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A Chinese Foreign Ministry spokesman said Jan. 31 that Beijing hopes Egypt will return to “social stability and normal order” soon. China is watching the unrest in Egypt with interest. The protests have created economic concerns for Beijing, in that they could make shipping through the Suez Canal problematic and could affect overall stability in the region. Beijing has also taken its usual actions to censor politically sensitive material on the Internet.
China hopes Egypt will return to “social stability and normal order” as soon as possible, Chinese Foreign Ministry spokesman Hong Lei said Jan. 31. China is watching the situation in Egypt primarily out of concern for its economic interests in the Suez Canal and in wider stability in the Middle East. China’s censorship of Internet discussion and coverage of the protests has so far been standard practice, but Beijing is deeply concerned about social unrest within its borders and about the prospect that foreign powers could facilitate dissent in China.
China’s Economic Concerns
The most direct concern for China is that its growing investments in Egypt (reportedly totaling from $300 million to $500 million) could be jeopardized or that its trade through the Suez Canal could be affected. Social unrest that has intensified in Egypt since Jan. 25 began to disrupt port operations in Said, Alexandria and Domiat on Feb. 1 — Alexandria, which handles 80 percent of Egypt’s traffic, has stopped all shipments, apparently due to striking workers. China’s exports to Europe amount to roughly 20 percent of its total exports, and China accounted for about 20 percent of northbound traffic through Suez in 2009. The canal is the preferred route for ships heading from the Malacca Strait to Europe. At the moment the canal is still functioning, though some ships have avoided stopping in Egypt on their way through, and some shipping companies have halted operations at ports. South Korea’s Hanjin Shipping, for example, announced that it has rerouted some of its container vessels to avoid stopping at Egyptian ports for resupply while going through Suez, even though traffic through the Suez Canal has not been interrupted, according to news reports Feb. 1. But as protests grow in size and intensity there remains the possibility that Suez could see disruptions that would convince more shippers to avoid the risks entirely, though the United States claims it would intervene to prevent a total closure.
For China, while the threats to Suez are the most immediate, they are also the most easily avoided. The alternative to Suez, heading south around the Cape Peninsula of South Africa, adds an additional roughly 3,500 nautical miles to the trip, making a round trip take around 43 days instead of 34 days. Generally, Cape transit is preferred when fuel costs are not too high and when Suez tolls push the total Suez transit cost higher than that of the additional fuel and time (including costs of chartering a ship to make a longer trip) required to make the Cape transit — not to mention the advantage of avoiding piracy risks by taking the Cape route. But the political instability in Egypt clearly can affect the usual calculations over whether to take the Suez or Cape routes, making the Cape more attractive despite rising fuel costs. The costs vary considerably, and the two routes are used interchangeably based on circumstances, but the Baltic and International Maritime Council estimates the combined fuel and opportunity costs of going around the Cape at about $4 million more than Suez for container ships (and, less relevant for China, $8 million for very large crude oil carriers).
Threats to Internal Stability?
Beyond direct threats to China’s material interests, there is a murkier threat emanating from the spectacle of popular uprising and the potential that it could inspire dissatisfied social groups in China to take to the streets. To be clear, there is no concrete connection between Egypt’s unrest and China’s unrest, despite an abundance of tenuous comparisons in Western (especially U.S.) media. There is no evidence of substantial coordination between Egyptian protesters and Chinese dissidents. However, there is an abstract connection relating to a high degree of social dissatisfaction and relative lack of representative government, hence the fear of governments around the world, including China, that the unrest could prove contagious.
China has taken actions to suppress information relating to the Egypt protests, notably by blocking references to Egypt in popular micro-blogging websites like the one hosted by Sina.com. But so far the moves have been consistent with standard practice — China routinely censors Internet traffic and denies access to social networking services like Twitter and Facebook, and Beijing shut down Internet access to the Xinjiang region during the 2009 riots in Urumqi. After the Rose Revolution in Georgia (November 2003), the Orange Revolution in Ukraine (November 2004-January 2005), the Saffron Uprising in Myanmar (August-October 2007), the Twitter Revolution in Moldova (April 2009), the Green movement in Iran (June and December 2009), Kyrgyzstan’s 2010 reversal of the 2005 Tulip Revolution, rolling unrest in Thailand and the recent revolts in Tunisia and Egypt, China has become fairly familiar with handling the domestic perception of foreign instability. To do so, the central government uses a combination of blocking the flow of information, tightening domestic security and activating state press organs to denounce the misguided political liberalism and foreign (usually American) meddling that purportedly leads countries to such civil discord.
Nevertheless incidents of social unrest have become more frequent in China throughout the past decade, peaking most recently in large riots in Tibet in 2008 and Xinjiang in 2009. Moreover, inflation — the galvanizing force behind the Tiananmen Square democracy protests in 1989 — has re-emerged as a challenge after recovery from the global economic crisis. Inflation is hitting food, fuel and housing prices especially hard and generating considerably higher social frustration than usual, according to sources on the ground in China. Moreover, China is reaching a juncture of sorts as its economic model shifts, its current leaders approach retirement and internal divisions sharpen. During such a sensitive period domestically, Beijing is unlikely to relent in its suppression of information that could fuel the desire of some groups to act on their social, political and economic grievances.
Ultimately what is most concerning for China about the Egyptian situation is the danger that popular protests could have political ramifications that would increase instability in the Middle East. This could happen, for instance, through a regime change in Egypt, which would send waves across the region and beyond (though at the moment the military appears prepared to maintain its central place in, and control over, the regime). Or it could result from unforeseen developments in other countries. Since Tunisia’s president was toppled, protests have broken out in Jordan (where King Abdullah II sacked his Cabinet on Feb. 1 in anticipation of opposition protests), Yemen and Algeria. Protests could also erupt in Syria, Morocco, Bahrain, Iran and Pakistan. China, like many other major economies, imports the bulk of its oil from the Middle East and views instability in the region with anxiety, but unlike the United States, China lacks the ability to affect the outcome of political change in the region (and even the United States is limited in this regard).
Comment: The above is one explanation, I offer another. The USA Administration has made some incorrect assumptions based upon the beliefs that in the ME they hold the same values and thus motivations as we hold in the USA. The end result will be to offer 2-3 billion dollars in new aide to the ?next? Egyptian government, regardless of the fact the Muslim Brotherhood, a terrorist organization more evil than any other on the planet. Meanwhile China, anxious to solidify its ravenous need for oil and a desire to stop the escalation of oil prices will make its move to offer financial assistance to the "next" government. Russia, desiring to emerge once again as a ME player, s also making its move to capture the attention of the "incoming government"-the power vacuum created by the fall of Mubarak will be filled by enemies of the USA and anything Western. The decades old treaty between Egypt and Israel will be dismantled, the "new " government will go to the UN declare a new state of Palestine must be immediately created, the Obama Administration, unprepared to deal effectivly with this new power composition will "make deals" with all of Israel's enemies that will create a situation that places us in a "checkmate" posture. All bets are off when this occurs.
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