large military budget, and China's has experienced unprecedented growth. The PLA now has an operating budget of US$92 billion, up 12.7% from its $77.8 billion budget in 2010, and nearly triple its 2003 budget of approximately $33 billion.

The South China Seas Dispute

China's rapid military growth does have widespread repercussions for a world already reeling from Japan's earthquake/tsunami to the EU crises and worldwide budgetary woes. Still, perhaps the greatest threat to world peace today may be the increasingly heated squabble over the South China Sea.

The South China Sea (SCS) sits in a pocket south of China and Taiwan, west of the Philippines, north of Brunei, Malaysia, and Singapore, and east of Vietnam. With the Mideast's oil tankers headed to China and the U.S., as well as all the Asian and American cargo ships plying these waters, this is the most traveled commercial sea lane in the world. That makes this area crucial to the national interests of every major country involved.

More importantly, underneath this sea are estimated oil reserves ranging from 28 billion barrels to 213 billion, with the potential natural gas yields even higher. All totaled, it's worth up to half a trillion dollars. It's not just the money; oil and gas are essential to the survival of every economy involved.

But who owns it?

The UN's Convention on Laws of the Sea (UNCLOS), signed by every country bordering the SCS except Taiwan, says a nation's territorial waters extend out 12 nautical miles from its shores; its "Exclusive Economic Zone" (EEZ) extends 200 nautical miles. This means that Chinese patrol boats may pass through the Philippines' EEZ under right of innocent passage, while the coast state retains exclusive right to explore and exploit its EEZ.

Since the tip of China lies over 900 miles north of the Malaysian shores, how does China claim well over 80% of the entire South China Sea, and most of the oil and gas reserves?

The problem is that each of the surrounding nations has for years been squatting on dozens of the archipelago's hundreds of islands and atolls scattered about the sea. Thus the overlapping territorial claims look like spaghetti strings, creating one entangled mess of territorial claims.

Tensions over the waterway are not just simmering, they're about to boil over. The Los Angeles Times has reported that since 2009 Chinese civilian vessels have increasingly confronted fishing and oil-exploration ships from other countries in these waters. In 2010 Secretary of State Clinton officially declared the SCS to be in US's national interest, calling for a multilateral solution. China told America to stay out, that it's only enflaming matters.

This March, two Chinese patrol boats threatened to ram a survey ship inside the Philippines' EEZ, as the Philippines scrambled jets overhead. In May and June Chinese vessels supposedly cut cables to Vietnamese oil exploration ships. On June 13th Vietnam conducted live-fire exercises off its coast. When the Philippines' offered blocks for exploration in its EEZ waters on June 15th, on June 18th China conducted "routine" live-fire naval drills in the SCS, threatening to oppose any attempts to drill in "its" waters. On June 21st Senator John McCain said the US must help the ASEAN nations build up their naval defenses to counter against an exploitive and encroaching China. Then on June 28th the Senate unanimously endorsed a resolution deploring China's use of force in the South China Seas, saying China's "pattern of intimidation" was not helpful. That same day, the Philippines and the US conducted joint naval drills, in part because of China's "encroachment" into Philippine waters. And on July 1st China planned to send its first aircraft carrier out into the Pacific, just as every navy in the region seemed to be on its highest alert in decades.

Fragile economies, a desperate need for oil and gas, vital shipping lanes and overlapping territorial claims. Plus an increasingly militaristic China launching an aircraft carrier with a name meant to intimidate an already anxious Taiwan.

But what happened next is astounding. On June 29th Beijing suddenly announced that US Joint Chief of Staff Admiral Mike Mullen, would visit China from July 9-13. Then, on July 1st, another surprise announcement - China's first aircraft carrier was delaying its sea trials until August. Since July 1st, there have not been any official statement or further incidents on the South China Sea.

Think these three are all connected?

But how do we deal with our largest trading partner, a country holding two trillion dollars of our debt? A country that this spring has suddenly ramped up both its rhetoric and military? Should we turn away from the failed negotiating tactics of brute force and towards the promise of honest diplomacy? And how will all this be impacted by the upcoming 2012 elections, when there will be rhetoric from the fear mongers and panda huggers alike?

Real Politik meets Interwoven Economies

First, we must recognize that between the dual superpowers China and the US, there are opportunities to be had, agreements to be made, mutual benefits to be seized. The most obvious reason is purely and unequivocally economic. While the U.S. government's debt toward the PRC is enormous, it is balanced by China's absolute need for access to the American market. There is lasting, mutual economic need between our two countries.

China's top trading partners are, respectively, the EU, U.S., Japan, ASEAN, Hong Kong and South Korea. Do we honestly think China would risk total economic isolation just to retake Taiwan, or go to war over the South China Sea's Spratly Islands? China's ambitions and need for South China Sea oil are limited by the country's need to maintain positive relationships with the world. The economies of the U.S., world and China are now so tightly intertwined that such linkage helps restrain military adventurism and pressures, if not the rhetoric.

Plus, it may not hurt that on June 16th, China and Russia announced they were close to concluding a trillion dollar gas deal.

Second, over the last several years, the US has been urging more communication and transparency between the two countries, particularly regarding their militaries. Presidential candidate and former U.S. Ambassador to China Jon Huntsman recently highlighted the role of increased military-to-military exchange in defusing suspicion on both sides. In January, Defense Secretary Robert Gates met his counterpart, China's Defense Minister, General Liang Guanglie in Beijing; they met again in Singapore on June 4th. On May 20th, the respective leaders of the Chinese and American militaries, General Chen Bingde and Admiral Mike Mullen, met in Washington.

While it's easy to be wary of China's military endeavors, Admiral Mullen stressed the importance of renewed dialogue to minimize the risk of misunderstanding. Mullen also said, "What [Defense Minister] Chen and I have both talked about is a future that is a peaceful future and a better one for our children and grandchildren. That does not involve a conflict between China and the United States." His visit this weekend is proof that dialogue has value.

Third, we are in an era of global convergence, an interwoven world where economies, cultures and lives are linked by movies, pop stars, and the Internet, by student exchange programs and international flight. While the PLA is notoriously opaque and Beijing has mastered the art of poker-face diplomacy, a recent study by one of this article's authors and Dean Ernest J. Wilson III of the USC Annenberg School for Communication and Journalism shows that China's behavior in the global arena was found to be moving closer in line with accepted international norms on economic, aid, and energy issues. That is, while divergence continues in areas of democratic reform and human rights, the most effective way long-term to limit erratic behavior on China's part is to continue developing the economic, political, and cultural ties that are inevitably bringing our two countries together.

China released two of its most famous dissidents, Ai Wei Wei and Hu Jia, just as Premier Wen arrived in Britain on June 26th. On June 27th, Premier Wen and British Prime Minister David Cameron announced US$2.2 billion worth of deals. For China, business can trump politics.

Henry Kissinger, the grandfather of Sino-American shuttle diplomacy, noted recently that, "the overriding reality is that neither country will ever be able to dominate the other," that both countries should subordinate national ambitions to the needs of a global world order.

The Interwoven Era, one of truly connected economies, politics, and people, has arrived.