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2009: Expect China to Flex Muscles on Earth, in Space


By Richard Walker

In 2009, China will continue to use its massive wealth to expand its influence and its search for natural resources in countries across the globe. It will also work hard to gain the upper hand in the development of weapons in outer space.

On land, China’s business activities throughout Africa and Latin America speak to its recognition since 1993 that it needs to import a lot of oil to fuel its economy on the march to superpower status and also needs constant supplies of other natural materials such as wood and iron ore to rebuild its infrastructure.

Those needs have helped prioritize the key elements of China’s foreign and economic policies, which are not only aimed at buying influence and raw materials but also at presenting China as a global player and a more generous friend and partner than the United States. To that end, China has offered loans without strings attached to countries throughout Africa and Latin America, and especially to those nations rich in oil and gas in zones ignored during the two terms of the Bush presidency.


For example, in 2007 China used its foreign exchange to buy $300 million in Costa Rican federal bonds in exchange for Costa Rican closing its embassy in Taiwan and expelling Taiwanese diplomats. In September 2007, Angola received $837 million as the first part of a $2.1 billion loan from the Chinese. In the opinion of western banking experts there were no
strings attached to the loan, thereby undermining the International Monetary Fund and western lending institutions.

When China makes many of its loans, it also provides grant aid for infrastructure projects in order to improve road and rail links for the flow of natural resources to airports and seaports so materials can be transported more speedily to China. In countries that do not have laws requiring local labor for such projects, China flies in Chinese labor, including engineering experts from the Peoples Liberation Army (PLA).

While it goes about its business globally, China at the same time maintains a seemingly cooperative relationship with the United States, taking care to appear supportive of U.S. concerns, especially when they relate to the global war on terror. At the same time, however, China’s economic dealings worldwide are designed to undermine the U.S. by providing the kind of package deals that poorer nations long for. For instance, when China offers loans without strings attached, the loans are part of a package that also includes military assistance, weapons, trade agreements, cultural exchange programs, medical aid and help with infrastructure development.

The PLA is at the apex of China’s economic foreign policy, with the focus directed at building links into Africa, Latin America and Southeast Asia. In 2008, China signed two trade agreements with Peru and Costa Rica and it has also outlined plans to spend $100 billion on Africa projects by 2010. According to China’s Commerce Ministry, trade between China and sub-Saharan African totaled $59 billion in 2007. That represented an annual growth increase of 30 percent. U.N. statistics show that by the end of 2007, China had spent almost $100 billion in investments abroad.

Presently, China is using its huge cash reserves to forge economic links with countries that include Nigeria, Russia, Zambia, Kazakhstan and Thailand. Unlike the United States and American private investors, China is always ready to risk large sums of money to get what it wants. It is also willing to do business with rogue regimes, which have control over natural resources.

The Chinese use debt relief and development grant aid as the major tools to get their feet in the door in many parts of the world. But they have also been doing business right under the nose of the U.S.

in the Middle East. In 2008, China’s national petroleum company, CNPC, signed a $3 billion contract with the Iraqi government, giving Beijing a 75 percent stake in oil
pumped from the Adhab oil field. At the same time, China waived payments on loans it had made to 33 countries worldwide and passed on a debt of $10 billion it was owed by Iran.

It even gave Iran $7 million to spend on education and public health projects. Iran’s debt mattered less to China than the fact that Iran sits on a fifth of the world’s oil and gas reserves.

In many instances since 2001, the committee of the ruling Communist Party in Beijing agreed to projects abroad on the advice of the PLA, which identified areas of the globe ripe for investment, notably Africa and Latin America that were being ignored by the Bush presidency.

In tandem with economic loans and grant aid, China allowed the PLA in many cases to develop strategic relationships with countries that were benefiting from China’s largesse. A striking example was the PLA’s role in working with Brazil and Argentina to jointly develop communications and surveillance satellites. The militaries of both countries are due to engage in joint exercises over the next 18 months.

Meanwhile, China sells those nations, as well as Venezuela, conventional weapons at knock-down prices.

While all of this should be of great concern to the incoming Obama presidency, a more pressing issue is how China has, without too much public exposure, used its wealth to match the U.S. in rocket, satellite and anti-satellite weaponry.

While the U.S. is not due to go back to the moon until 2020, China may get there in the next three years, using a robotic rover, with a manned mission possible in 2015. That would signal the fact that China has made immense strides in its space programs, some of which could eventually pose a major security threat to the U.S. and its allies. Put simply, China has streamlined its outer space activities by having them routed through the PLA, whereas America has a virtual division of resources allocated to the Pentagon and NASA.

There are rumors that the incoming Obama administration may seek to develop its own streamlining by forcing NASA to work with the Pentagon on rocket development. China has also been able to increase the size of its space development plans by raising tens of millions of dollars through the provision of launch facilities to countries like Brazil.

China sees outer space programs as a way of expanding its global communications and more importantly as a means to gaining a strategic advantage by overtaking the U.S. in creating space weaponry. The sheer scale of China’s space program can be explained by the fact that it now employs 200,000 engineers and every satellite it launches has a dual capability to allow for military surveillance usage. Some experts believe that China could gain the upper hand in space over the next decade by developing more sophisticated anti-satellite weapons than the ones it already possesses. It could also build satellites capable of jamming U.S. hardware in space.

In those circumstances, China would have an edge over the U.S. and its allies in battlefield situations since global satellite communications are an integral element in deciding the outcome of modern conflicts. A recent report to Congress warned about this issue and quoted Jing-don Yuan, a professor at the Monterey Institute of International Studies. He said China had concluded that outer space was an essential arena for future warfare and was important not only for intelligence gathering but also for enhancing command and control of combat forces. In 2008, China launched 15 new military satellites.

Richard Walker is the pen name of a former news producer.

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(Issue # 3, January 19, 2009)

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