Commentary on Political Economy

Saturday 1 May 2021


China will outflank us if we don’t get smart

Pundits and public figures keep drawing analogies between now and the 1930s. Scott Morrison declared last winter that he was haunted by the 30s. Australian National University emeritus professor of strategic studies Paul Dibb, foreign editor Greg Sheridan and editor-at-large Paul Kelly have all recently evoked the same spectre in these pages.

It’s not difficult to see why someone might do this, but we shouldn’t get too caught up in such analogies. We are in the 2020s. The differences between now and the 30s are at least as striking as the similarities.

We are living with the economic and social consequences of something roughly similar to the Roaring Twenties followed by the Wall Street crash and the Depression. Neo-authoritarianism — from China and Russia to Turkey, Iran, Hungary and Poland — does bear a disconcerting resemblance to the 30s rise of fascism. The man most likely to head up our Defence Department, Mike Pezzullo, warned this week of the beaing of “drums of war”, again alluding to the 1930s.

Moreover, Western democracies appear to be floundering socio-economically and geopolitically, though Joe Biden has embarked on a replica of Franklin Roosevelt’s 1933 New Deal in the US. Meanwhile, Russia and China are becoming increasingly aggressive and dangerous in terms of military capabilities, while Turkey and Iran are revisionist and belligerent.

Above all, China openly is talking up a new world order and the use of force. It’s cracking down on all forms of dissent domestically and engaging in aggressive diplomacy. Its annexation of the South China Sea has been likened to the Nazi reoccupation of the Rhineland in 1936. Its suppression of freedom in Hong Kong is similar to political repression in fascist states. Its persecution of the Uighurs is horrific. Its threats and demands regarding Taiwan look disturbingly similar to Nazi Germany’s pressure on Czechoslovakia in 1938.

Should China be appeased or accommodated? Wouldn’t that be like Munich all over again? Ah, Munich, the hardy perennial. In fact, once we get beyond generalities of the kind just listed, we need to think through 30s analogies with considerable care. Overdoing alarmist analogies could generate misunderstandings and confused judgments that would make things worse.

Not the time or place

To begin, we should be asking ourselves: if we are in the 1930s, when in the 30s do we think we are in 2021 — 1931? 1933? 1936? 1938? Heaven forbid we think we are in 1939, though the thought experiment could be bracing. But even more important, where do we think we are in the 30s — Europe or Asia? That makes a considerable difference. And which players right now are supposed to resemble whom in the 30s, exactly?

In Europe in the 30s the big problem was Germany, with Russia under Joseph Stalin an equivocal power. Now Russia is the big problem, while Germany, hamstrung by its militaristic past, has difficulty taking leadership in security affairs.

In Asia, it was Japan’s annexation of Manchuria in 1931 and invasion of China itself in 1937 that unsettled the existing Western colonial-dominated world order, in so far as the world had been “settled” since the Opium Wars (1839-42 and 1853-60). Now China is resurgent and revisionist, while Japan, like Germany, is a US ally and somewhat hamstrung militarily by its own militarist past.

Even if we glibly declare that Russia and China now are the problems Germany and Japan were then, we’d have to ask which one is which. Analogies don’t get us terribly far, really.

For one thing, China is the bigger problem in multiple ways and Russia, if you leave aside its nuclear arsenal, is more like Benito Mussolini’s Italy than Adolf Hitler’s Germany in the larger scheme of things. China, conversely, is perhaps superficially like Hitler’s Germany, but it is very much China and, unless we analyse it on its own terms, we are liable to get ourselves up to our necks in confusing and inflammatory rhetoric rather quickly.

Beijing's secret navy revealed in South China Sea

Experts claim China has a secret navy that exerts its territorial claims in the South China Sea and beyond.

Moreover, the differences between the condition of Asia now and in the 30s are enormous. In the 30s, China was deeply divided and impoverished while the rest of Asia, other than Japan, consisted chiefly of European colonies — British, French, Dutch, American.

In 2021, Asia consists of a large number of vigorously independent, mostly prosperous and strategically watchful states. Japan might be constrained in military terms and mired in debt, but it is a highly affluent and actually well-armed state.

Furthermore, as a direct consequence of World War II, US power became entrenched in East Asia and the Pacific basin, as well as in Europe. The string of US bases from the Aleutian Islands, via South Korea and Japan, the protectorate of Taiwan, Guam, other islands in the South Pacific and, not least, Australia, form a kind of cordon sanitaire or Maginot Line constraining Chinese military action. There was nothing like this constraint on Japan in the 30s; least of all from 1940 after Hitler’s victories in Europe.

The alliances set up under American leadership at the beginning of the Cold War remain in place, even if in need of buttressing. They include nuclear deterrence and early warning. None of those things existed in the 30s.

During the Cold War, things came perilously close to general nuclear war several times and there were bloody “small” wars at regular intervals (most notably the Korean and Vietnam wars in Asia, the Six-Day and Yom Kippur wars in the Middle East), but the line held.

There are other, less reassuring differences between the 30s and now. In the 30s, Germany was flanked by major powers and was able to embark on a continental war only because of the pacifism of the Western powers and their alienation from and wariness of Stalin’s Soviet Union. Vladimir Putin’s Russia does not face enemies on both flanks and is highly unlikely to precipitate a continental war. Dealing with its territorial revanchism and mischief-making, therefore, is a different strategic challenge than dealing with Hitler. Those seeking to contain Putin need to keep their wits about them rather than rushing into analogies with the 30s.

In Asia, China is vastly more powerful vis-a-vis its chief strategic rival than was Japan in the 30s. Even the most militaristic of Japan’s leaders in 1940-41 knew that going to war with the US was a losing proposition. Japan’s militarist prime minister, Hideki Tojo, knew in 1941 that Japan could not win a protracted war with the US.

