China's Military Is China's Government Is China's Companies: The Three Faces of the Chinese Communist Party

Since China began “opening” itself in the late 1970s to more global trade and to some form of capitalism, its “openness” to economic expansion has not been benign to the nations which are geographically near China. This post-Mao capitalism is not the neighborly free-market capitalism of other countries.

What is called a “company” or a “business” in China is simply a branch of the Chinese national government. It is owned and controlled by the Chinese Communist Party (CCP). In some cases, this ownership and control is explicit; in other cases, it is hidden, but nonetheless real.

In China, the civilian government, the military, the CCP, and numerous companies which power the Chinese economy are not separate entities, but rather different faces of the same group of powerful elites. In this way, the import and export businesses are seen as tools for the government’s political and military goals, and the CCP uses the military to create favorable situations for the import and export businesses.

The South China Sea is a central part of China’s Belt and Road Initiative. This program is designed to bring Chinese exports to various markets, and to ensure the availability of raw materials for import into China. The initiative includes both seaways and railroad connections on land. The South China Sea is one of the most important seaways — if not the most important seaway — not only for Chinese commerce, but for world commerce.

As far back as 2014, historian Robert Kaplan wrote:

The Russo-­Japanese War and the Pacific Theater in World War II were the upshots in significant measure of Japanese militarism, for which the seas offered no defense; in fact, the seas were fundamental to the expansion of an island nation that required large stores of oil from distant shores for its rampaging armed forces. But China, now the rising military power in the Pacific, demonstrates far less aggression than did Imperial Japan following the Meiji Restoration: even as China’s military (particularly its navy) expands, fascism as in Japan is almost surely not on the horizon in the Middle Kingdom. As for the comparison between China and Imperial Germany prior to World War I that many make, whereas Germany was primarily a land power, owing to the geography of Europe, China will be primarily a naval power, owing to the geography of East Asia. It is this geography, I repeat, that will foster the growth of navies, which, while a worrisome trend in its own right, is still not as worrisome as the growth of armies in continental Europe at the beginning of the last century.

The coordination between China’s military goals and its commercial goals allow it to present a seemingly peaceful front to the world as it seeks to develop better trade relationships with various countries, relationships which are allegedly mutually beneficial.

So it is, then, that the Belt and Road Initiative is a mechanism for China’s imperial ambitions: Chinese diplomats approach various nations around the world — so far, mainly in Africa and Asia, but South America will also be involved — with offers to help develop infrastructure. The Chinese will assist in building harbors, airports, railroads, and other facilities for commercial transportation. The Chinese present these projects as steps toward the development of reciprocal trade: China and the host nation will both profit from shared import and export arrangements.

Woven into these agreements are clauses requiring a minimum percentage of Chinese ownership, management, and control. The permanent presence of a Chinese military base in the region is also often required.

China offers such deals to developing nations, i.e., third-world nations, which are usually unable to pay for their share of the construction costs. China then generously offers to lend the money to the host nation. Once the construction is underway, it becomes clear that the host nation is unable to repay the debt. China then claims a larger share of ownership, management, and control as a consequence of the smaller nation’s default.

Thus China begins to build an empire.

Although much of this Chinese imperialist expansion is accomplished by economic means, the Chinese military is an ever-present backdrop. Military officers are often present at what is allegedly a meeting among civilian business executives. The message is clear: the third-world nations will agree to China’s terms and will comply with the stipulations of the contracts.

In order for the Chinese strategy to work, the Chinese military must expand. It must be able to reach various parts of Africa, Asia, and South America. It must control the most important sealanes. It must control the South China Sea.

In March 2022, the Associated Press reported:

China has fully militarized at least three of several islands it built in the disputed South China Sea, arming them with anti-ship and anti-aircraft missile systems, laser and jamming equipment and fighter jets in an increasingly aggressive move that threatens all nations operating nearby, a top U.S. military commander said Sunday.

The Associated Press spoke with U.S. Admiral John Christopher Aquilino, who released information from reconnaissance aircraft flying over the South China Sea and over the artificial islands which the Chinese military constructed there:

“I think over the past 20 years we’ve witnessed the largest military buildup since World War II by the PRC," Aquilino told The Associated Press in an interview, using the initials of China’s formal name. “They have advanced all their capabilities and that buildup of weaponization is destabilizing to the region.”

