W. G A Wolf in Sheep’s Clothing? - Wilson Center · independent Pakistan. Garver predicts that China would almost certainly stand by Pakistan in the event of an India-Pakistan war,

China’s “Good Neighbor” Diplomacy:A Wolf in Sheep’s Clothing?

NO. 126 JANUARY 2005

A S I A P R O G R A M S P E C I A L R E P O R T

C hina’s new leaders emphasize theneed to “oppose hegemony” in theirforeign policy speeches less fre-

quently than did their predecessors, whilehighlighting peaceful coexistence in a multi-polar world. This change, stimulated byChina’s economic growth and military mod-ernization, reveals Beijing’s growing con-sciousness of itself as a regional power. Toensure a peaceful environment, Beijing regardsrelations with neighboring countries as thetop priority in foreign affairs and continues topursue a “good neighbor” diplomacy.

Will China become a more responsibleregional power, as its recent cooperation withthe United States on the North Korean nuclearissue suggests? To what degree will China, as arising power, challenge the existing regionalpolitical and economic order? What will be theprobable impact of China’s growing power on

regional security and stability? To what extenthas Beijing’s good neighbor diplomacychanged China’s image in the Asia-Pacificregion? How can the United States bettershape Beijing’s foreign behavior in accordancewith international norms? The following threeessays discuss these and related issues.

In the first essay, John W. Garver of theGeorgia Institute of Technology argues thatChina’s core interest in post-Soviet CentralAsia is to maintain the status quo of non-Islamist and non-democratic states. Beijing isgreatly concerned with the explosive growthof U.S. military presence in Central Asia after9/11. From the perspective of Chinese ana-lysts who are concerned about U.S. efforts to“contain” China, the increasing U.S. presencein that region has represented a further tight-ening of the noose around China. Beijing’sresponse is to seek assurances that Washing-ton’s presence is only temporary. Garver notesthat China’s large investment in new railways,highways, oil fields and pipelines in post-

INSIDE

JOHN W. GARVER

China’s Probable Role inCentral and South Asia(page 4 )

DENNIS V. HICKEY

China’s Relations withJapan, the Koreas, andTaiwan: Progress withProblems(page 9)

MICHAEL R. CHAMBERS

China and Southeast Asia:Creating a “Win-Win”Neighborhood(page 16 )

ABSTRACT: This Special Report examines both improvements and problems in China’srelations with neighboring countries in different parts of Asia. John W. Garver of the GeorgiaInstitute of Technology argues that China’s core interest is to maintain the status quo of non-Islamist and non-democratic states in post-Soviet Central Asia, and to uphold the existingbalance of power between India and Pakistan in South Asia. Dennis V. Hickey of SouthwestMissouri State University also describes China as a “status-quo power” in East Asia—itopposes a militarized and rearmed Japan, supports the idea of a nuclear-free Korean penin-sula, and seeks to avoid disruptive change in the Taiwan Strait. Michael R. Chambers ofIndiana State University observes that Beijing’s growing influence in Southeast Asia mightpresent challenges, albeit not a serious threat, to the United States over the near and medi-um terms.While the three essayists agree that China is reluctant to rock boats in Asia, theycannot predict how long China will maintain its current “good neighbor” diplomacy, partic-ularly in light of China’s uneasy relations with Japan, India, and Taiwan.

IntroductionGang Lin

ASIA PROGRAM

Gang Lin is program associate at the Woodrow Wilson Center’s Asia Program.

Soviet Central Asia have created Chinese interestsin that region, which might conceivably requiremilitary protection. However, China’s interestswould be better served by reassuring the CentralAsian states of its benign nature.

Likewise, China seeks to uphold the existing bal-ance of power in South Asia by ensuring that Indiaremains preoccupied with handling a strong andindependent Pakistan. Garver predicts that Chinawould almost certainly stand by Pakistan in theevent of an India-Pakistan war, though Beijing’spreference is to prevent military conflict betweenthese two South Asian countries. However, Chinawould probably enter a war only if a decisive Indianvictory seemed inevitable. In addition, China couldquite conceivably employ military force to protectits relations with Nepal and Myanmar againstIndian dictation, Garver maintains.

The second essay by Dennis V. Hickey ofSouthwest Missouri State University examinesChina’s relations with Japan, the two Koreas, andTaiwan. According to Hickey, Beijing has played anincreasingly constructive role in East Asia over thepast several years, and closer ties between China andits neighbors serve American interests in the region.In many respects, China might best be described as a“status-quo power” in that region—improving itsrelations with Japan and South Korea, opposing amilitarized and rearmed Japan, supporting the ideaof a nuclear-free Korean peninsula, and seeking tomaintain the status quo in the Taiwan Strait.

However, China’s improving ties with Japan andSouth Korea could be reversed due to territorialdisputes and other sensitive issues. Despite a sharpescalation in China’s commercial ties with Japan inrecent years, Beijing fears a possible resurgence ofJapanese militarism and deeply resents any Japanesebehavior that appears to excuse Japan’s aggressionin World War II. On the other hand, many Japaneseare annoyed by China’s continual references to thepast, and concerned about Chinese naval incur-sions into Japan’s Exclusive Economic Zone(EEZ). Likewise, various problems—including thequarrel over the boundaries of an ancient Koreankingdom—could swiftly deteriorate China’s rela-tionship with South Korea. While Beijing hasshown great diplomatic skill in handing the NorthKorean nuclear crisis, its hostile approach towardTaipei has resulted in a worsening relationshipacross the Taiwan Strait. Hickey cautions thatBeijing’s unrealistic Taiwan policies, plus provoca-tive behavior of some Taiwanese politicians, havebrought the two rivals on a collision course.

In the third essay, Michael R. Chambers ofIndiana State University observes that China hasmade great efforts to demonstrate its good neigh-borliness to the countries of Southeast Asia.According to Chambers, Beijing’s purposes arethree-fold: 1) to dispel any concerns amongASEAN of a “China threat,” 2) to maintain apeaceful and stable regional environment in whichChina can pursue its goal of economic develop-ment, and 3) to promote Chinese leadership andinfluence within the context of an East Asian com-munity. Anxious that the United States might seekto constrain China’s rise, Beijing regards the cre-ation of an integrated East Asian community as atype of strategic buffer against possible pressuresfrom the United States in the future.

Chambers recognizes that the growing Chineseinfluence in Southeast Asia has negative conse-quences for the United States, given the emergingsentiment in the region to avoid choosing sides in apotential U.S.–China military clash over Taiwan.Beyond this, China’s influence in this region mightpresent challenges, but not a serious threat, to theUnited States, Chambers argues. Over the near andmedium terms, China will not develop into a globalpower to rival the United States, and it will dependon the United States to accommodate its rise.

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ASIA PROGRAM SPECIAL REPORT

THE ASIA PROGRAM

The Wilson Center’s Asia Program is dedicated to the propositionthat only those with a sound scholarly grounding can begin tounderstand contemporary events. One of the Center’s oldestregional programs, the Asia Program seeks to bring historical andcultural sensitivity to the discussion of Asia in the nation’s capital.In seminars, workshops, briefings, and conferences, prominentscholars of Asia interact with one another and with policy practi-tioners to further understanding of the peoples, traditions, andbehaviors of the world’s most populous continent.

Asia Program Staff:Robert M. Hathaway, DirectorGang Lin, Program AssociateAmy McCreedy Thernstrom, Program AssociateWilson Lee, Program Assistant

Moreover, while the ASEAN countries welcomeChina’s good neighbor diplomacy, they are notappeasing this emerging dragon and are strengthen-ing their relations with other major external pow-ers, including the United States.Therefore, Chinesegood neighbor diplomacy toward Southeast Asiadoes not require an immediate or a drastic reactionfrom the United States, Chambers concludes.

Bill Gertz of the Washington Times offered com-mentary on these three essays when they were firstpresented at a September 22, 2004, seminar hostedby the Woodrow Wilson Center’s Asia Program.Gertz highlighted China’s potential threat to theUnited States and Japan, which defense officials ofboth these countries tend to worry about.As a resultof China’s economic and military modernization,South Korea may be under more influence fromChina than from the United States, and Beijing’saggressive policies in the South China Sea willinevitably conflict with Japanese interests in that

region. Moreover, future energy shortages are likelyto drive China to expand southward and/or north-ward. Gertz argued that whether Beijing will useforce against Taiwan will serve as a test point for thereliability of China’s good neighbor diplomacy.

This Special Report examines both improve-ments and problems in China’s relations with neigh-boring countries in Central Asia, South Asia,Northeast Asia, and Southeast Asia.While the threeessayists agree that China seeks to maintain the sta-tus quo in Asia, they cannot predict how long Chinawill maintain its current good neighbor diplomacy,particularly in light of uneasy relations with Japan,India, and Taiwan. In addition, a serious political,economic, or social crisis in China could also alterBeijing’s approach to the region, as Chambers cau-tions in his essay. In other words, the sustainability ofChina’s good neighbor diplomacy is subject to con-tingencies, both domestic and international.

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CHINA’S “GOOD NEIGHBOR” DIPLOMACY: A WOLF IN SHEEP’S CLOTHING?

