Are U.S. and Chinese Interests Really Opposed in Iran and Myanmar?
Beijing is making moves to ensure regional dominance in Southeast Asia and oil supplies from the Middle East. It could be shooting itself in the foot.
Emma Ashford: Good morning, Matt. Did you hear that they’ve finally managed to refloat the container ship that was blocking the Suez Canal?
Matthew Kroenig: Hi, Emma. That’s too bad for the meme-makers on Twitter, but it’s good news for the global economy. What is your take on this episode?
EA: In all honesty, I was rather absurdly excited about the whole thing. I’m currently finishing up a book on oil and foreign policy. Chokepoints like the Suez Canal, the Strait of Malacca, and the Strait of Hormuz play a huge role in how we understand global energy security. And this incident provided more evidence for a central hypothesis of the energy security literature: Global markets are remarkably robust, and big shocks are as likely to arise from natural disasters or pure chance as military action. Within a day or so of the blockage, ships had rerouted themselves away from Suez, keeping the world economy humming.
MK: As usual, I see a bigger threat than you. For me, it is a reminder that we are far from the frictionless, flat, globalized world that Thomas Friedman and others dreamed about in the 1990s and 2000s. This was an accident due to high winds, but there are growing state-based threats to shipping, including Iran attacking Israeli ships and Russia spoofing GPS signals in the Black Sea. More broadly, China and Russia are attempting to rewrite international maritime law by brazenly asserting sovereignty over the South China Sea and the Sea of Azov, respectively.
Academic “hegemonic stability theory” maintains that U.S. unipolarity and the calm seas provided by the U.S. Navy have undergirded global trade and globalization for decades, but as a more competitive world takes shape, I am afraid that the high levels of global trade and investment (and standards of living) that we’ve taken for granted could be in jeopardy.
EA: Look, I agree with you that Friedman’s argument is mostly bunk. The world is not flat, and there will always be physical impediments to global trade, whether it’s a hurricane or a container ship captain who apparently can’t steer straight.
But military threats to shipping of the type you describe are both rare and of limited impact. That Israeli ship that was struck by a missile a few weeks back? It continued its voyage and reported only minor damage. These big ships can take a lot of damage, and as scholars have repeatedly assessed, it would be very difficult for a country like Iran to close the Strait of Hormuz.
MK: Iran could try to close the Strait of Hormuz, but U.S. Central Command would open it shortly thereafter and put the entire Iranian navy at the bottom of the Gulf.
EA: Right. They literally did that once before. The Tanker War started as a minor front of the Iran-Iraq War, with both sides attacking shipping. But by the time it was over in 1988, the United States had reflagged many foreign ships to give them protection, and it had conducted Operation Praying Mantis, which sunk or severely damaged about half the Iranian surface fleet. But my overall point is that we were all reminded this week of the fragility of global trade—that it does actually involve geography!—and that it nonetheless tends to bounce back well from shocks. We were also reminded of the limited utility of military force: Some Egyptian guy with a backhoe was briefly more important to world trade than the entire U.S. Navy.
Changing gears, though, we should really talk about Myanmar. I’m afraid things have gotten a lot worse since the last time we talked about it.
MK: Yes. It is a rapidly deteriorating humanitarian crisis. The military junta has opened fire on peaceful protesters and is conducting airstrikes against opposition-held territory.
When we last discussed this, I noted that the Biden administration faced a dilemma between defending democracy and human rights and seeking a pragmatic relationship with the new military government, in part as a counter to China.
This week’s horrors made the decision for them. The Biden administration has come down hard on the military regime. It is probably the right decision, but it is unlikely that it will succeed in restoring democracy to Myanmar, and there could be geopolitical consequences if it pushes Naypyidaw into Russia and China’s arms
EA: Myanmar is teetering on a knife-edge. There are indications that the opposition is considering violent resistance; certainly, various rebel groups in bordering regions are taking up arms again. I do think President Joe Biden’s response on sanctions is probably correct, but it will have limited impact. America just doesn’t trade enough with Myanmar to make sanctions bite.