To control sealanes and to intimidate the nations colonized by China as part of the Belt and Road Initiative, the bases in the South China Sea extend the reach of the Chinese military.

“The function of those islands is to expand the offensive capability of the PRC beyond their continental shores,” he said. “They can fly fighters, bombers plus all those offensive capabilities of missile systems.”

China’s integration of commerce, military, and political systems requires global strategists to see Chinese companies as part of the Chinese army, and the Chinese army as tasked with enabling Chinese commerce.

In other nations, the military, the commerce, the government, and the political party are separate enough that they can agree or disagree with each other, and that they can put pressure on each other. In China, these are all simply different faces of the same power clique.

The world’s ability to understand and contain China will determine the extent to which the smaller nations of Africa, Asia, and South America are able to retain any sense of self-determination and democracy.

Coolidge Appoints Kellogg: Working to Preserve World Peace

Calvin Coolidge became the President of the United States in August 1923. A little more than four months later, he appointed Frank Kellogg to be ambassador to Great Britain. Kellogg had been an informal advisor to Coolidge’s predecessor, President Warren Harding. Kellogg was also part of the progressive wing of the Republican Party, and had been a senator representing Minnesota. It is a credit to Coolidge’s sense of tolerance that he was willing to work with Kellogg.

Frank Kellog served as ambassador for a little over a year. Then, in February 1925, Coolidge nominated him to be Secretary of State. In that office, Kellogg achieved several high-profile accomplishments, one of which is the Kellogg-Briand Pact, a treaty signed in 1928.

The treaty, which was the result of several years of negotiated diplomacy, had its strengths and weaknesses.

One advantage of the treaty was that the negotiators concluded it outside the framework of the League of Nations, so when that organization slowly declined, the treaty remained in effect. Another advantage was that it was a clear statement against military aggression and for diplomacy.

Its systemic weakness, however, was that it was the product of a somewhat naive desire for peace. Its lack of realism led to its being little more than an expression of a noble sentiment.

The factors which threatened peace between the two world wars were often economic. The Kellogg-Briand Pact failed to address those questions at all.

Yet, despite its weaknesses, the treaty served the purpose of identifying and networking those diplomats who had a sincere desire to preserve peace. In this context, it helped to promote post-war reconciliation among the belligerents, as historian Erich Eyck writes:

Der Kellogg-Pakt, zu dessen feierlicher Unterzeichnung Stresemann am 27. August nach Paris fuhr, war hervorgegangen aus Verhandlungen zwischen Frank Kellogg, dem Staatssektretär der Vereinigten Staaten, und Briand in den Jahren 1927 und 1928.

The idea for the Pact arose from two sources. First, French foreign ministr Aristide Briand suggested a two-party, bilateral non-aggression treaty between the United States and France. Second, Chicago Lawyer Salmon Oliver Levinson was in communication with President Coolidge and Frank Kellogg; Levinson suggested that a multilateral treaty would be better than a bilateral one.

In the event, Gustav Stresemann would become a key figure in the creation of the treaty. Stresemann had been the chancellor of Germany and served as its foreign minister during the years in which the treaty was negotiated, as Erich Eyck reports:

Einen Vorschlag Briands, durch einen französisch-amerikanischen Vertrag den Krieg zwischen diesen beiden Ländern auszuschließen, hatte Kellogg, beeinflußt durch die von dem Chicagoer Rechtsanwalt Levinson ins Leben gerufene Bewegung für „Ächtung des Krieges“ (Outlawry of War), zu dem Gegenvorschlag eines alle Großmächte umfassenden Vertrages ausgestaltet, in welchem sie auf den Krieg als Werkzeug staatlicher Politik verzichten.

The fact that the talks which finalized the treaty brought Stresemann into a closer working relationship with Kellogg synergized with other Coolidge-era diplomatic initiatives, all of which worked to maintain peace during the 1920s.

China and Russia: Putin’s Mission in Ukraine Also Serves as a Diversion to Hide China’s Imperial Expansion

Tracing the geopolitical developments which occurred during the first quarter of the twenty-first century requires precision and nuance, because situations can change significantly in the course of a single year. It is certainly true that those who watch China’s place among the major global powers must keep updating their assessment of the relations which China has with other nations.