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W ill China use its growing power tochallenge the existing political andeconomic order in Central and South

Asia? Is Beijing likely to use its burgeoning militarypower to direct development of these regions alonglines favorable to China? If so, how? What will bethe probable impact of China’s rapidly growingnational power and influence on the internationalorder in Central and South Asia? Might China usethat power in an attempt to establish a sphere ofinfluence in these regions? Several caveats are nec-essary before answering these questions. First, thefuture is notoriously hard to predict.We can at bestspeak of probabilities, while recognizing the verylarge role that will be played by contingency.Second, China’s future roles in Central and SouthAsia will be greatly influenced by scores of unfore-seeable factors: social breakdown or war in theseregions, the policy choices of Moscow,Washington,and Brussels in coming decades, and the relativesuccesses and failures of various states. At best wecan speak of informed guesses.

CHINA’S PROBABLE ROLE IN CENTRAL ASIA

China’s interests suggest that it will use its growingpower to uphold the existing order in Central Asia.The collapse of Soviet rule over Central Asia and thereplacement of that imperium by five sovereign,independent states were profoundly beneficial toChina’s national interests. The powerful militaryforces that had previously stared at China from thisregion were withdrawn, to be replaced by the farweaker military forces of far less powerful states.Theimpenetrable Soviet-era boundaries that had previ-ously severely limited Chinese influence in CentralAsia suddenly became permeable, and Chinesegoods, investment, people, ideas and argumentsbegan flowing across those borders. Instead of onepowerful and xenophobic state (the USSR), Beijingnow found in post-Soviet Central Asia five weakstates eager to expand ties with China for the sake

of economic development and to escape from a longperiod of Russian/Soviet domination.

China’s core national interests also comport withthe existing secular (i.e., non-Islamist) nature of thefive Central Asian states.The post-Soviet period hasseen an explosive renaissance of Islam across CentralAsia, and some of the political movements emergingfrom this renaissance have favored Taliban and/orIran-style Islamic states. China fears that the estab-lishment of Islamic states in Central Asia wouldexacerbate its own problems of internal security inXinjiang, and has therefore supported the existingsecular Central Asian governments against the forcesof Islamicization.This was one of the core, if unspo-ken, purposes behind the Shanghai Five/ShanghaiCooperation Organization supported by China inthe 1990s. Secular, non-Islamicist governments con-stitute the status quo in Central Asia, and China islikely to continue supporting that status quo.

Democratization of governmental systems inCentral Asia would constitute a change from the sta-tus quo. Would Beijing oppose movement towarddemocratization of Central Asian governments?Beijing probably would fear that democratizationwould draw the Central Asian states further into theWestern orbit, thereby further tightening the circle of

China’s Probable Role in Central and South Asia

JOHN W. GARVER

John W. Garver is professor of international affairs at the Georgia Institute of Technology.

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“U.S. containment”around China perceived by manyChinese analysts. It would probably make a major dif-ference to Beijing, too, whether or not those increas-ingly democratic Central Asian states have militaryand/or strategic links with the United States, theEuropean Union, India, or other democratic statesnot allied with the United States. European states(especially Germany) are already economically dom-inant in several of the Central Asian states. If thetrans-Atlantic relation deteriorates, Beijing might notbe particularly concerned by a growing association ofEurope and the Central Asian states, especially ifEurope and America continue to drift apart.

Beijing, or at least some circles in China, aregreatly concerned with the explosive growth ofU.S. military presence in Central Asia after 9/11.From the perspective of Chinese analysts who areconcerned about U.S. efforts to “contain” China,the establishment of a U.S. military presence in,and links with, Central Asian countries has repre-sented a further tightening of the noose aroundChina; U.S. forces are situated uncomfortably closeto ethnically sensitive Xinjiang and Tibet. SomeChinese analysts also believe that the U.S. militarypresence will stimulate, rather than help staunch,Islamic fundamentalism in these regions.Anti-sub-versive activities are best preformed, in the view ofsome Chinese analysts, by the Central Asian coun-tries themselves, perhaps in cooperation with theirChinese and Russian neighbors.

Beijing responded to the post–9/11 growth ofU.S. military presence in Central Asia by seekingand securing assurances from Washington that itspresence was temporary and associated with on-going operations in Afghanistan—operations withwhich China cooperates. Once Afghanistan is sta-

bilized, Beijing would certainly like for U.S. forcesto leave Central Asia.

But it is difficult to imagine how China might beable to use military forces to thwart a drift of theCentral Asia states toward military association withthe West, either Europe or the United States.Intimidation by military threat would be counter-productive and push the Central Asian states intodeeper alignment against China. Of greater utility toChina’s interests would be attempts to reassure theCentral Asian states of China’s benign and non-threatening nature.A strong “good neighbor” policywould be more effective than military threat in dis-suading Central Asian states from associating tooclosely or permanently with the United States.

China’s large investment in new railways, high-ways, and pipelines in post-Soviet Central Asia, alongwith the acquisition of several oil fields on the eastshore of the Caspian Sea and in Azerbaijan, have cre-ated Chinese interests in Central Asia that mightconceivably require military protection. Were thenew and important rail lines linking Xinjiang toEurope and ocean ports, or the Kazakh-Xinjiangpipeline being built to carry Caspian crude toXinjiang to become a target of Islamic terroristattacks, China could well offer military cooperationto Central Asian governments in response. This isperhaps not too far-fetched. In this event, however,China’s strategists would probably be well aware thatthe presence of Chinese military forces in CentralAsia could easily cause a negative local backlash.More likely, perhaps, the People’s Liberation Army(PLA) would provide training, intelligence, andlogistic assistance to Central Asian military forces.Without too much difficulty one can imagine arivalry between China and the United States for mil-itary cooperation with Central Asian states. It is dif-ficult to imagine this going very far, however, unlessone envisions a Central Asian theater evolving out ofescalation of a U.S.–PRC war over Taiwan.

CHINA’S GROWING POWER AND SOUTH ASIA

In South Asia, too, China is a status-quo power, atleast in one fundamental sense—China benefitsfrom, and therefore seeks to uphold, the existingfractured structure of power between India andPakistan.By ensuring that India remains preoccupiedwith political conflict with a strong, in-dependent-

From the perspective of Chineseanalysts who are concerned aboutU.S. efforts to “contain” China,the establishment of a U.S. militarypresence in Central Asian countrieshas represented a further tighteningof the noose around China.

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minded Pakistan over Kashmir, China gains a num-ber of regional and even global advantages. It is thisgeopolitical fact that underlies China’s unprecedent-ly long, stable, “multifaceted,” “all- weather,” and“tested-by-adversity” relations with Pakistan. It is thisprimal geopolitical fact that underlies China’s assis-tance to Pakistan’s nuclear weapons programs in the1970s and 1980s, Beijing’s 1997 refusal to accede toU.S. pressure to cease nuclear cooperation withPakistan, and China’s large and ongoing aid toPakistan’s national development efforts.

In the event of an India-Pakistan war, Chinawould almost certainly stand by Pakistan.There are30 or so levels of Chinese support for Pakistan shortof belligerency—levels ranging from biased mediacoverage, governmental statements, U.N. diplomacy,to concentration of Chinese forces on India’s north-ern borders. A Chinese decision regarding bel-ligerency in an India-Pakistan war would be influ-enced by a series of contingent factors, probablystarting with the positions of the United States,Russia, and Europe on the conflict. Actual Chineseentry into the war would be likely only in the eventthat a decisive Indian victory, and therefore subordi-nation of Pakistan, seemed likely.

A Chinese decision to enter an India-Pakistan warwould be predicated on preventing the overturningof the structure of power that has existed in SouthAsia since 1947. Beijing’s objective would not be tooverturn the South Asian balance, but to maintain it.Overturning the long-existing balance could,nonetheless, result from an India-Pakistan-Chinawar. History is replete with examples of warslaunched for essentially defensive purposes thatnonetheless resulted in revolutionary transformationsof international systems (e.g., the U.S. 1940–41 deci-sion to intervene in Europe and Asia, and China’s1962 decision for war with India). If, as a result ofsuch a war, India were gravely weakened by a nuclearexchange with Pakistan, China’s relative power posi-tion in South Asia could be greatly strengthened.

I am not suggesting that China believes it wouldbenefit from a war between India and Pakistan.Thisis not the case. Such a war would confront Chinawith a Hobson’s choice between alienating Indiaand abandoning Pakistan. Beijing would be certainto seek to avert such a war and would work in tan-dem with the peace diplomacy of other powers inthis regard. But if such efforts failed and Beijingwere forced to choose between Pakistan and India,China would come down on Pakistan’s side. Theonly question would be how far China would go insupporting Pakistan.

There could be two types of revolutionary out-comes of a China-supported Pakistan-India war.One would be a decisive Indian victory overPakistan, resulting in the denuclearization, partialdemilitarization, and perhaps even partition ofdefeated Pakistan. This would represent the end ofthe balance of power that was established with the1947 Partition.This outcome would be profoundlyadverse to China’s geopolitical interests and Chinawould seek to prevent it.

The second type of revolutionary outcome wouldbe a substantial reduction in India’s national power.The most probable path leading to such an outcomewould be a general nuclear exchange between Indiaand Pakistan. Nuclear obliteration of a number ofIndian population and economic centers wouldimpose astronomical costs of relief and rehabilitation.This would be a devastating blow to the developmentof India’s national capabilities. Since 1978 China hasgained a very large lead over India in terms of theWorld Development Indicators calculated by theWorld Bank. In terms of a whole series of standarddevelopment indicators such as rates of GrossDomestic Product (GDP) growth, domestic and for-eign investment, expansion of foreign trade, adult lit-eracy and infant mortality, China has pulled far aheadof India since 1978. An India devastated by nuclearexchange with Pakistan would fall further behindChina. Were China’s explosive growth to continuewhile India struggled to recuperate from nuclear dev-astation, the overall balance of power between thetwo countries could fundamentally shift. The pro-tracted struggle India has waged since 1949 to limitChina’s advances in South Asia could thus come to anend,with all countries of the South Asian region,per-haps including devastated India itself, coming toterms with Asia’s new preeminent power, China.

