History is really about Geography.

A giant container ship gets stuck in the Suez Canal for a week and suddenly the whole world gets very panicky about international trade having a metaphorical heart attack – a vital trade artery gets clogged and people start to get nervous. Actually I think the significance is less about the mechanics of international trade, rather that throughout history, if you can control international sea straights you can control the world. If you look closely enough, these realities are playing out now with one country in the world very interested in controlling international trade and its routes, very much for it’s own selfish interest, or from its perspective, self-preservation too. That country is China.

The size of the container ship that got stuck in the Suez Canal points to another reality too: the inevitable march of human progress. However, if you are sitting in the US Rust Belt, or the former industrial heartlands of Northern Britain, hoping your luck is going to change for the better, the size of EverGreen and ships like it aren’t coming to your economic rescue; they are just another sign of Asia’s economic dominance that sends more and more cheaply produced goods, produced by very cheap comparative labour to Europe and North America. Maybe this will change in the future as Europe’s industrial revolutions of the 19th century led to more democracy and workers’ rights, but at the moment, the likes of China do not have to pay comparable Western-style benefits, perks and welfare to their employees because labour is so bountiful. Voters and Western politicians want so-called ‘good jobs’ but can they come with our associated desire for salaries, healthcare, welfare and pensions – to which Western voters have become very accustomed – when the Asian competition can undercut those employee costs? Donald Trump got this point and exploited it, xenophobically, in his campaign for US President. It doesn’t seem that way without massive barriers to trade, and with the size of ships currently navigating the Suez Canal it doesn’t seem like that possibility is remotely close.

And China is keen on making sure things stay that way – it fears encirclement and being cut off from the world economically, so if you can control the trade routes and access to the resources that you need, this becomes diplomatically, economically, and militarily essential. Especially when you have two billion people that you need to control through an authoritarian state, but to whom you also need to grant economic progress to keep your people happy through capitalist consumerism for fear of being overthrown. These trade fears have caused wars in the past between states as well as internal revolutions.

So if you can control ocean straits, you can control the world. That has been the case since ancient times. We don’t know that much about what caused the Trojan War or whether it even happened, but there’s lots of evidence that historical Troy was a trading centre of huge importance to the ancient Greek states: that’s because it could control a crucial ocean strait, the Dardanelles, only 1.5km wide at its narrowest point at Canakkale. (The Bosphorus in Istanbul is even narrower and has been a major cause of Russian concern over the centuries). Greece’s denuded soils left it dependent on grain imports from the Black Sea from quite early times, so control of these straits was an existential issue. The origins of the (real and historical) Greco-Persian wars came about with a tussle over control of the culturally Greek Ionian city-states along the (now Turkish) coast and up to the Dardanelles. The Ionian Greeks were vital cogs in the Aegean / Mediterranean trading network. This pattern repeats through history. India’s Kerala and Tamil Nadu coasts dominated east-west trade from antiquity because they dominated another sort of strait — the monsoon trade winds that could get sailing ships from the Red Sea to Southeast Asia.

However, the British were the real experts in this business. Look at a map of the world’s crucial ocean straits and it’s truly astonishing how much of it was controlled by the British, from Gibraltar to the Gulf of St Lawrence, giving access to the Great Lakes and the interior of North America (note the French nipping at Britain’s heels with St Pierre & Miquelon) to Central America, where despite only getting control of one big island (Jamaica) the British controlled all but a handful of the small islands from the Bahamas to Trinidad that controlled access to the Caribbean and Gulf of Mexico. Why was this geography important? The direct route on the trade winds from Africa takes you right between the British colonies of Montserrat and Dominica, where right in the middle you find Guadeloupe, controlled by that other great European empire builder — surprise, surprise — France. From these islands you could also harass Spanish trade from the Americas.

The Straits of Hormuz, through which a third of the world’s seaborne oil now passes, was dominated by British-aligned Gulf emirates and the Omani sultanate. Oman is a country where Britain continues to maintain close links and invest significant soft diplomatic power. And then you have the Red Sea, where the British and French contested control of Egypt for decades and had colonies at Aden and Djibouti on either side of the Bab el-Mandeb. (Israel is viewed as a friend of the West, I think, less because it is a democracy in the Middle East, but a military power with both a Mediterranean coastline and a port on the Red Sea). In the 19th century Britain and France had a problem in Southeast Asia, where the Dutch in Batavia (modern-day Jakarta) controlled the straits between the islands of Indonesia and charged hefty taxes on British shipping travelling between China and India. So Stamford Raffles started scouting out locations for a trading post and hit on an island with about 150 inhabitants at the end of the Malaysian peninsula that the Dutch and the Sultan of Johor were not really interested in: Singapore.

It’s tempting to think that in the modern world, with the rise of aviation, telecommunications, and global finance, that maritime straits don’t matter all that much but that would be an error. They matter now more than they ever did in the past. For one thing, we’re much more dependent on the constant and uninterrupted flow of goods round the world (here the recent Suez Canal panic becomes relevant). Two-thirds of the world’s crude oil moves by sea. Oil demand may have peaked but right now, if you stopped that flow, economies would grind to a halt quite quickly. The same goes for food. Only about 30 to 40 countries out of 195 in the world are self-sufficient in terms of calories. Cut off the supply of grain to the other nations and you can bring them to their knees rather quickly. The same rule applies for other commodities, too, as well as for exports — which most countries are going to need if they want to pay for those imported goods.