One constant is China’s goal of dominating, and eventually owning outright, the South China Sea. At the dawn of the century, China’s approach was two-pronged: a strong military presence combined with an economic hegemony in the region, as Robert Kaplan wrote:

One high-­ranking official of a South China Sea littoral state was particularly blunt during an off-­the-­record conversation I had in 2011, saying, “The Chinese never give justifications for their claims. They have a real Middle Kingdom mentality, and are dead set against taking these disputes to court. China,” this official went on, “denies us our right on our own continental shelf. But we will not be treated like Tibet or Xinjiang.” This official said that China is as tough with a country like the Philippines as it is with Vietnam, because while the latter is historically and geographically in a state of intense competition with China, the former is just a weak state that can be intimidated. “There are just too many claimants to the waters in the South China Sea. The complexity of the issues mitigates against an overall solution, so China simply waits until it becomes stronger. Economically, all these countries will come to be dominated by China,” the official continued, unless of course the Chinese economy itself unravels. Once China’s underground submarine base is completed on Hainan Island, “China will be more able to do what it wants.” Meanwhile, more American naval vessels are visiting the area, “so the disputes are being internationalized.” Because there is no practical political or judicial solution, “we support the status quo.”

The quest to dominate the South China Sea was and is of a piece with the “Belt and Road” strategy, sometimes also called the “Road and Belt” strategy. This is a plan to develop massive railway and maritime infrastructures to support China’s export economy. This strategy would allow the already-huge export business to grow even larger, and allow China to dominate world markets.

The financing of the “Belt and Road” plan is done by offering to build shipping terminals, ports, and railway lines for near-bankrupt third-world nations. These countries pay for these gigantic construction projects by borrowing the money from China. Later, when the countries are unable to service the debt, China will exact in-kind payments, by stationing Chinese military in those countries, by forcing local populations to work in Chinese-owned factories for microscopic wages, by forcing those countries to trade exclusively with China, and by many other similar measures.

In this way, China hopes to build an empire for itself.

In this context, the Chinese military intimidation of the nations in the South China Sea region is key to the “Belt and Road” plan, because that region sees a large percentage of world trade move through its shipping lanes.

The small and vulnerable nations in that region look to a U.S. naval presence to keep some manner of check on the Chinese. But will the Chinese always feel constrained by an American presence to behave diplomatically?

“If that fails, what is Plan B for dealing with China?” I asked.

The specter of direct military confrontation between the U.S. and China is one possible outcome of China’s persistent bullying in the South China Sea, as Kaplan reports:

“Plan B is the U.S. Navy—­Pacific Command. But we will publicly remain neutral in any U.S.-­China dispute.” To make certain that I got the message, this official said: “An American military presence is needed to countervail China, but we won’t vocalize that.” The withdrawal of even one U.S. aircraft carrier strike group from the Western Pacific is a “game changer.”

So it was that by 2014, a tense situation had solidified in the region of the South China Sea:

In the interim, the South China Sea has become an armed camp, even as the scramble for reefs is mostly over. China has confiscated twelve geographical features, Taiwan one, the Vietnamese twenty-­one, the Malaysians five, and the Philippines nine. In other words, facts have already been created on the ground. Perhaps there can still be sharing arrangements for the oil and natural gas fields. But here it is unclear what, for instance, countries with contentious claims coupled with especially tense diplomatic relations like Vietnam and China will agree upon.

In 2014, however, there was a change in one variable in this equation. The relationship between China and Russia needed to find a new equilibrium in light of Russia’s armed occupation of Crimea. Observers wanted to know how China would perceive this armed annexation, and how it might change its relationship to Russia in this context.

China offered a pro forma statement supporting Ukrainian sovereignty, but blocked a resolution in the U.N. Security Council which would have reaffirmed Ukrainian sovereignty. Some news sources referred to China as a “passive” ally in this context.

When Russia began an outright military assault on Ukraine, observers were watching to see if China would support Russia’s invasion. Leading up to the attack, Vladimir Putin and Xi Jinping had projected the appearance of a growingly strong alliance. Would that appearance prove to be an illusion? Or would China stand by Russia, when nearly every other nation in the world condemned the unprovoked attack?

As in 2014, so also during the 2022 Russian attack on Ukraine, China made statements which seemed to honor Ukrainian national sovereignty. There was no obvious embrace of the Russian invasion by China, and no direct military aid by the Chinese military to help the invaders.