History is replete with examples of warslaunched for essentially defensive purpos-es that resulted in revolutionary transfor-mations of international systems.

Are there other interests the pursuit of whichmight cause China to decide to resort to militaryforce in South Asia? Tibet remains extremely sen-sitive for Beijing, and any attempt to undermineChinese rule there by actions arising from SouthAsia (i.e., India) would certainly invite punish-ment. Beyond that, might China use military forcesto “recover” “lost territory” corresponding to theIndian state of Arunchal Pradesh? This seems high-ly unlikely, except perhaps in association with adecisive Indian-Pakistan war in which Beijingdecided to support Pakistan. If this was the case,“recovering” Arunchal Pradesh would be a con-venient target and pretext. In the event of ultra-nationalist and militarist forces gaining decisiveinfluence in Beijing and launching China on anexpansionist course, a number of other “lost terri-tories” would offer more probable targets:Taiwan,the South China Sea islands, the Sengakus, or eventhe Russian Far East and Mongolia.

China could quite conceivably employ militaryforces (either actively or passively) to protect its rela-tions with South Asian countries—especially Nepaland Myanmar—against disruption by India. By“passively,” I mean the merely threatened use of mil-itary forces (as opposed to actual use) to influencethe behavior of another state actor. Chinese analyststend to believe that the development of cooperativerelations between China and countries such asNepal and Myanmar are normal and non-objec-tionable manifestations of the sovereign independ-ence of the states entering into those relations.Theyare not directed against and do not threaten anyother power, and are thus protected by the FivePrinciples of Peaceful Coexistence. This includes afull range of possible cooperation: economicexchange, development of transport links, and polit-ical, diplomatic, military and security cooperation.Governments of the smaller South Asian countrieshave often found useful and advantageous varioussorts of cooperation with China, and China hassometimes responded positively and in a spirit offriendship to these proposals for cooperation. Indiananalysts, on the other hand, tend to view with con-cern the advance of Chinese influence along India’sflanks and within what they view as India’s naturalsecurity zone of South Asia. From Beijing’s perspec-tive this Indian attitude is a completely unacceptablemanifestation of India’s “hegemonistic” mentality.

Principle aside, Beijing has been extremely prag-matic and realistic in challenging India’s authorityover the foreign relations of other smaller SouthAsian countries. For example, in 1989 when Nepalwent too far for India by concluding an intelligenceexchange agreement with Beijing and then purchas-ing arms from China, New Delhi responded byimposing a virtual economic blockade on Nepal.China responded with only weak support for belea-guered Nepal. Beijing’s low-key response to Indianbludgeoning of Nepal was predicated on several con-tingent but important factors. China’s relations withthe United States and other Western countries weredeteriorating rapidly in the aftermath of the Beijingmassacre of June 1989.Moreover, given the weaknessof transportation links between Nepal and China,there was simply no way China could have steppedin to meet Nepal’s pressing economic needs.

But what if those contingent factors were morefavorable to China? What if China’s relations withEurope and/or the United States were good, andwhat if a smaller South Asian country targeted byIndian policy enjoyed broad international sympathyfor its resistance to Indian “bullying” and “domina-tion”? What if the Xining-Lhasa railway (currentlyscheduled for completion in 2007) had been com-pleted, with a spur pushed further south toKathmandu? What if China’s military forces enjoyeda considerable margin of superiority over those ofIndia? What if Nepal’s government (for example)requested Chinese support in resisting Indian dom-ination? It is possible China might choose to employmilitary forces—again either passively or actively.

A Maoist victory in Nepal could well lead to adecision by the new government to uproot old pat-terns of international economic cooperation as partof an effort at revolutionary restructuring of Nepalisociety—perhaps rather like the ChineseCommunist Party’s expropriation of Western prop-erty in China after 1949, or Castro’s decision tobreak with the United States around 1960. Costs ofsuch drastic reorientations are heavy, but the logic ofrevolution has sometimes made those costs accept-able to unelected revolutionary elites.Were a Maoistrevolutionary regime in Nepal to seek greatlyexpanded cooperation with China, and wereChina’s leaders to conclude that calculations ofChina’s interests required acceptance of the oppor-tunity being presented by Nepal’s invitations, India

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might respond quite forcefully.A shift of Nepal fromIndia’s security system, where it has been since 1950,to China’s, would constitute a dramatic breaching ofIndia’s “Himalayan barrier.” India has devoted largeresources since 1950 to establishing and maintainingthis barrier; it holds a status in Indian thinkingroughly comparable to that of the Monroe Doctrinein U.S. strategic thought. India might go to somelengths to prevent Nepal from changing sides, whileChina considered such actions as hegemonist bully-ing and power politics antithetical to the FivePrinciples of Peaceful Coexistence. If events pro-ceeded along such a path, Chinese resort to militaryforce could not be excluded.

Myanmar offers a second case where Chineseties are of considerable concern to India, and whereChina could conceivably resort to military force toprotect those ties against Indian disruption.The firstobservation must be that such Indian disruptionappears highly unlikely. New Delhi did not rouseitself to counter-measures during the 15 years after1988 when the now existing Sino-Myanmarentente developed, and there is little reason forassuming that India will become more vigorous inattempting to undo that now solid relation. India

seems to have adjusted to the new fait accompli,rather like the United States adjusted to the Sovietposition in Cuba. But supposing that India didbegin adopting more vigorous counter-measures toundo the Sino-Myanmar entente, might Chinarespond with force? My hunch is that Beijing’s per-ception of the U.S. role in instigating India’s newcourse would play an important role in determin-ing China’s response. If Beijing concluded there wasan American hand in India’s anti-China policies, itwould be inclined toward more forceful measuresto “smash” the India–U.S. anti-China cabal. Again,the quality of Beijing’s, and India’s, ties with theUnited States, Europe and Russia, as well as themilitary balance between India and China at thetime Beijing had to make its decision, would beimportant to Beijing’s calculations.

Local, seemingly parochial concerns such as thestatus of Nepal or Myanmar are linked to the broad-er structure of power in South Asia. If Beijing resort-ed to force to uphold the sovereign rights of China,Nepal and Myanmar to determine relations amongthemselves against Indian dictation, it would not doso as part of an effort to overturn the existing struc-ture of power.This might, however, be the result.

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T his essay examines relations between thePeople’s Republic of China (PRC) andseveral major powers in Northeast Asia—

Japan, the Republic of Korea (ROK or SouthKorea), the Democratic People’s Republic of Korea(DPRK or North Korea), and the Republic ofChina (ROC or Taiwan). It shows how, in manyrespects, Beijing now plays a much more active, con-structive and practical role in regional affairs.However, China’s relations with its neighbors are notwithout their complexities and problems. Perhapsmost worrisome is Beijing’s deteriorating relation-ship with Taipei. As observed by Jia Qingguo, aninternational relations analyst at China’s prestigiousBeijing University, the two sides of the Taiwan Straitare moving closer and closer to war.1

CHINA’S RELATIONS WITH JAPAN

Recent years have witnessed a sharp escalation inChina’s commercial ties with Japan. Japanese exportsto China are setting new records. In 2003, Japanexported almost seven trillion yen in products to thePRC.2 China’s demand for steel is benefiting Japan’ssteel industry, and the Chinese people’s seeminglyinsatiable demand for cell phones (almost 300 mil-lion are now in use) is providing a real boost to cor-porations such as Sanyo and Matsushita. In fact,according to some studies, Japanese exports toChina are largely responsible for Japan’s economicrecovery. Japan’s imports from China are growingsteadily, too. In 2003, Chinese exports to Japanexceeded nine trillion yen, surpassing Americanexports to Japan for the second consecutive year.3

In addition to the explosion in bilateral trade, it isnoteworthy that Japanese direct investment in Chinais accelerating rapidly. Many corporations are relocat-ing production lines to China, resulting in the loss ofover two million manufacturing jobs in Japan.Although numerous Japanese companies are usingChina as an export-platform,an increasing number ofbusinesses are manufacturing products for China’s

growing middle class. In other words,China is viewedas a lucrative domestic market by some Japanesefirms.As evidence of this trend, Japanese departmentstores and convenience stores, businesses that alreadyenjoy a strong presence in Taiwan and Hong Kong,now are setting up shops in the mainland.

Despite a robust and growing economic relation-ship, China’s ties with Japan remain somewhat pre-carious. To be sure, there are some very positivetrends in political relations. For example, bothBeijing and Tokyo agree on the need for a non-nuclear Korean peninsula and a peaceful resolutionto the North Korea nuclear crisis.They have alsocooperated in regional forums such as the ASEAN+ 3 (China, Japan and South Korea) talks. Moreover,Japan provided China with significant emergencyassistance during the 2003 SARS crisis, and roughly50,000 Chinese students now study in Japan.To asignificant extent, however, there is a shadow thathangs over China-Japan relations.

China deeply resents any behavior that appearsto glorify or excuse Japan’s aggression in World WarII and is concerned about a possible resurgence ofJapanese militarism. Prime Minister KoizumiJunichiro’s repeated visits to the Yasukuni Shrine, asite where the remains of certain war criminals

Dennis V. Hickey is professor of political science at Southwest Missouri State University.

