As China grows more dependent on imports, its behavior will come to resemble Japan’s.

 

by Jacob L. Shapiro
April 19, 2018

It is exceedingly rare for a scientific study about deep-sea mud in the Pacific to have geopolitical import. But then, we live in crazy times.

Nature – one of the world’s most prestigious scientific journals – published a paper on April 10 analyzing a deep-sea mud patch near Minamitorishima Island, a small island in the Pacific off the coast of Japan, and concluded that the 965-square-mile (2,500-square-kilometer) mud bed contained such a high concentration of certain rare-earth elements that it could meet the world’s REE demand for almost a millennium. This is uncharted territory for Japan, a country driven to horrible extremes in the first half of the 20th century by its dearth of natural resources and still defined by its reliance on imports to this day.

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A discovery of rare-earth elements cannot eliminate Japan’s extreme reliance on imports. This is a country that imported almost 90 percent of its energy needs and 60 percent of its caloric intake last year, and REEs cannot power automobiles or be served for dinner. And even though the Japanese scientists who conducted the study believe the mud can be mined in the “near future,” academics tend to have a different sense of what the near future means than the rest of the world. REEs are not actually all that rare – they are just costly and environmentally destructive to mine. It will take Japan years to take advantage of this breakthrough.

Even so, the discovery is a major boon for Japan. REEs have become increasingly important for the production of everything from flat-screen TVs to advanced military weapons systems, and until now, Japan has depended on a risky source for its supply: China. China accounted for 80 percent of global REE production last year and has not hesitated in the past to use this as leverage over Japan, mostly recently in a 2010 dispute over a Chinese trawler that collided with a Japanese coast guard patrol ship in disputed waters near the Senkaku Islands. For Japan, this discovery kills two birds with one stone: It offers Japan a chance to curtail its reliance on foreign imports for a key natural resource while also potentially weakening China’s grip over the REE market worldwide.

 

Strength Through Self-Sufficiency

It is an ironic shift in roles between East Asia’s two major powers. One of the defining differences between China and Japan has always been China’s abundance of natural resources. This imbalance played a critical part in Japan’s invasion of China in 1931 and Japan’s development of a formidable maritime force in the 19th century because securing sea lanes and access to natural resources was (and remains) synonymous with Japan’s survival. China has an ideological bent toward self-sufficiency because historically it has been capable of self-sufficiency. That, however, is beginning to change, and as it does, the relationship between Japan and China will transform as well.

China has risen to global prominence on the back of its export-driven economy. But imports are becoming more important than ever for the Middle Kingdom. Mao Zedong wanted China to be strong, and for him, that meant self-sufficiency. This fixation on self-sufficiency did not change even after Deng Xiaoping opened China’s economy up to the world. In 1996, China’s State Council issued a directive to achieve 95 percent self-sufficiency in grain production, and this goal was affirmed in China’s Mid- to Long-Term Grain Security Plan released in 2008. But in late 2013, Beijing conceded that Chinese appetites had grown too large, and “moderate imports” became an official part of China’s national food strategy. Now China is the world’s largest importer of soy and, according to the U.S. Department of Agriculture, will become the top importer of corn by 2020.

Oil is another key area where China’s reliance on foreign suppliers is becoming more pronounced. Last year, China surpassed the United States as the world’s largest crude oil importer, a reflection both of increased U.S. domestic production and increased Chinese demand. In 2004, China imported just over 2 million barrels per day; last year, that figure rose to 8.4 million bpd. About 56 percent of Chinese oil imports came from OPEC countries in 2017 and 14 percent came from Russia, which means China has to consider both how to secure its maritime trade lanes to the Middle East and how to avoid becoming the Europe of the East, unable to challenge Russian ambitions because of its dependence on Russian energy. This will also make China particularly vulnerable to any power capable of blocking its access to these imports – the ultimate trump card in any U.S.-China trade negotiation.

 

Increasing Competition

These are problems with which Japan is intimately familiar. Japan, however, has a much smaller population than China and a more equitable distribution of wealth. China, and the myriad imperial dynasties that preceded it, has always had its hands full just with maintaining order at home. Building the type of maritime capability needed to secure far-flung resources is incredibly costly, and China is being forced to pour money and resources not into making sure hundreds of millions of Chinese living on less than $5.50 a day reach long-promised prosperity but into building and training a navy capable of protecting Chinese interests abroad, as well as building infrastructure in some of the most insecure regions of the world.

The more China becomes dependent on imports, the more Chinese geopolitics should begin to mirror Japanese geopolitics. And that necessarily means that China and Japan, which until now have established a pragmatic if uneasy working relationship, will increasingly compete over the same resources and trade routes. The REE issue is a perfect example. It is no coincidence that a week after the article in Nature was published, Japanese newspaper Yomiuri Shimbun reported that Chinese ships were carrying out illegal REE surveys in Japan’s exclusive economic zone. Japan’s new REE treasure trove is located near a coral atoll roughly 1,150 miles from the main Japanese island chain – an advantage for the Japanese considering that they can exploit resources there with little environmental impact for the country’s main islands. But it’s also a disadvantage because it makes the resources vulnerable to Chinese exploration.

Chinese-Japanese competition over resources won’t erupt overnight, or even in the next year. For every Chinese violation of Japanese waters or Japanese development of new military capabilities, there is another diplomatic meeting meant to show that the countries are still friends – consider the ministerial-level meeting held between China and Japan in Tokyo this week, after an eight-year hiatus in economic talks. Direct conflict is not in the interest of either side yet and may not be for years to come. But make no mistake: As China grows more dependent on imports, its behavior will come to resemble Japan’s. The REE discovery is exceptional news for Japan, good news for the world, and bad news for China. But the more important story here is the slow development of what we might call “Japanese imperialism with Chinese characteristics.”

 

— Japanese Imperialism With Chinese Characteristics originally appeared at Geopolitical Futures.