And this is why I think it is so dangerous and damaging to view the conflict through the lens of great-power competition. It’s not clear that China really wants to back the military junta, either. More importantly, they have a strong interest in stability in a neighboring state that includes various key trade and energy transit routes. A civil war in Myanmar—which is where this might be headed—would be very bad for business.
So I think China and the United States actually have a lot of shared interests here, presuming they don’t let that incipient rivalry get in the way.
MK: As the world is seeing in Hong Kong, the days of Beijing preferring stability and revenue for China, Inc. above all else are over. President Xi Jinping wants control, and influence over Southeast Asia will be an essential early step for him to achieve his goal of dominating Asia.
EA: I’ll caveat this, as I am in no way an expert on the politics of Southeast Asia, but it seems to me an odd argument that China would prefer a potentially chaotic civil war to a slightly less amenable government in Naypyidaw. After all, countries have watched for a decade as Syria and Libya slipped into disaster because various outside powers funded and armed rebel groups and governments. With that in living memory, surely it makes more sense for the Biden team to work with China to mediate a more peaceful outcome in Myanmar, rather than pursuing absolute gains at absolute cost?
And that’s assuming that China even prefers the junta. There was an interesting article here in Foreign Policy a few weeks back that argued that not only is a civilian government more reliable for Chinese business interests, but it’s probably more easily susceptible to Chinese political meddling, too. It’s an interesting proposition, and it should cause us to rethink our notion that Beijing always prefers dictatorships. You could apply the same argument to North Korea. Perhaps China would prefer a weak semi-democratic North Korea to the current hard-line and erratic regime? Put it another way: Regime type and interests can sometimes be at odds. China’s influence in the region might grow faster in a region of weakly institutionalized democracies.
MK: But a democratic government in Myanmar would have a choice between Washington and Beijing. For the junta, China is now the only game in town.
Beijing is not too worried, because the military regime needs cash and has an incentive to protect China’s investments. The military has the guns and is firmly in control. Beijing has always been sensitive to sovereignty issues and outside powers toppling autocratic governments. It is very difficult for me to imagine Beijing working with Washington to throw out the military junta and restore democracy in Myanmar. And certainly Biden will not help Xi prop up the dictatorship. I just don’t see how the United States and China cooperate on this one.
EA: You may be right. I still think it’s worth a try.
But let’s move on and talk about all our other China problems. This week, the European Union and China each imposed reciprocal sanctions on one another’s officials, the EU in reaction to human rights concerns in Xinjiang and China in response. I find this interesting not so much for the underlying issues but for the fact that China is increasingly using sanctions in ways similar to the United States and its partners. Many people, including me, warned for a long time that indiscriminate U.S. sanctions would end up encouraging other states to create their own sanctions infrastructure; it’s finally happening.
MK: Wow. We couldn’t see this issue more differently. I view this as a positive step with the United States, Canada, the United Kingdom, and the EU imposing coordinated sanctions on China’s gross human rights violations. The free world is in a much stronger position if it approaches Beijing as a united front.
EA: Not quite. I think the European sanctions on China were entirely justified, and I’m pleased to see the united front here on Xinjiang. I’m just pointing out that there are consequences. Other states have learned from watching the United States that they can use sanctions in this way.
MK: But the Chinese sanctions were an own goal. Beijing sanctioned EU officials for “maliciously spreading lies and false information.” So, the free world sanctions China for crimes against humanity and Beijing retaliates because people said stuff that hurt its feelings.
This will only further damage China’s image in Europe and may even lead to the end of the big China-Europe investment deal.
EA: Again, I think you’re partially right.
MK: I am either unusually persuasive or you are unusually agreeable this week!
EA: Very funny. China’s retaliatory sanctions may well end up harming European-Chinese cooperation going forward. But I think they were also sending a clear message to Europe: We can sanction you, too. I don’t like it, but it’s pretty clear that sanctions are no longer only the purview of the United States and its allies.