There is a dangerous opinion in China that the opposite is now the case: the US either won’t go to war with China or would lose a protracted struggle with it. That opinion could be correct — which is the biggest cause for concern in the 2020s.

Matsuoka’s mistake

Rather than drawing sweeping analogies with whole courses of events, we would do better to immerse ourselves in histories of strategic decision-making in the 30s and ponder the complexities and paradoxes involved.

This is what makes the study of history useful. History, as they say, doesn’t repeat itself. Sometimes, however, it rhymes. Barbara Tuchman’s The Guns of August (1962) about how World War I got started is such a study. Famously, someone put it into the hands of president John Kennedy in the summer of 1962. He read it a few months before the Cuban missile crisis. By his account, it helped him pause and think better on the brink, in October that year — and so avoid starting a nuclear war.

In Japan and Germany in the 30s, grievance-based historical narratives were force-fed to the public and paved the way to war. Today’s “wolf-warrior” diplomats in China had their counterparts in 30s Japan. Few embodied this more than Yosuke Matsuoka (1880-1946), an American-educated, English-speaking Japanese diplomat of considerable ability and accomplishment.

Matsuoka served in the Japanese embassy in Washington, attended the Versailles Conference in 1919, held significant economic development positions in Manchuria in the 1920s and led Japan’s delegation that stormed out of the League of Nations in 1933, after he famously defended Japan’s annexation of Manchuria against what he denounced as the racism and hypocrisy of the Western powers. Throughout the 30s, Matsuoka urged that Japan ally itself with Germany and Italy against the Western powers to change the international order in its favour.

Giving China a 'free ride' while we 'handicap our economy' is 'gobsmacking in its naivety'

Qld LNP Senator Matt Canavan says it is just "gobsmacking in its naivety" to allow China to have a "free ride" while Australia and other countries handicap their own economies and industries.

In 1940 he became foreign minister. In April that year he engineered the Tripartite Pact with Germany and Italy, the chief aim of which, from his point of view, was to deter the US from obstructing Japanese imperialism in Asia.

In early 1941, unaware of Hitler’s plans to invade the Soviet Union, he sought to bring Moscow into that pact to add weight to this deterrent effect. What he got was a neutrality pact with Moscow.

However, when Hitler stormed into Russia in June-July 1941, Matsuoka urged that Japan help knock Russia out altogether by invading it from the east. He was overruled by those who were intent on striking south rather than north and he fell from power.

When they went to war with the US in December that year, he had a change of heart, declaring that the Tripartite Pact had been the biggest mistake of his life. Too late, he realised that he had misread the strategic situation and that Japan was doomed to lose the consequent war.

Think better

Matsuoka has many Chinese counterparts right now. They want to impose a new world order, despite the enormous benefits the Pax Americana has brought to China since it dispensed with Maoist autarchy and entered the global marketplace in the 1980s.

They think their hour has come. They want to exploit a golden opportunity to turn the tables on the American-led world order. They have potential allies, as Japan did back then.

There are few better accounts — not only of Matsuoka’s thinking but that of many of his contemporaries on all sides in the 30s — than Ian Kershaw’s Fateful Choices: Ten Decisions That Changed the World 1940-41 (2007). The 30s were over by the time these fateful decisions were taken, but such fatefulness could be where we are headed unless we think better than many world leaders did back in those days. It’s in that overall sense that we can benefit from looking to the 30s for lessons.

Meanwhile in Europe, in 1939-40, a set of decisions had been taken that led to the collapse of France in a manner that has become proverbial but is in general poorly understood. Ernest May’s Strange Victory: Hitler’s Conquest of France (2000) examines the thinking that took place in Berlin, Paris and London, leading to the debacle for the Western allies of May-June 1940.

Lesson of Maginot

Hitler had planned a frontal assault on the Maginot Line and Flanders. His general staff were convinced this would result in German defeat. Instructed to come up with an alternative, they set to work in their underground command centre at Zossen, outside Berlin. They devised Plan Yellow — a deception operation and an offensive through the Ardennes to outflank the Maginot Line and the British in Flanders.

They thought even this was a huge gamble, with only a 10 per cent chance of success. But it worked because of human error in Anglo-French intelligence assessments, which is what they’d gambled on.

This is worth studying now because Xi Jinping is putting China on a war footing. His general staff know that going to war would entail the probability of huge costs with no guarantee of victory. For years, therefore, its leading planners have been working at stratagems for winning without fighting, or outflanking the American equivalent of the Maginot Line through asymmetric and unconventional warfare, cyber and information warfare.

May’s Conclusion: Why? And What Can Be Learned, published a year before 9/11, warned of the dangers of Ardennes-like strategic surprises. He was on the money — as we all discovered.

A formation of Chinese J-15 “Flying Shark” fighters fly over the aircraft carrier Liaoning during a fleet review attended by Chairman Xi Jinping.
A formation of Chinese J-15 “Flying Shark” fighters fly over the aircraft carrier Liaoning during a fleet review attended by Chairman Xi Jinping.

The stakes now are much higher. China is not al-Qa’ida or Islamic State, or even Saddam Hussein. It is a truly formidable adversary and has become so since the turn of the century, where before that it was not. It is giving us a great deal to think about and we need, very much, to think well.

That starts with not getting carried away by glib analogies or leaping to conclusions.

Paul Monk was head of the China desk in the Defence Intelligence Organisation and is the author of Thunder from the Silent Zone: Rethinking China (2005) and Dictators and Dangerous Ideas (2018), among other books.

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