China’s Relations with Japan, the Koreas,and Taiwan: Progress with Problems

DENNIS V. HICKEY

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rest, have infuriated many Chinese. Tokyo’s enor-mous military outlays (now the fourth largest inthe world after the United States, China andFrance) and defense modernization programs arealso causes for concern. Not surprisingly, any talkof revising the country’s so-called “PeaceConstitution” and/or scrapping Article Nine ofthat document sets off alarm bells in Beijing.Moreover, the terms of the revised U.S.–JapanDefense Guidelines irritate Chinese defense-plan-ners—especially those in-volved in planning forpossible military actions against Taiwan.4

For their part, many Japanese are annoyed bywhat they consider China’s incessant whining aboutissues related to unfortunate historical events thatoccurred a long time ago. After all, most Chineseand Japanese were born after the close of World WarII, and Tokyo is taking steps to destroy dangerousmaterials abandoned by imperial troops deployed inthe mainland at the close of the conflict.5

On a more substantive level, there is increasingconcern in Tokyo about Chinese naval incursionsinto Japan’s Exclusive Economic Zone (EEZ) andBeijing’s vociferous claims to the Senkaku Islands(designated as the Diaoyu Islands). Much to Tokyo’schagrin, Beijing maintains the position that Chineseships have never violated Japan’s EEZ because juris-diction over these waters is “disputed.” Beijing alsocontends that the Senkaku Islands have belonged toChina “since ancient times.”The PRC even passed alaw reaffirming its claims in 1992.

Another territorial dispute involves China’sclaims to the entire South China Sea and Taiwan.Although Japan is not directly involved in thesequarrels, it fears that a conflict over Taiwan coulddestabilize the whole region. Furthermore, amajority of Japan’s petroleum imports pass throughwaterways located in or near the South China Seaareas, and Japanese firms have expressed an interestin joint development of any energy resources dis-covered beneath it.

The quarrels between China and Japan shouldnot be exaggerated. After all, the two Asian giantsshare many interests and most Japanese officialsemphasize that China does not represent an imme-diate threat to their country. Nevertheless, publicopinion polls reveal that many Japanese view therise of China with concern and consider the coun-try as a possible threat. Moreover, Japan’s 2004Defense White Paper describes China as a “poten-tial threat” to the country. Incidents such as thosethat occurred at the 2004 Asian Cup Soccer Finalin Beijing, a contest in which many Chinese spec-tators shouted “Kill! Kill! Kill!” at the Japaneseteam, serve to reinforce the popular view that thePRC may evolve into an ultra-nationalistic, anti-Japanese power.6

CHINA’S RELATIONS WITH SOUTH KOREA

China and South Korea, once bitter enemies, nor-malized relations in August 1992. Since that time,economic relations between the two countries havebecome highly successful and helped pave the wayfor an expansion in political and cultural ties.

Some describe the bond between Beijing andSeoul as one of East Asia’s “most friction-free relation-ships.” 7 In terms of economic ties, the relationship isespecially robust. As Andy Rothman, an analyst atCredit Lyonnais Securities Asia, observed,“the growthof South Korea’s [economic] relationship with Chinaover the past decade has been astonishing.”8

China has become South Korea’s largest tradingpartner (it surpassed the United States in 2003) and isnow the top investment destination for South Koreancorporations. ROK officials boast that the countrywill become the largest foreign investor in Chinawithin several years.9 Unlike the export-orientedinvestors from other countries, South Korean firms inthe PRC focus primarily upon China’s domesticmarket. Consequently, few South Koreans have lostjobs as a result of businesses investing in the PRC.

Like Japan, South Korea’s economic recoverymay be attributed largely to its growing economicties with China. Almost 20 percent of the ROK’stotal overseas shipments are destined for the PRC.Moreover, most of the overall trade surplus that theROK enjoys may be traced to exports to China.10

In short, the South Korean economy is increasing-ly dependent upon China.

Public opinion polls reveal that manyJapanese view the rise of China withconcern and consider the country as apossible threat.

The strengthened PRC-ROK economic rela-tionship has helped foster enhanced political andcultural ties. It is estimated that two million SouthKoreans travel to China annually and more than200,000 South Koreans now live and work in thePRC (almost 40,000 South Korean students studyin China). But far more significant, political bondsbetween the two governments (and societies) havegrown much closer as a result of Beijing’s construc-tive efforts to peacefully defuse the North Koreannuclear crisis and act as an “honest broker” betweenPyongyang and Washington. As a nuclear-armedNorth Korea, a collapsing North Korea and/oranother conflict on the Korean peninsula couldspell disaster for both the PRC and the ROK, thetwo countries have a strong shared-interest in engi-neering a “soft landing” for the DPRK.The popu-lar perception that Korea is historically and cultur-ally close to China has also helped bolster a favor-able opinion of China.

As described, PRC-ROK relations are relativelygood.Yet the relationship may be more fragile than itappears. Recent months have witnessed a steadyescalation in bilateral tensions. For example, SouthKorea has complained that most of its air pollutioncomes from China and that many imported Chinesefood products are tainted and unsafe for human con-sumption. South Korean lawmakers also chafe atrestrictions placed on their linkages with Taiwan.Beijing places stricter limits on South Korea’s tieswith Taiwan than it does on Japanese or Americanrelations with the island. Perhaps most significant,however, is the much-publicized quarrel over theboundaries of the ancient kingdom of Koguryo, astate that reportedly evolved into modern day Korea.

At first blush, the Koguryo quarrel may appearludicrous to outside observers. But its resolution holdsimportant implications for China and the Koreas.Some South Korean scholars and politicians claim thatthe kingdom extended into northeastern China, sug-gesting that a number of Chinese provinces should bereturned to Korea. As might be expected, Chinarefutes all such claims and argues that Koguryo was lit-tle more than a vassal state of imperial China—a posi-tion that infuriates Koreans.The dispute has led to asharp decline in favorable impressions of the PRC.Asthe ROK’s Foreign Minister observed,“the anti–U.S.,pro-China atmosphere has changed recently as we sawthe hegemonic side of China.”11

In sum, China and South Korea enjoy anexpanding economic, cultural and political relation-ship. Like China’s relations with Japan, however,there is a possibility that various problems, both oldand new, could lead to a rapid and sharp escalationin tensions. Despite these problems, however, therisk of a major break between Beijing and Seoulseems relatively slight.

CHINA’S RELATIONS WITH NORTH KOREA

There was a time when relations between China andNorth Korea were as close as “lips and teeth.”ThePRC even went to war with America in 1950 toensure North Korea’s continued survival. But thosedays are over.Although the PRC-DPRK security pactremains intact, the two allies have followed differenttrajectories for many years. Bilateral relations cooledperceptibly after Beijing recognized Seoul in 1992.Asone Chinese scholar explained, “they believe webetrayed them.We embraced the United States andtheir enemy in the south.”12

The DPRK and its nuclear weapons program rep-resent one of China’s most imminent and complexsecurity challenges.Today’s North Korea is a failedstate that possesses few, if any, diplomatic allies. Duringthe 1990s, a conjunction of factors—including cen-tralized planning, excessive military spending, naturaldisasters and reduced foreign aid—brought the coun-try to the brink of total starvation. Pyongyang’s stub-born resistance to Chinese-style economic reformsonly aggravated these problems.These developmentsled some analysts to speculate that a collapse of theNorth Korean regime was imminent.

As the DPRK grew weaker economically andpolitically, it grew more belligerent. In 1994, a crisisover North Korea’s nuclear program was defusedonly after a summit meeting between former U.S.President Jimmy Carter and Kim Il-sung. At thetime, China did not get directly involved in thenegotiations. It declined to participate in the AgreedFramework—an accord in which Pyongyang agreedto “freeze” its nuclear program in exchange for assis-tance—or participate as a member of the KoreanEnergy Development Organization (the organiza-tion established to channel aid to the DPRK).

China’s policy toward the DPRK and its nuclearweapons program began to change after Pyongyangannounced that it was withdrawing from the

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Nuclear Non-Proliferation Treaty (NPT). In 2003,Beijing stated publicly that it supports the idea of anuclear-free Korean peninsula and it has employedboth carrots and sticks to convince the DPRK tonegotiate an end to the crisis.

Although China’s economic relations withNorth Korea are minuscule when compared to itsmassive trade with South Korea, it provides a sub-stantial amount of energy and food assistance tothe DPRK on very favorable terms. As a conse-quence, Beijing still exercises some influence, albeitlimited, over Pyongyang’s behavior. As a reminderof the significance of this aid, China temporarilyclosed an important oil pipeline to North Koreafor “technical reasons” in 2003. Several monthslater, the PRC replaced the Public Security Policeon the PRC-DPRK border with elements of thePeople’s Liberation Army (PLA). Finally, Beijingbroke with long-standing policy and became anactive participant in the nuclear dispute by hostinga three-way meeting among itself, the UnitedStates and the DPRK in April 2003. These talksultimately led to the ongoing six-party talks thatinclude China, the DPRK, the ROK, Japan, theUnited States, and Russia.

Thus far, China has hosted three rounds of six-party talks. Some complain that the results of the dis-cussions thus far are inconclusive. However, after thethird round of negotiations concluded in 2004,WangYi, head of the Chinese delegation, declared that “thegoal of a denuclearized Korean peninsula is irre-versible, the process of the six-party talks is irre-versible, and the historic trend of maintaining peaceand stability on the peninsula is irreversible.”13 Beijingappears to believe that both Pyongyang andWashington have accepted the necessity of resolvingthe crisis peacefully.

