China’s “Blue Dragon” strategy seeks to upend Washington’s containment policy and breakout of strategic bottlenecks through leveraging national defence and development across four separate geographic frontiers. For Washington, addressing the China challenge must begin by rethinking policies no longer suitable to the challenge at hand.
To compete strategically with the United States (US) and undermine Washington’s Indo-Pacific policy, China has quietly been advancing its stealthy divide and conquer foreign policy agenda on four different but connected frontiers. The core of this comprehensive plan can be described as China’s “Blue Dragon” strategy, which is primarily anchored between two “unsinkable aircraft carriers,” Sri Lanka and Taiwan. The plan targets three bodies of water in the Indo-Pacific region and the major river systems in Southeast and South Asia originating from the Himalayas.
Despite Washington’s public denial of “containment” of China, the US has continued its “global spy operations” and increased its defensive military posture in the Indo-Pacific. The Biden administration’s recent reengagement of relations with Beijing emerges from the tense diplomatic hiatus following the Sino-Russian “no limits” pact in February 2022 and the US Airforce fighter jets downing of a suspected Chinese spy balloon in February 2023.
One question still remains: can a traditional containment policy prove effective in countering China’s ambitious Blue Dragon strategy?
An emerging global power
The first frontier in China’s Blue Dragon foreign policy strategy is related to territorial disputes over Taiwan and the Senkaku Islands (as known in Japan) in the East China Sea (ECS) and the Western Pacific Ocean. While continuing its operational air and sea activities encircling Taiwan and the cross-Strait region, China has been penetrating the ECS and beyond into the Western Pacific. The increasingly militaristic China has clearly been demonstrating its show of force to Taiwan, while simultaneously sending a purpose-driven message to the United States and Japan.
Armed with two aircraft carriers—the Liaoning and the Shandong—and a fleet of modern ships and aircraft, China’s unyielding pressure on Taiwan is closely tied to President Xi Jinping’s dedication to the “reunification” of the “breakaway province.” The Chinese government has explicitly stated that the “national reunification is the only way to avoid the risk of Taiwan being invaded and occupied again by foreign countries [and] to foil the attempts of external forces [i.e., the US] to contain China.”
The constant Chinese People’s Liberation Army’s (PLA) Navy and Airforce exercises mark an escalation of Beijing’s “gray zone warfare” in the Taiwan Strait, the Senkaku Islands, and even in the vicinity of US military bases in Okinawa and Guam. China’s Blue Dragon strategy includes “normalizing” Beijing’s territorial claims.
The maps, ships, and artificial islands
Beijing’s second frontier is linked to its militarised artificial islands in the South China Sea (SCS). With the release of the “new standard” map of China in August 2023, Beijing has claimed a vast swath of contested waters and reefs, reinforcing its “nine-dash line” in the SCS. China’s neighbouring countries—including India, the Philippines, and Vietnam—were infuriated by the new map.
In 2016, the Permanent Court of Arbitration in The Hague ruled in favour of the Philippines, rebuking China’s territorial claims, stating Beijing has “no legal basis” for “expansive claim to sovereignty over the waters.” The United States, the Philippines, and the global community at the time hoped that the landmark ruling would force Beijing to reconsider its claims and honour international law.
Since the ruling, China has continued its aggressive territorial claims with the publication of new maps, construction of artificial islands, and militarisation of the SCS. China’s escalating assertiveness has compelled the US to thwart Beijing’s expansion efforts. While the US has failed to ratify the 1982 UN Convention on the Law of the Sea, Washington continues in practice to operationalise its principles, maintaining that “all States [should] enjoy the freedoms of navigation . . . [and] lawful uses of the sea,” according to UN Articles 58 and 87.
Sri Lanka: the crown jewel of the “Western Ocean”
China’s third Blue Dragon frontier is associated with Sri Lanka, India, and the Indian Ocean—i.e., China’s “Western Ocean.” Beijing also continues to claim Aksai Chin and Arunachal Pradesh as Chinese territory. These claims are carefully devised to keep India perpetually restless and drain its military and financial resources rather than finding a permanent solution to the border conflict.
