China is winning the battle for the Red Sea America has retired as world policeman

Hardly for the first time, remote Arab tribesmen are reshaping the world. Piratical attacks on international shipping by Yemen-based Houthi rebels have created a significant security crisis in the Red Sea. The world’s largest shipping lines have been forced to suspend transit through the Red Sea and thus the Suez Canal. And with nearly a third of global container traffic typically flowing through Suez, this has seriously disrupted world trade. Yet the most enduring impact of the crisis may be on the geopolitical balance between two great powers, each many thousands of kilometres away from the scorching sands of the Arabian Peninsula: China and the United States.

As the world’s largest trading nation, China has much at stake in the Red Sea. Europe is China’s top trade partner, and more than 60% of that trade by value usually flows through the Suez Canal. With that route disrupted, cargo vessels are diverting around Africa’s Cape of Good Hope, adding up to two weeks in additional travel time and vastly increasing shipping costs. By 25 January, the average cost of shipping a 40-foot container from Shanghai to Genoa spiked to $6,365, an increase of 464% from two months earlier. Insurance rates have also skyrocketed. What’s more, Chinese companies have in recent years poured billions of dollars’ worth of investment into assets in the region, such as the 20% stake in the East Port Said container terminal of the Suez Canal that is now owned by Chinese state shipping giant COSCO. At a time when China’s growth rate is already struggling, the crisis risks imposing a serious further drag on its economy.

Apparently perceiving this vulnerability, Washington has tried to use it as leverage to convince Beijing to help end the crisis. China is the top economic and geopolitical backer of Iran, which in turn backs the Houthis, using them as a proxy to needle Israel, the United States and its allies. Some officials in Washington are convinced that, if it really wanted to, Beijing could quickly pressure Tehran into ending the Houthi attacks. Biden administration officials have “repeatedly raised the matter with top Chinese officials in the past three months”, according to the Financial Times, and US National Security Advisor Jake Sullivan recently flew to Thailand to directly plead the administration’s case in a meeting with Chinese Foreign Minister Wang Yi.

This diplomatic effort seems to have failed. Aside from a tepid public statement calling on “all relevant parties” to “ensure the safety of navigation in the Red Sea”, Beijing appears to have made no move whatsoever to remedy the situation. Instead, it called on Washington to “avoid adding fuel to the fire” in the Middle East. The attacks continue.

Some in Washington are pouting. Rep. Jake Auchincloss (D-Massachusetts), for instance, slammed China in a Congressional hearing in late January for being “not only missing in action as a purported upholder of international commerce and rules, but… in fact actively undermining the potential for a peaceful resolution to this issue”. This failure to intervene was just “another example of the malign and malicious attempts at global leadership from the Chinese Communist Party”.

But Auchincloss and others of like mind in Washington should perhaps be careful what they wish for. For decades — indeed, arguably for the better part of two centuries — it has been the United States that has served as the world’s “upholder of international commerce and rules”. In fact, it was a determination to protect the flow of maritime commerce from pirates that induced the young United States into its first foreign intervention, the Barbary Wars of 1801 and 1815, and permanently forged its identity as an international actor. If the nation were truly to become and remain a merchant republic that meant that it must, as then-President Thomas Jefferson declared, “superintend the safety of our commerce” through “the resources of our own strength and bravery in every sea”.

Two centuries later, the US Navy was still operating under the slogan of “A Global Force for Good”. Which is to say that the whole image — and reality — of America as a superpower largely rests, like the British Empire before it, on its ability to secure global trade. If there is any remaining shred of the “Pax Americana” on which the whole recent era of globalisation was built, this is it.

It is in this context that Washington officials ought to consider what it would mean if Beijing were to listen to their pleas and actually take over America’s role as a security provider. If the nations of the world were to begin turning to China for “global leadership” rather than the United States whenever their merchant ships were in need of protection, it would decisively mark the transition from an American century to a Chinese one, much as Britain once yielded the seas to its former colony. Washington should count itself lucky that Beijing has so far declined to try out for the role.

Meanwhile, America’s own effort to perform its old job of securing the sea lanes has proved little more than a fiasco. With the US Navy severely undermanned and overstretched around the globe, it attempted to assemble “Operation Prosperity Guardian”, a multinational coalition of forces under its command meant to patrol the Rea Sea. But this effort functionally collapsed almost immediately when France, Italy and Spain — all of whom Washington prematurely announced would be members — declined to participate, saying they wouldn’t accept US command. No Middle Eastern countries other than Bahrain signed up either. In a throwback to yesteryear, navies are instead each going solo and escorting the vessels sailing under their own flags and titles. What we are seeing, then, is a true breakdown in the “international order” — in the sense of there being any order — that was once imposed by American power. We are returning to an older, more typical world in which there is no world policeman, and everyone is obliged to protect their own national interests.

The Chinese are well prepared to capitalise on this situation. Although COSCO has for now also abandoned the Red Sea route, other smaller Chinese shippers have spotted commercial opportunity and leapt to fill the gap. China United Lines (CULines), for example, has rushed to start up a “Red Sea Express” service linking Saudi Arabia’s Jeddah to Chinese ports. They are able to do so because the Houthis seem to be under strict orders to try to avoid attacking China-linked vessels. Ships still running the straits into the Red Sea now regularly make sure to prominently display Chinese flags and use their satellite identification data to announce that they have Chinese owners, or even just Chinese crew members. The number of vessels transiting the area while preemptively broadcasting that they carry Chinese crew has surged from less than two per day to more than 30 in late January. Apparently this is the magic talisman to keep pirates at bay — though China’s navy has at least three warships in the area to escort its vessels, should it prove insufficient.

The reason Beijing seems so relaxed about the crisis is obvious: this is a situation in which China wins either way. Either the threat continues but shipping is safer for Chinese vessels than for others, in which case sailing under the protection of the red and gold flag may become a coveted competitive advantage, or Beijing finally tells Iran to knock it off, in which case China becomes the principal beneficiary of the security vacuum left by the United States. Both outcomes would be geopolitical coups. No wonder China is willing to accept a little short-term economic pain as the situation plays out.

Meanwhile, the crisis also provides China with a real justification for continuing to rapidly build out a “blue water” navy able to project power far from its own shores. As it happens, this is the same justification traditionally been offered by the United States: that, in the absence of security and stability, it needs the ability to protect global sea lanes and the lives of its citizens abroad. The military base China built in Djibouti in 2016 to enable the deployment of its warships across the Indian Ocean and around the Horn of Africa now looks prudent.

This is how the “world order” has always been shaped and reshaped: by nations and empires acting abroad to protect their own interests — or progressively failing to do so while others move to fill the void. The crisis in the Red Sea is therefore both symbolically and practically meaningful. Unless the United States and its allies can get their act together, we may look back on this as a moment when a vast geopolitical shift was revealed for all to see. As for everyone else, it’s likely that the crisis will serve as a sign that the time to prepare for the harsh realities of a far more “multipolar”, less globalised world has by now well and truly arrived.