It is likely that a variety of considerations ledChina to break with long-standing policy andbecome deeply involved in a contentious regionaldispute.These motivations include:• Preservation of peace and stability on the

Korean peninsula. Another Korean conflictcould lead to devastating consequences for theentire region.

• If the DPRK loses a conflict with the UnitedStates (and the ROK), China will lose animportant buffer state if the U.S.–ROK allianceremains intact.

• If the DPRK acquires nuclear weapons, othercountries—such as Japan—might be compelledto follow suit and “go nuclear.”

• If the DPRK does not dismantle its nuclear pro-gram, U.S. plans to deploy a theater missiledefense system in East Asia will accelerate.

• Given the nature of the DPRK regime, thereexists the possibility that Pyongyang mightexport WMD to non-state actors in the MiddleEast—perhaps including groups seeking to dis-member parts of China in order to carve anEastern Turkestan Republic out of Xinjiang.

• Opposing the DPRK’s nuclear weapons programmight help the PRC win some concessions fromthe United States on the Taiwan issue.Most observers concede that the PRC has shown

great diplomatic skill in handling the North Koreannuclear crisis. It has won the praise of the UnitedStates and all other participants in the six-party talksand enhanced its reputation as a responsible powerin the international system. Given its relatively lim-ited influence over the principal parties to the con-flict (the DPRK and the United States), however, itstill remains to be seen whether China will actuallysucceed in defusing the crisis.

CHINA’S RELATIONS WITH TAIWAN

In 1949, Generalissimo Chiang Kai-shek and thegovernment of the ROC retreated to Taiwan—aterritory that had been “stolen” by Japan in 1895and “restored” to the ROC after World War II. Fordecades, the PRC threatened to liberate the islandand from time to time even attempted to seize terri-tory (the offshore islands) under Taipei’s control. Buta lot has changed since the 1950s.

Although the PRC will not rule out the use offorce to take Taiwan, Beijing began to call for the“peaceful” unification of China under the so-called“one country, two systems” reunification formula inthe end of the 1970s. According to this arrange-ment,Taiwan would become a special administrativeregion of China, but enjoy a much greater degree ofautonomy than that granted to Hong Kong.

For its own part, things have changed in Taiwan.In 1987, the government lifted the ban on trade,travel and investment in the PRC. Not surprisingly,economic exchanges have soared. By 2003, Chinahad replaced the United States as Taiwan’s biggest

export market and Taiwanese firms had investedover U.S. $100 billion in the mainland. Moreover, itis estimated that several hundred thousandTaiwanese now reside in China. But as China andTaiwan have grown closer and closer economically,they’ve moved further and further apart politically.Indeed, Annette Lu,Taiwan’s feisty vice president,claimed in August 2004 that “cross-Strait relationshave already entered a state of quasi-war.”14

In 1987, Chiang Ching-kuo, the late president ofthe ROC, lifted martial law in Taiwan. Since thattime, numerous opposition parties have formed,restrictions on the press have been lifted, the provin-cial government has been “downsized” and thenation’s legislative bodies have been revitalized.15

Perhaps most significant, Chen Shui-bian, a memberof the Democratic Progressive Party (DPP), a partythat favors independence from China, now occupiesthe office of the presidency. In short, Taiwan hasevolved peacefully into what the U.S. Department ofState describes officially as a “multi-party democracy.”

Public opinion polls in Taiwan reveal that almostno one supports China’s “one country, two sys-tems” reunification scheme. They also reveal thatsupport for independence or unification is largelyconditional.16 In other words, public opiniontowards this thorny issue can be influenced by otheractors and events. If China undertakes political andeconomic reforms and adopts a conciliatory atti-tude toward Taiwan, support for unification willrise. But if China engages in hostile and antagonis-tic behavior, it succeeds only in provoking theTaiwanese and helps stir up passions that could leadto a potentially disastrous confrontation betweenthe two sides of the Taiwan Strait.

Unfortunately, China continues to make themistake of embracing the hostile approach. Formore than five decades, Beijing has adopted theabsurd position that the government in Taipei doesnot exist and has done everything possible to stripTaiwan of any vestiges of statehood. For example,China insists that nations cannot recognize both theBeijing and Taipei governments—they must choosebetween them. In an effort to lure Taiwan’s fewremaining diplomatic allies into its camp, Chinaengages in “dollar diplomacy.”17 In March 2004, thetiny Caribbean nation of Dominica severed rela-tions with Taiwan after reportedly accepting anoffer of U.S. $117 million in “assistance” from

Beijing. At the time, Taiwan’s foreign ministerobserved that Beijing’s actions will “only make thecross-strait relations worse, not better.”

In addition to stealing Taiwan’s allies, Beijingaggressively seeks to block the island’s participationin most international organizations.The Taiwaneserealize that only Beijing stands in the way ofTaiwan’s membership in the United Nations, theWorld Health Organization, the InternationalMonetary Fund, the World Bank, and a host ofother global institutions. They also realize that itwas China’s intransigence that prevented the islandfrom receiving much-needed international medicalassistance during the 1999 earthquake and 2003SARS crisis—conduct that contributed to thedeaths of hundreds of Taiwanese. Not surprisingly,public opinion polls show that roughly half of theisland’s population believes that China is unfriend-ly toward the Taiwanese people, while a solidmajority agree that China is unfriendly towardtheir government.

The hundreds of missiles that Beijing hasdeployed directly opposite Taiwan and its refusal torenounce the use of force to take the island rein-force the view that China is an unfriendly andthreatening power. In order to counter Beijing’smilitary buildup and its increasingly intimidatingposture,Taiwan’s taxpayers must spend billions ondefense instead of using the money to bolster educa-tion, health care or other social services.After all, noother power threatens Taiwan.

To be sure, China is responsible for many of theproblems that plague cross-strait relations. But someof the troubles must be traced to Taiwan—especiallyPresident Chen’s Shui-bian’s fiery rhetoric and sup-port for controversial initiatives. For example, dur-ing the 2004 presidential campaign, Chen declaredthat “we should be very confident in saying veryloudly to the world that Taiwan is an independent,sovereign country.There is no need to be ambigu-ous.”18 It is noteworthy that Chen also champions aplan to adopt a new constitution for Taiwan by2008. Moreover, despite the defeat of his so-called“peace referendum” in the 2004 presidential elec-tion, a scheme guaranteed to provoke Beijing, thepresident supports the idea of holding additionalreferendums as a means to settle controversial politi-cal and social questions. China views all of thesemoves—President Chen’s independence rhetoric,

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the plans to adopt a new constitution and the pro-posals for more referendums—as steps toward a for-mal declaration of independence.

When one combines China’s inflexible, unrealisticand anachronistic policies with the irresponsiblebehavior of some Taiwanese politicians, the end resultis a recipe for disaster. It should come as little surprisethat PRC threats to use force against Taiwan areaccelerating. In August 2004, Cao Gangchuan, thePRC’s defense minister, warned,“if the Taiwan-inde-pendence separatist forces obstinately persist on thiscourse, the Chinese People’s Liberation Army has thedetermination and ability to resolutely smash anyTaiwan-independence separatist plot.”19 In short,despite the explosion in cross-Strait economic, socialand cultural ties, it now appears that the two archri-vals are on a collision course.

CONCLUSION

The traditional goals of U.S. security strategy inEast Asia include political stability, access toregional markets, freedom of navigation, promo-tion of democracy, and preventing the rise of ahegemonic power. More recently, Washington hasalso sought to fight terrorism in its various forms.Despite the much-publicized discussion of a“China-threat” and pessimistic assessments point-ing to a coming U.S. conflict with the PRC,Washington and Beijing share common interestsin fighting terrorism, preserving stability, promot-ing peace, and ensuring nuclear non-proliferationin the region. Moreover, Washington needsBeijing’s cooperation to cope with a wide range ofpressing global problems, including environmentaldegradation, health issues and dwindling energysupplies, to name just a few. Finally, there is noinherent danger associated with China’s expandingrelations with its neighbors. In fact, closer PRCties with Japan, the Koreas and Taiwan serveAmerican interests in the region.

On balance, the new China is more active, flexi-ble and pragmatic in foreign affairs. It has played avery constructive role in seeking a peaceful resolu-tion of the Korean nuclear crisis and its relationswith most of the powers of East Asia appear promis-ing. Of course, China’s recent improvements in tieswith its neighbors are not irreversible.As described,difficulties certainly exist in Beijing’s relations withTokyo, Seoul, Pyongyang and, especially,Taipei.

There is no happy, speedy or easy resolution tothe Taiwan issue. In fact, it is important to remem-ber that for China, this is not a matter of foreignpolicy. Rather, it is a domestic political problem thathas been compounded by the interference of cer-tain foreign powers—particularly the United States.From the Taiwanese perspective, however, Chinatends increasingly to be considered an aggressiveand hostile foreign power. Consequently, newthinking may be required in Beijing, Taipei andWashington to prevent this quarrel from spinningout of control and ending in disaster.

ENDNOTES

1.Tyler Marshall and Ching-Ching Ni, “Chen’sPoll Victory Complicates China Ties,” China Post,March 24, 2004.

2. James J. Pryzstup, “Not Quite All AboutSovereignty—But Close,” Comparative Connections,2nd Quarter, 2004, http://www.csis/org.