Yet again, China failed to support a resolution in the U.N. Security Council condemning the invasion. Only three weeks prior to the invasion, Putin and Xi Jinping issued a joint statement affirming their alliance. Russia seems to have waited until the Olympic games, hosted by China, were past: a possible favor to Xi? The Chinese government-owned and government-operated businesses have worked to find ways to prop up the Russian energy industry and the Russian banks in the face of sanctions by many governments around the world.

It appears that China is not losing any sleep over Russia’s naked and unprovoked aggression against Ukraine.

In return, Russia has made statements encouraging China’s claims on Taiwan.

More than Russian statements about Taiwan, China might appreciate that Russia has diverted the world’s attention. While the war in Ukraine has occupied mental and diplomatic energy, “China appears to be engaged in a “sprint to parity” to match U.S. land-based ICBM numbers,” in the words of Arizona’s Peter Wolf.

Economic sanctions against Russia are manageable for the U.S. economy, but U.S. purchases from Russia total merely 6% of what the U.S. purchases from China, as reported by a Wall Street Journal article in March 2022.

If China can consolidate its military and economic power while the world is watching Russia, the world might be surprised at what it finds when it resumes watching other parts of the globe. What will the U.S. do if China has an upgraded nuclear attack force and the economic power to seriously cripple the U.S. economy? Would the U.S. defend the nations of the South China Sea against a Chinese attack? Put differently, would the U.S. protect a major international shipping lane?

If the U.S. defends shipping routes in the area of the South China Sea, it could receive serious economic and military damage from China. If it doesn’t defend those global shipping lanes, the economic hegemony of the Chinese could be equally dangerous.

Dawes and Stresemann: Working to Keep the Peace in the Interwar Years

After the armistice of November 1918, and after the signing of the Treaty of Versailles in June 1919, the world experienced peace, but for the next two decades, this peace was sometimes precarious, not usually because of military ambitions, but more often because of financial hardships.

The complex agreements, which were the fruit of complex negotiations, included not only the famous Treaty of Versailles, but the less famous yet equally important Treaty of Saint-Germain, Treaty of Trianon, and Treaty of Sevres.

Far from a calm equilibrium these treaties left the world with simmering tensions which arose largely from the financing of war debt and the payment of reparations. To keep the peace, a number of skilled diplomats worked constantly during the postwar years to fine-tune and adjust various agreements between nations.

Among those diplomats were those officially appointed to international relations, like Frank Kellogg, and those whose roles were only tangentially connected to diplomacy, like Andrew Mellon — and then there were those who played major parts without being any part of the government: private-sector individuals like J.P. Morgan, Jr., who worked to stabilize the various European economies which were staggering under the burden of reparations and war debt repayments.

Two of these diplomats were singled out for recognition by the Nobel Peace Prize: Gustav Stresemann and Charles Dawes, as historian Erich Eyck writes:

Stresemanns internationales Ansehen als eines tatkräftigen Mitarbeiters am Werk des Friedens fand eine eindrucksvolle Bestätigung als das Nobel-Komitee des norwegischen Storthing am 10. Dezember 1926 beschloß, den Friedenspreis für 1926 den Außenministern Frankreichs und des Deutschen Reichs, Aristide Briand und Gustav Stresemann zuzusprechen, während der Friedenspreis für 1924 gleichzeitig Austen Chamberlain und General Dawes zuerkannt wurde.

Gustav Stresemann received the Nobel Peace Prize primarily for the Locarno Treaties, a series of agreements which finalized the borders among postwar European nations and normalized relationships between them.

Charles Dawes earned the Nobel Prize for the “Dawes Plan” which in essence refinanced the reparations which Germany was supposed to pay to France, making those reparations at least somewhat realistic, in contrast to the impossible demands made by the Treaty of Versailles and the London Schedule of Payments.

The original totals in the 1919 Treaty of Versailles and the 1921 London Schedule of Payments were so abusive that they were likely to provoke war, as historian Sally Marks writes:

The reparations totals discussed at the peace conference were astronomic, ranging to sixteen times the amount finally set. The British experts, Lords Sumner and Cunliffe, were so unrealistic that they were nicknamed “the heavenly twins.”

Men like Charles Dawes and Gustav Stresemann created more realistic and practical relations among the nations, and preserved peace for another decade or more, earning thereby the Nobel Peace Prize.