China also signed a deal with Iran this week, which I interpreted as a sign from Tehran that they’re getting tired with the Biden administration’s pussyfooting around on the nuclear deal. China isn’t going to swoop in and save Iran from U.S. sanctions. It’s mostly interested in getting some cut-price oil. But the deal still represents a lifeline for Tehran and serves as a signal to Washington that other states won’t support hard-line restrictions on Iran forever.
MK: As Beijing’s relations with Europe’s democracies sour, it turns to forge a strategic partnership with the Middle East’s worst rogue state. The agreement itself was not terribly significant, but I do worry about Russia, China, and Iran—all revisionist autocratic powers in important geostrategic regions—forming a closer axis across many fronts.
EA: Is that an Axis of Rogues? That sounds pretty cool; it’s a pity George W. Bush didn’t think of that one. Yes, the agreement is not massively significant in itself. In particular, I think it’s worth noting that the Chinese have also signed deals with the Saudis and Emiratis. So I think it’s a stretch to call China’s highly multilateral approach to the region an axis.
MK: Yes. China is intent to increase its influence in the Middle East. Apparently, Beijing didn’t get the memo circulating in Washington that the region is irrelevant to great-power competition.
EA: I suspect the Chinese would be pretty happy to hear that the United States intends to stay in the Middle East indefinitely to defend their oil supply for free.
MK: On the contrary, Beijing views Washington’s tight relationship with the Gulf states as a major vulnerability that could threaten its energy supplies.
EA: Look, the China-Iran deal is entirely about that oil export relationship. I took it as a signal that China is not likely to be bound by the U.S. sanctions on Iranian oil much longer. It has already increased oil imports as the Chinese economy recovers post-COVID-19. You have to remember that the pre-nuclear deal sanctions on Iran were only successful because China, Japan, South Korea, India, and various European states all agreed to limit or lower their imports of Iranian oil. And if the United States fails to reenter the Iran deal, Washington may find much of its leverage on oil exports slipping away under concerted Chinese sanctions circumvention.
MK: On the Iran nuclear agreement, it is pretty clear that Biden wants to return to the deal and Iran is being intransigent. Tehran just rejected another reasonable proposal from the United States this week.
EA: Both sides are being performative in their insistence that the other side is to blame. But if America doesn’t reenter the deal, it will have no one but itself to blame. You’re always talking about swaying states away from China. Why doesn’t that approach apply to Iran?
MK: Iran was founded on resistance to the West and the United States. Tehran does not want to be Washington’s friend. There are some countries on the fence, but Russia, Iran, and China are firmly in the opposing camp. They see the success of the United States and the U.S.-led, rules-based international system as an existential threat. It would be nice to peel them apart, but that won’t work. So, Washington needs to work with existing allies and other like-minded states to counter Beijing, Moscow, and Tehran at the same time.
EA: Countries like Vietnam, you mean? If we’re opposed to all states founded in opposition to the United States, then I’m not sure why many in Washington are looking to Vietnam as a partner against China. To argue that our relationship with other countries can’t change is foolish. America has no permanent friends or enemies, only interests. Henry Kissinger got a lot wrong, but he got that one right.
In any case, I gotta go. I hear there’s a Suez Canal transit simulator, and I’m pretty sure I’m going to be a better captain than the guy piloting the Ever Given.
MK: I can’t wait. If you get stuck, you can count on me to come to your rescue with the world’s tiniest dredger—or embarrass you on Twitter with a trending meme.
Emma Ashford is a senior fellow in the New American Engagement Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. Twitter: @EmmaMAshford
Matthew Kroenig is deputy director of the Scowcroft Center for Strategy and Security at the Atlantic Council and a professor in the Department of Government and the Edmund A. Walsh School of Foreign Service at Georgetown University. His latest book is The Return of Great Power Rivalry: Democracy Versus Autocracy From the Ancient World to the U.S. and China. Twitter: @matthewkroenig