3. Ibid.4. Perhaps the most significant—and controver-

sial—segment in the 1997 document is its provisionsfor joint U.S.–Japan military cooperation in “areassurrounding Japan,” which might include Taiwan.See Dennis V. Hickey, The Armies of East Asia(Denver, Colorado: Lynne Rienner Publishers,2001), 44–46.

5. From time to time, weapons abandoned inChina—including chemical weapons—have killedChinese. For example, in 2003 one Chinese con-struction worker was killed and eight hospitalizedby toxic gas leaks from abandoned Japanese chemi-cal weapons in Qiqihar in northeast China.

6. Jim Yardley, “In Soccer Loss, A Glimpse ofChina’s Rising Ire at Japan,” New York Times,August9, 2004.

7. Charles Hutzler and Gordon Fairclough,“TheKoreas: China Breaks with Its Wartime Past,” Far

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When one combines China’s inflexible,unrealistic and anachronistic policieswith the irresponsible behavior of someTaiwanese politicians, the end result is a recipe for disaster.

15


Eastern Economic Review,August 7, 2003.8. Andrew Ward, “Investing in China: South

Korea Moves Ahead of Japan,” Financial Times (Asiaed.), June 23, 2004.

9. “South Korea to Increase Presence in China,”Asia Pulse, May 20, 2004.

10. “Fears South Korea Overly Dependent onChina for Trade,” Asia Pulse,August 11, 2004.

11. James Brooke,“China Fears Once and FutureKingdom,” New York Times,August 25, 2004.

12. Hutzler and Fairclough.13. “Chinese Article Says North Korea Talks

Progressing on ‘Road of No Return,’” ZhongguoXinwen She, June 27, 2004, in BBC MonitoringInternational Reports, June 27, 2004.

14. “China, Taiwan Ratchet up Rhetoric onTensions,” Reuters,August 7, 2004.

15.Technically, the Democratic Progressive Party(DPP) was formed in late 1986—before martial lawwas lifted. For more information, see John F.Copper, Taiwan: Nation-State or Province, 4th ed.(Boulder, Colorado: Westview Press, 2003), 136.

16. Many of the points raised in this portion ofthe essay may be found in Dennis V. Hickey,“Beijing, Not Taipei, Promoting TaiwanIndependence,” Chicago Tribune, June 1, 2004.

17. Taiwan also engages in this practice. Somecountries, such as Paraguay, unabashedly pledge torecognize whichever government provides the mostfinancial assistance.

18. Tyler Marshall and Mark Magnier, “ChenDefends Referendum: Taiwan is a Free andSovereign Country,” China Post, February 9, 2004.

19.“Taiwan Brushes Off China’s Latest Threat toAttack,” Reuters,August 3, 2004.

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Michael R. Chambers is assistant professor of political science at Indiana State University.

A t the first ASEAN + 3 summit, held inMalaysia in December 1997, China andthe Southeast Asian countries agreed to

“promote good neighborly and friendly relations,increase high-level exchanges, [and] strengthen themechanism of dialogue and cooperation in all areasto enhance understanding and mutual benefit.”1

Since that time, the People’s Republic of China(PRC) has made great efforts to demonstrate itsgood neighborliness and friendship to the countriesof Southeast Asia.These efforts have a dual purpose:to dispel any concerns among ASEAN states of a“China threat,” and to maintain a peaceful and sta-ble regional environment in which the PRC canpursue its goal of strategic economic development.

Beneath these surface goals is an additionalrationale for China’s efforts: to promote Chineseleadership and influence within the region, particu-larly within the context of an East Asian communi-ty. Such a community would be useful as a strategicbuffer should China come under pressure from theUnited States at some point in the future, since thedevelopment of this community appears to bepremised on the reduction of American influence inthe region. Moreover, Beijing’s influence within thiscommunity would allow it to pursue its own inter-ests within the region, particularly on sensitive andimportant issues such as Taiwan. Over the near andmedium terms, this growth of Chinese influencewill present challenges to the countries of SoutheastAsia as well as to the United States, but it is unlikely(barring a major crisis or deviation from the path ofcurrent developments) that it will pose a seriousthreat to either ASEAN or the United States.

CHINESE THREATS, PAST AND PRESENT

Although the PRC has good relations with all of itsSoutheast Asian neighbors today, it has been per-ceived as a serious security threat by each of thesecountries in the past. In the 1950s to the 1970s,non-communist Southeast Asia felt the Chinesethreat based on the PRC’s support for communist

insurgencies and for North Vietnamese efforts toreunify with the South. By the early 1980s, follow-ing Vietnam’s invasion of Cambodia in late 1978,China was cooperating with ASEAN against theVietnamese expansionism. Beijing also cut its sup-port to the communist insurgencies in those coun-tries in an effort to demonstrate its desire for friend-ly cooperation with its non-communist neighbors.These overtures had more success with someSoutheast Asian countries (e.g.,Thailand) than withothers (e.g., Indonesia), which continued to per-ceive a stronger threat from the PRC.

Following the resolution of the Cambodian con-flict in 1991, and with more than a decade of market-oriented economic reforms in the PRC, SoutheastAsian perceptions of threat from China shifted fromideological to territorial, with the Spratly Islands asthe primary focus of attention. Sitting astride themajor sea-lanes through the South China Sea andwith possibly rich deposits of oil near them, theSpratlys are claimed in whole or in part by the PRC,Taiwan, Vietnam, the Philippines, Brunei, andMalaysia. In 1988, following a naval clash withVietnam,China occupied several islets in the Spratlys,for the first time supporting its claim to the islandswith physical occupation. Beijing’s assertions to theseislands were supported in February 1992 with its

China and Southeast Asia:Creating a “Win-Win” Neighborhood

MICHAEL R. CHAMBERS

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promulgation of the PRC’s Law on the TerritorialSea and Contiguous Zone. Despite Chinese offers tojointly develop the region around the Spratlys, Chinaoccupied Mischief Reef in early 1995, an islandclaimed by the Philippines. Chinese claims to theSouth China Sea, not merely the islands, seemed toindicate that it also asserted possession of maritimeareas within Indonesia’s exclusive economic zonenear Natuna Island, thereby dragging Indonesia intothe conflict despite its lack of claims to the Spratlysthemselves. Southeast Asian concerns about the possi-bility of rising Chinese hegemonism in the regionwere further exacerbated by the live-fire missile teststhe PRC conducted in 1996 in an effort to influencethe elections in Taiwan that March.

In the late 1990s, negotiations finally began on acode of conduct to govern the actions of the vari-ous claimants in the South China Sea. Despite sev-eral years’ efforts, the respective parties have yet toagree to a code of conduct, although ASEAN andChina issued a Declaration on the Conduct ofParties in the South China Sea at the 2002 ASEAN+ 3 summit.This declaration urges restraint by theclaimants and suggests several confidence-buildingmeasures to promote a peaceful resolution throughdialogue. While tensions and anxieties have beenmitigated by the negotiations and the Declaration,they have not been erased, as demonstrated byVietnam’s response to the recent Sino-Philippineagreement to conduct a study of seismic data forparts of the disputed Spratly Islands that could beused for later oil exploration.2

Over the last few years, Southeast Asian coun-tries have also come to perceive an economicthreat from the PRC.This threat was first broughthome during the 1997–98 financial crisis, withChina’s promise not to devalue the renminbi.While this was a pledge of good neighborliness, italso pointed to the PRC’s ability to undermineSoutheast Asian exports to world markets based onexchange rates. Since then, China has made inroadson Southeast Asian export markets as it has movedup the technology ladder, and has also attractedmore foreign investment away from Southeast Asiainto the PRC. Even those Southeast Asian coun-tries, such as Thailand, that have found ways tojump on board the Chinese economic growthtrain by supplying industrial resources, have foundthat this beneficial export relationship can have its

downsides, as was evident from media stories inspring 2004 wondering how badly Thailand wouldbe hurt by a slowing of the Chinese economy.

GOOD NEIGHBOR, NOT A THREAT

Chinese efforts to reduce Southeast Asia’s perceivedthreat from the PRC and improve relations withthese neighbors can be traced back to the 1970s, asMalaysia, the Philippines, and Thailand establisheddiplomatic relations with Beijing in the context ofthe end of the Vietnam War. Relations improvedfurther in the 1980s as ASEAN and China joinedtogether to oppose Soviet-supported Vietnameseexpansionism in the region. In particular, Chinaformed an informal security alliance with Thailandas the “front-line state” opposing the Vietnameseforces in occupied Cambodia, leading to increasingcooperation between these two countries. From thisposition,Thailand played a critical role as a bridgebetween the rest of ASEAN and China, and workedto alleviate remaining fears of Chinese support forcommunist insurgencies within Southeast Asia.

With the end of the Cold War and the Cambodiaconflict in the early 1990s, relations continued toimprove between China and its Southeast Asianneighbors: Indonesia, Singapore, and Brunei estab-lished formal diplomatic relations with the PRC,Vietnam normalized relations with its northernneighbor, and Beijing became a consultative partnerof ASEAN in its annual dialogues with friendlycountries. Despite its initial anxieties about multilat-eral regional institutions,China joined the Indonesia-sponsored South China Sea informal workshops andbecame a founding member of the ASEAN RegionalForum (ARF) in 1994. Even though there were lin-gering Southeast Asian anxieties from Beijing’s previ-ous policies and the South China Sea territorial dis-pute was slowly heating up, the PRC desired to posi-tively engage its Southeast Asian neighbors.