The other thing that has changed is the growth of aircraft carriers and long-range artillery. In the Age of Sail it was quite difficult to threaten an enemy ship in the ocean because it was hard to catch up with it. The age of Gunboat Diplomacy and really being able to using warships as a maritime threat begins in the era of steamships, and accelerates with the invention of aircraft carriers that can interdict shipping within a several hundred-nautical mile radius. A single aircraft carrier is quite sufficient to block any one of the world’s major ocean straits, the widest of which are less than 100 nautical miles across. That’s where Chinese foreign policy comes in. Because of the way the Pacific and Asian tectonic plates crash into each other, there is a fence-like string of volcanic islands along the edge of east Asia. Without touching the Asian mainland, you can make it all the way from Alaska down to Australia without crossing more than 100 nautical miles of open ocean. It’s not hard to see why China — which depends on seaborne imports for about three-quarters of its oil and iron ore, not to mention animal feed and foreign exchange from its export trade — is worried about that. It is why is does deals with Australia and New Zealand for resources and food stuffs respectively.

However, an alliance of other countries in the Pacific regions lined up against China, could completely cut off China from the world’s oceans. This is one of the best ways of understanding what’s happening with Xi Jinping’s foreign policy. A lot of the biggest infrastructure projects China is known to be involved in look like an attempt to bypass the Straits of Malacca and Singapore, from an oil pipeline through Myanmar and a railway across Malaysia to the China-Pakistan economic corridor and subsidies for trans-Asian rail. Similarly, the tensions over the South China Sea make most sense when you consider that the disputed islands and unnavigable shoals like the Spratly and Paracel Islands in effect split the sea into a series of ocean straits.

And, finally, it’s worth thinking about Taiwan and Hong Kong. With Taiwan, China’s motivation for making threatening noises about invasion is clearly nationalistic, but it’s worth reflecting how much Taiwan controls China’s gateways to the world, and even to parts of its own territory. Taiwan has territory on both sides of the Taiwan Strait, including heavily-fortified islands just a stone’s throw from the Chinese port of Xiamen. South-eastern China is difficult, hilly country and to this day a huge amount of cargo between Shanghai and Guangdong goes by sea. Similarly, the straits linking the Taiwanese mainland with outlying islands of Japan and the Philippines are only about 50 nautical miles wide. China is also one of the key backers of proposed new ocean canals across Thailand’s Isthmus of Kra and Nicaragua, which could help bypass Singapore and U.S.-dominated Panama. It is also why China wanted Hong Kong back from Britain, and is worried about a pro-democratic former British colony going rogue. Hong Kong was always a strategic trading post, now more for global finance that its 19th century origins in the Opium trade.

So if you are sat in Beijing, making money out of selling ‘stuff’ to the West and under-cutting the domestic jobs market of the US and Europe, but also looking over your shoulder at how your own people might react to any semblance of economic decline, then it’s important to recognize how threatening the configuration of these ocean straights appears if you are China. Its moves around the South China Sea and Taiwan come across as militarily offensive, but there’s a very fundamental defensive aspect to them too. Russia is thinking the same as China – and this why a melting Artic Ocean region opens up the potential of new trade routes through the North West passage or across the top of Russia avoiding these historical choke points of trade elsewhere in the world.

The freedom of the open oceans has been guaranteed for centuries by the Pax Anglica and Pax Americana, which has worked very well if you’re Britain or America or one of their allies. That freedom has been hugely beneficial to the world, but it’s rarely had to cope with a world where a rising power with the capability to project naval power is not exactly an ally of either Britain or America. When Japan started doing that in the early 20th century, devastating war followed quite quickly (there was a reason why the US had aircraft carriers stationed at Pearl Habor, Hawaii and why the Japanese tried to sink them!) and the Suez mishap is a reminder of how fragile these trade networks are. If one is threatened by one state, or by an accident, consequences are real and the world, its trade, and many domestic and diplomatic problems are very much interconnected by this geography.

There is of course more to trade than shipping, and one other type of global commerce that really is independent of ocean straits is the international flow of money — but here U.S. hegemony is even greater than it is on the seas. If you or any of your trading partners want to do any business with anyone who uses dollars, your money must (metaphorically) sail through a narrow, easily-controlled strait called the U.S. District Court for the Southern District of New York. If you violate U.S. sanctions anywhere in the world, regardless of laws in your own country, you may find yourself with a large fine. Foreign owned banks, with US operations themselves, operating in Hong Kong or elsewhere will not violate US sanctions. So as long as the US dollar remains the world’s primary reserve currency the West retains the advantage. However China is a player in the world’s financial markets and buys up sovereign debt from Western countries; its activities affect the price of global commodities and farm stuffs – which plays out as a real issue in US domestic politics for example. It wants to threaten the dollar’s hegemony. So how international financial systems are used (and abused) has real world impacts too and no doubt the subject of a future post as to how it affects sentiment of people in Western democracies who are angry with their lot in life.


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