The northern encirclement of India is also strategically linked to China’s “Buddhist diplomacy” with Sri Lanka and its surrounding Indian Ocean. Beijing’s goal is to transform the Indian Ocean into the “Western Ocean”—the name that can be traced back to ancient Chinese literature and poetry. This tale of China’s “peaceful rise” and historical relationships is showcased in Sri Lanka, China’s other “unsinkable aircraft carrier.” Sri Lanka is the “crown jewel” of the Belt and Road Initiative, as evidenced by Beijing’s construction of the Hambantota Port, the Colombo Lotus Tower, and other massive infrastructures with loans to the island.
Sri Lanka continues to play a pivotal role between China, India, and America (CIA). When Sri Lanka was declared bankrupt upon the default of its international loans and other financial obligations in May 2022, it was India that provided the needed loan of US$3.8 billion. Out of concern for disclosing China’s “art of war” in secret dealings, Beijing has advocated a bilateral Sino-Sri Lanka solution and declined to involve a multilateral framework aimed at achieving a sustainable debt restructuring scheme.
Instead, China has announced the sending of the Shi Yan 6 PLA Navy ship to Sri Lanka in late October 2023, causing “concerns” in both New Delhi and Washington. In August 2022, India and the United States also expressed security concerns over Yuan Wang 5 ship’s berthing at the Hambantota Port, which is widely considered the next Chinese military base. US Senator Chris Van Hollen recently reiterated in Colombo that Washington is committed to protecting Sri Lanka’s sovereignty “whether it comes to a free and open Indo-Pacific or debt restructuring” by providing IMF assistance and supporting the Sri Lanka Navy to safeguard the island’s territorial waters. Thus, the “CIA” competition over Sri Lanka continues.
The Himalayas: From Mekong to Brahmaputra
Beijing’s fourth frontier is related to the “geopolitics of water” in the Brahmaputra River basin in India and Bangladesh and the mighty Mekong River in the Southeast Asia.
China has been using the rivers in east, south, and southeast Asia, derived from their tributaries in the Tibetan Plateau, to produce hydroelectric power through a vast network of river dams. However, the control over the sources of transboundary rivers, like Brahmaputra and Mekong, has also given Beijing significant geopolitical and geo-economic leverage against the downstream countries. With the expansion of its dam system, China has manipulated the water level of cross-border rivers, disrupting agriculture, farming methods, and transportation networks throughout Asia.
Beijing might keep using the powerful “water card” of manipulation against downstream countries, forcing them into various compromises and concessions. In other words, China possesses a “water blackmail” tool to pressure lower riparian countries and “punish” them for policies and actions which do not correspond with Beijing’s will.
Washington’s dilemma: to contain or not to contain?
China’s philosophy to win a war without fighting a battle is illustrated by a range of carefully designed tactics from Taiwan to Sri Lanka. The United States’ traditional containment methods stemming from the Cold War cannot be used in the context of an increasingly more versatile and powerful China. Today’s world is more closely interconnected by political and corporate lobbying as well as technology and trade than it was during the Cold War period. Thus, it is nearly impossible to divide the world into pro-American and pro-China camps, especially when the US-Sino trade regimes are inexplicably intertwined and expanding.
Washington needs to keep ahead of China’s scientific and technological advancements and maintain US security guarantees to its allies and like-minded democratic countries in the Indo-Pacific. However, American military cooperation—in the forms of Quad and AUKUS, or bilateral defence treaties with the Philippines and Vietnam—is not a panacea. The United States should treat its “small” allies and friends as partners in both military and economic realms. The Biden White House has now begun a “charm offensive” by courting the 18-nation Pacific Islands Forum aimed at curbing Chinese inroads in the South Pacific.
With its growing centralised power and autocratic mindset, Beijing might miscalculate by overestimating its military might and economic capacities with its ambitious plans augmented by “wolf warrior” diplomats. After all, while America’s containment policy contributed in part to the downfall of the Soviet Union, the autocratic empire in Moscow collapsed under the weight of its own miscalculations and weaknesses of the centralised system.
Unlike democratic governing systems that have naturally embedded self-correcting mechanisms—such as regular elections, multi-party platforms, and the freedom of expression—autocratic and centralised systems tend to erupt from the top, sideways, and the bottom like a volcano. In this worldview, perhaps, China might be “its own worst enemy.” The United States would be wise to sustain a highly agile containment policy through active partnerships with friends and allies while allowing Beijing to make its own mistakes and miscalculations.
The article was originally published by Australian Institute of International Affairs.