That engagement has intensified since 1997.Participating in the first ASEAN + 3 summit,China formally pledged to develop a “partnershipof goodneighborliness and mutual trust” withASEAN as they moved into the 21st century.3 Togive substance to this pledge, Beijing promised notto devalue its currency during the financial crisisthat erupted that year, and it extended U.S. $1 bil-lion toward the bailout of Thailand as well as other

funds to assist the afflicted Southeast Asian coun-tries. Compared to the more reserved actions ofthe Japanese and Americans to assist these coun-tries, China was seen by the regional states asbehaving quite generously and responsibly.

Beijing took further steps to alleviate regionalanxieties about Chinese hegemony and to bolsterits partnership of good neighborliness withSoutheast Asia in the following years. During1999–2000, the PRC signed cooperation frame-work agreements with each of the ten ASEANstates that laid out road maps for political, eco-nomic, social, cultural, security, and diplomaticcooperation into the 21st century. In 2002, Chinasigned agreements with ASEAN to create anASEAN-China Free Trade Area by 2010 (with fivemore years for some poorer members of ASEANto implement the necessary policies), to cooperateon non-traditional security issues, and the declara-tion of conduct in the South China Sea. In 2003,China became the first non-ASEAN state toaccede to the Treaty of Amity and Cooperation,and the two sides agreed to form a “StrategicPartnership for Peace and Prosperity.” Beyond theagreements, the PRC has cooperated in the areasof non-traditional security issues. Beijing partici-pated in and hosted high-level meetings to copewith illegal drug production and trafficking, andjoined regional meetings to cooperate on healththreats, such as SARS. Economically, Beijing hasworked with the other states of the GreaterMekong Subregion to develop that river and buildroads in the region in order to enhance subregion-al trade and commerce. Since October 2003, it hasinstituted an “early harvest program” in the tradeof fruits and vegetables that Thailand, Cambodia,and other Southeast Asian countries have benefit-ed from. And there has been an increase inChinese investment in Southeast Asia since PrimeMinister Wen Jiabao’s pledge to encourage it at theASEAN Business and Investment Summit in Balilast year. Such investment helps to alleviateSoutheast Asian concerns that China’s economicgrowth will hurt them, and gives substance toBeijing’s claims that its development will be a“win-win” proposition for itself and the region.

China’s promotion of this good neighbor diplo-macy is intended at least in part to dispel SoutheastAsian anxieties about a “China threat.” Repeatedly,

Beijing has asserted that it will not seek hegemonyas it develops, and that it will not follow the bully-ing ways of other great powers that have risen inthe past. By working to build a partnership withASEAN on many issues, ranging from the creationof the free trade area to the drug trade, China candemonstrate its good intentions to these neighbors,and demonstrate that it also has a stake in the coop-erative resolution of regional problems. TheChinese are aware Southeast Asia can either accom-modate or balance against China’s rising economicand political influence. The preference is foraccommodation (or at least acquiescence) inChina’s rise; balancing would likely entail closerSoutheast Asian ties to the United States, and wouldraise the costs to China of its rise as a regional andeventually global power. Moreover, many of theSoutheast Asian countries seem willing to accom-modate China’s rise, and seek to profit from itthemselves. Rather than provoke balancing behav-ior, it is prudent policy for China to seek to reassurethese neighbors, to include them in the benefitsfrom China’s rise, and to be a good neighbor.

Besides reducing fears of a China threat, thePRC’s good neighbor diplomacy is intended to fos-ter and maintain a peaceful and stable regionalenvironment in which China can pursue its strate-gic economic development. Since the economicreforms began in 1978, the post-Mao leadership hasemphasized economic development as the means toachieve domestic prosperity and as the criticalengine for driving the PRC’s rise to great powerstatus. In order to focus on this fundamental eco-nomic goal, China desires regional peace and stabil-ity, as it has said on numerous occasions.This is par-ticularly true today, as Beijing has identified thecurrent period as one of strategic opportunity dur-ing which it can attempt to build a moderatelyprosperous society by the year 2020. Toward thisend, the Chinese have tried to dampen down theSpratly Islands conflict and have negotiated resolu-tions to land and maritime border disputes withVietnam. More broadly, they have promoted dia-logue as the correct way to manage any disputeswithin the region.And Beijing has been promotingstrengthened economic ties, including the ASEAN-China Free Trade Area, to bring greater prosperityto the region in the hopes that shared prosperitywill foster peace and stability.

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STRIVING FOR REGIONAL LEADERSHIP

AND INFLUENCE

Reducing fears of a China threat and maintaining apeaceful regional environment are two conspicuousgoals of China’s good-neighbor diplomacy towardSoutheast Asia. In addition, there is a third underly-ing rationale: China is striving for regional leader-ship and influence.This leadership is being pursuedthrough the promotion of regional integration—thecreation of an East Asian community that bringstogether Northeast and Southeast Asia in a combi-nation of economic, social, cultural, and politicalrealms. There is also movement to build up fromproto-regional institutions (e.g., the ASEAN + 3summitry) to full-fledged regional institutions, suchas the efforts to convert the ASEAN + 3 summitinto an East Asian Summit by 2005, and the discus-sion of building the ASEAN-China Free Trade Areaand ASEAN-Japan Free Trade Area into an EastAsian Free Trade Area. Beijing has been the promot-er of several functional cooperation initiatives, suchas the ASEAN-China Free Trade Area and ministe-rial meetings on transnational crime, and it hasrecently proposed a new security dialogue series forsenior defense officials from around the region andbeyond. It also launched the Boao Forum in 2001 asan Asian version of the World Economic Forumheld annually in Davos, Switzerland. It supportedThai Prime Minister Thaksin Shinawatra’s initiativeto launch the Asia Cooperation Dialogue (ACD) in2002, and hosted the third foreign minister’s meet-ing of the ACD in Qingdao in June 2004.

The majority of these initiatives and develop-ments have a strong “East Asia for the East Asians”theme. As such, they leave the United States out ofthe equation, which is what the Chinese would pre-fer. Based on population, size of military, and increas-ingly on its role as the engine of regional economicgrowth, China is the dominant country in the

region, and we should expect that it would seek toplay a leadership role—even as it publicly claims def-erence to ASEAN’s leadership in regional coopera-tion.4 Anxious that the United States might seek toconstrain China’s rise, Beijing would like to create anintegrated East Asian region that reduces Americaninfluence in the area. In April 2004, the ChineseForeign Ministry sponsored an academic conferencein Beijing to consider China’s approach to regionalintegration. In discussions with several of the partici-pants, it became clear that they saw the creation of anintegrated East Asian Community as a type of strate-gic buffer against future American pressures on thePRC, a ring of friendly countries that would supportChina. In many ways, this strategy is reminiscent ofZhou Enlai’s “zone of peace” strategy in the 1950s,with which China sought to establish a line of neu-tral if not friendly states stretching across China’ssouthern periphery from Pakistan over to Vietnam.As the leader of this emerging regional community,China would be able to exert influence over itsneighbors on issues of importance to the PRC.

China is also increasing its regional influencethrough the strengthening of bilateral relations withSoutheast Asian countries, especially economic rela-tions. Based on their informal alliance of the 1980s,China has long had strong, friendly relations withThailand, relations that allowed Beijing to persuadeBangkok to cancel a planned Falun Gong confer-ence there in 2001. More recently, China’s agree-ment to major investment projects in Cambodia,Myanmar, and even the Philippines will buy it goodwill that it may call on later. Beijing is even helpingto underwrite Laos’s hosting of the ASEAN andASEAN + 3 Summit in November, donating RMB13 million in grants for transportation and securitycosts.5 In recent months, China has also proposedenhanced military-to-military exchanges as well asmilitary-security dialogue mechanisms with itsAsian neighbors.Tightened military relations withindividual Southeast Asian countries would provideanother means of influence for Beijing to advanceits interests in the region.

The big question is: on what interests will Chinaseek to influence the policies of its Southeast Asianneighbors, at least over the next several years? Asnoted above, Beijing has already successfully thwart-ed activities of Falun Gong, seen as a domestic threatin the PRC. Another obvious interest is Taiwan.

Based on population, size of military,and increasingly on its role as theengine of regional economic growth,China is the dominant country inSoutheast Asia.

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Beijing lashed out at Singapore after a private visitby that country’s Deputy Prime Minister Lee HsienLoong to Taiwan in July 2004, canceling a visit toSingapore by China’s central bank governor ZhouXiaochuan and threatening to delay discussions ontheir bilateral trade. Following his inauguration asprime minister in August, Lee reaffirmedSingapore’s adherence to the “one China” policy, amove echoed by other Southeast Asian countries inthe last few weeks. The Chinese message toSoutheast Asia was clear: do not cross Beijing on thisfundamental issue of national integrity.

