Recalibrating American Grand Strategy: Softening US Policies toward Iran in Order to Contain China

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Over the next decade, the United States will have to rethink its grand strategy as it addresses the challenge of maintaining its primacy as a global power in an increasingly multipolar world whose center of gravity has shifted to Asia. The task will be all the more daunting because significant fiscal and economic constraints imposed by a federal government debt that has mushroomed to nearly $16 trillion or about 100 percent of GDP, and a continuing economic slowdown that has been the deepest and longest since the Great Depression will force difficult tradeoffs as the United States seeks to realign and streamline vital national interests with limited resources. (1) The overarching national security objective of the United States must be crystal clear: to counterbalance and contain a rising China determined to be the dominant economic, political, and military power in Asia.

While China's rise will not be a straight line, its trajectory to great power status is obvious. (2) A twenty-first century version of a Greater East Asia Co-Prosperity Sphere with China at the epicenter is emerging. (3) China is the biggest economy in Asia, having surpassed Japan in 2010. (4) China is the largest trading partner of Japan, South Korea, Taiwan, Australia, India, and the ten countries of the Association of Southeast Asian Nations (ASEAN). Unquestionably, China is the economic engine of Asia, displacing both Japan and the United States. According to US government projections, China is expected to be the world's largest economy by 2019 in terms of purchasing power parity (which adjusts for cost of living) with a forecasted gross domestic product (GDP) of $17.2 trillion compared to an expected US GDP of $17 trillion. (5)

From a strategic perspective, the "Achilles heel" of China is its overwhelming dependence on Persian Gulf energy imports to fuel its rapidly growing economy. The sea lines of communication (SLOCs) over which these vital oil and gas imports are transported by tanker--from the Strait of Hormuz in the Persian Gulf to the Arabian Sea and Indian Ocean, continuing on to the Bay of Bengal and through the Malacca Straits into the South China Sea--is China's jugular vein. Virtually all Persian Gulf energy exports destined for China (as well as for Japan, South Korea, and Taiwan) flow through this route. Two important alternatives to the Malacca Straits are the Sunda and Lambok Straits in Indonesia linking the eastern Indian Ocean to the Java Sea which continues to the South China Sea. Another key energy route flows from Saudi ports on the Red Sea (principally the port of Yanbu) to the Bab el Mandab in the Gulf of Aden proceeding on to the Arabian Sea and the Indian Ocean and continuing to the Malacca Straits, or the Sunda and Lambok Straits. The five critical choke points--Hormuz, Bab el Mandab, Malacca, Sunda and Lambok--and the SLOCs linking them are controlled by the US Navy.

China's economic and military security is inextricably intertwined with its energy security. Since 2000, China has been a net importer of oil and gas, primarily from the Persian Gulf. China became the world's largest energy consumer in 2009, with 96.9 quadrillion British thermal units (BTU) of annual energy consumption compared to 94.8 quadrillion BTU for the United States. (6) By 2011, China surpassed the United States as the largest importer of Persian Gulf oil, importing 2.5 million barrels per day (bbls/d) from the region (representing about 26 percent of total Chinese oil consumption of 9.8 million bbls/d), overtaking the United States which imported 1.8 million bbls/d from the Persian Gulf (representing about 10 percent of total US oil consumption of 18.8 million bbls/d). (7) In fact, over half of US oil imports come from three countries in the Americas: Canada, Venezuela, and Mexico, with Canada being the single most important foreign supplier. (8)

The US Energy Information Administration (EIA) projects that by 2030 oil imports, mainly from the Persian Gulf, will represent 75 percent of total Chinese oil consumption. …