Beyond the Taiwan issue, what others mightarise? One that seems to be looming is Chineseconcern with the security of shipping through theStrait of Malacca. According to a recent report,China imports about one-third of its oil consump-tion, with nearly 80 percent of the imports comingfrom the Middle East and Africa via Southeast Asiansea- lanes, particularly the straits near Malacca andSingapore.6 As the PRC becomes increasinglydependent on these narrow waterways for its oilimports, as well as its trade with Europe, South Asia,and Africa more generally, it becomes vulnerable tothe possibility of piracy or terrorism in the Strait ofMalacca, or perhaps even blockage by the U.S. navyin the event of war over Taiwan.To cope with thisemerging problem, Beijing has expressed interest inpipelines that could bypass the Strait. In particular, ithas expressed an interest in the strategic energyland-bridge project that would pipe oil acrossThailand’s Kra Isthmus, and it is consideringwhether to build a pipeline from Myanmar’s deep-water port at Sittwe on the Bay of Bengal coast toKunming, the capital of Yunnan province.Alternatively, China has also expressed an interest injoint efforts to secure the sea-lanes through theStrait, raising the issue with Malaysian PrimeMinister Abdullah Ahmad Badawi during his lateMay visit to Beijing.The proposal was not receivedvery warmly, as the Malaysians are sensitive aboutsovereignty issues pertaining to the Strait.Nevertheless, this is an issue on which the Chinesemight bring pressure to bear on the Malaysians,Singaporeans, and Indonesians at a later date.ThePRC might also seek to use its influence in theregion on the terms of international trade negotia-tions and the provision of naval repair and otherfacilities to the U.S. military.

THE CHALLENGE OF HAVING A RISING

CHINA AS NEIGHBOR

Over the near- to medium-term (the next five tofifteen years), China is likely to present a challengeto Southeast Asian states, rather than a true threat totheir vital interests.These challenges are more likelyto come in the economic and trade areas than thepolitical and security realms. Militarily, the PRC isconstrained by its limited capabilities to projectpower into Southeast Asia.The large ground forcesbut modest air and naval capabilities of the People’sLiberation Army (PLA) can be used to conduct mil-itary operations against weaker adjacent neighbors(e.g., Burma, Laos,Vietnam), but are inadequate foroperations against more distant maritime SoutheastAsian countries. This constraint will erode asChina’s economic growth provides the wherewithalto continue the modernization of the PLA Navyand Air Force, particularly through the furtheracquisition of Russian Su-27 and Su-30 aircraft andSovremenny-class destroyers, and perhaps—in sev-eral years—one or two aircraft carriers. Even withthe acquisition of more modern, power-projectioncapabilities, China will still likely be restrained fromthreatening the members of ASEAN by its desiresfor a peaceful and stable regional environment inwhich to pursue its more fundamental goal ofstrategic economic development. Deviating from itsgood neighbor diplomacy could undermine themore positive perceptions of China among ASEANstates that have been developing over the last sevenyears. It could change the Southeast Asian responseto China’s rise from accommodation to counterbal-ance, with consequent increasing involvement ofthe United States or other outside powers in theregion. The consequences for the PRC would bemore negative than positive.

Likewise, China has few political incentives tothreaten the core interests of its Southeast Asianneighbors. Regional integration is providingBeijing with a degree of influence and leadershipthat it lacked previously. The Chinese andSoutheast Asians all have an interest in regional sta-bility and mutually beneficial cooperation inwhich to materially improve the lives of their citi-zens.They all want to crack down on transnationaldrug rings, combat terrorism, and prevent thespread of infectious diseases such as SARS. It will

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be up to China, the largest country in the region,to ensure that the cooperation remains a “win-win” proposition for the Southeast Asians, with theSoutheast Asians even winning a little more bene-fits. If Beijing should cease being a generous neigh-bor, then concerns over the relative distribution ofthe benefits from cooperation will intensify, andsome of the Southeast Asians may shift fromaccommodating to balancing against China’s rise.China’s relations with Thailand can be instructivehere. Despite the great trumpeting of the benefitsto the Thais of participation in the “early harvestprogram” for liberalization of trade in agriculturalgoods, Chinese exports of fruits and vegetablesrose much more strongly in the first several monthsof the program than Thai exports of such items toChina, with widely reported claims that Chineseproduce was flooding Thai markets. This develop-ment angered many Thai farmers, and led to publicquestioning of the utility of the trade agreement.Discussions between Prime Minister Thaksin andthe Chinese leadership helped to address some ofthe problems, but beyond that, and in a replay ofthe “friendship prices” for military hardware in the1980s, Beijing agreed to accept Thailand’s surplusdried longans as payment for Chinese main battletanks.7 Such generosity may not have assuaged allthe farmers who felt hurt by Chinese exports, butit did reaffirm to the Thai government the benefitsof working with China.

As this example suggests, it is in the economicrealm that we are most likely to see Chinese chal-lenges to ASEAN. As China continues to developand move up the technology ladder in its exportgoods, it will continue to eat away at the shares ofthe more developed Southeast Asian countries inglobal export markets. The PRC is also likely tocontinue to attract foreign investment away fromthe ASEAN countries toward itself. While thesetrends can be overcome to some extent throughASEAN countries exporting raw materials or inter-mediate goods to China, or by becoming a target forChinese overseas investment, over-dependence onthe Chinese economic engine can also leaveSoutheast Asian economies vulnerable. The chal-lenge for them will be to profit from China’s eco-nomic boom while maintaining strong relationswith other trading powers in order to avoid vulner-ability to the vagaries of the Chinese economy.

IMPLICATIONS FOR THE UNITED STATES

Clearly, the growth of Chinese influence in SoutheastAsia has negative consequences for the United States,especially as Beijing’s desires for East Asian integrationare premised on the reduction of American regionalinfluence. In particular, there seems to be a growingsentiment in the region to avoid choosing sides(China or the United States) in the event of conflictbetween these two countries over Taiwan. Such neu-trality could hinder U.S.prosecution of such a war if itresulted in the denial of access to critical naval and airfacilities in Southeast Asia.

But beyond this lack of support in a Sino-American military clash over Taiwan, it is not clearhow much China’s good neighbor diplomacy inSoutheast Asia will undermine U.S. national interests.There are two reasons for this lack of alarm.First, overthe near and medium terms, China will not developinto a global power to rival the United States. It willlikely still be developing in that direction, but it willalso depend on the United States to accommodate itsrise. In particular, China’s rise is based on its strategiceconomic development, which in turn is driven pri-marily through its exports of manufactured goods. In2002, nearly 25 percent of Chinese manufacturedexports came to the United States; should the PRCbegin to aggressively challenge U.S. interests, even inSoutheast Asia, it could find the critical Americanmarket closed to its exports.

Second, while the ASEAN countries are accom-modating the growth of China and welcome itsgood neighbor diplomacy, they are not appeasingthis emerging dragon. Rather, they are following ahedge strategy: the Southeast Asians are trying toaccommodate China’s rise and even to profit from it(if they can), but they are also maintaining and/orstrengthening relations with other major external

Despite Beijing’s efforts to convinceSoutheast Asia of its good neighborlinessand desire for a partnership, severalSoutheast Asian countries still harborlingering suspicions and anxieties about the Chinese.

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powers, including the United States, Japan, andIndia. Maintaining these other relationships providesome balance for the Southeast Asians, and givethem options should the relationship with Chinaturn sour. Moreover, despite Beijing’s efforts to con-vince Southeast Asia of its good neighborliness anddesire for a partnership, several Southeast Asiancountries still harbor lingering suspicions and anxi-eties about the Chinese. So long as these continue,ASEAN members will welcome the involvement ofadditional outside powers to balance Chinese influ-ence. Based on these considerations, Washingtonwill face many challenges in coping with Chinesegood neighbor diplomacy and growing influence,and these challenges will have to be managed well.But Chinese policies toward Southeast Asia do notappear to pose a grave threat to U.S. interests thatrequires immediate or drastic action.

CAVEATS

Finally, as mentioned at the outset, the analysis here ispremised on the assumption that the trajectory of cur-rent developments continues for the next five to fif-teen years. In particular, it assumes that China willenjoy stable political rule and economic growth. Aserious political, economic, or social crisis in the PRCcould alter Beijing’s approach to the region, thus end-ing the good neighbor diplomacy and increasing theChinese threat to Southeast Asia. Similarly, war in theTaiwan Strait could drastically affect relations amongASEAN, the PRC, and the United States, in the wayssuggested above. Under such circumstances, the

Chinese approach to Southeast Asia might no longerpresent a challenge that needs to be managed well, buta grave threat to American interests.

ENDNOTES

1.“Joint Statement of the Meeting of the Headsof State/Government of the Member States ofASEAN and the President of the People’s Republicof China,” December 16, 1997.

2. Agence France-Presse, “Vietnam angry at Sino-Philippine plan to survey Spratlys,” South ChinaMorning Post, September 10, 2004.

3. This pledge is included in the Joint Statementissued by the ASEAN and Chinese leaders, but isalso the theme of President Jiang Zemin’s speech atthe summit. See “Chinese president tells ASEANsummit of hopes for ‘good-neighbourly partner-ship,’ ” Xinhua News Agency, December 16, 1997.

4. In June, the PRC “reaffirmed” its “support forASEAN’s role as the major driving force in East Asiacooperation.” See the “Joint Press Release of theASEAN-China Foreign Ministers’ InformalMeeting,” Qingdao, PRC, June 21, 2004.

5.“China grants aid to ASEAN summit,” XinhuaGeneral News Service,August 27, 2004.

6. Michael Richardson, “Beijing’s burning questfor oil security,” South China Morning Post,August 6,2004.

7. “China Willing to Buy Thailand’s Surpluses,”Thai Press Reports, June 24, 2004, via Global NewsWire—Asia Africa Intelligence Wire.

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RECENT ASIA PROGRAM PUBLICATIONS

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Special Report No. 113 - The U.S.–Japan–China Triangle: Who’s the Odd Man Out?Ezra F. Vogel, Gilbert Rozman, Ming Wan, July 2003

A copy of any publication can be obtained free of charge by visiting the Asia Program online at http://www.wilsoncenter.org/asia. A more complete list of Asia Program publications may also be found online.

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