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Beijing’s elevated aspirations [Financial Times, 10 November, 2011]

Updated On: Nov 10, 2011

By Geoff Dyer in Beijing

If Bismarck were in Beijing today, he would say this was our nightmare,” says Shi Yinhong, an international relations scholar at Renmin University in Beijing, about China’s relations with the rest of Asia. “His advice was always that if you have five neighbours, you need to be on good terms with at least three. That is not our case.”

For the past few months, Asia has had a sneak preview of the sort of diplomatic minefields that could lie ahead as China’s influence and power expand. Unresolved territorial disputes have flared up, a possible arms race has started to take shape and there have been the stirrings of a real strategic rivalry between the two main powers in the region, China and the US – which will be one main backdrop when leaders of the Group of 20 developed and emerging nations meet in Seoul on Thursday.

At the root of the anxieties is the worry that a self-confident China, which recently overtook Japan as the second-largest economy in the world, wants to translate its economic power into greater political and military influence. Beijing’s massive stimulus plan helped Asia to ride out the global financial crisis with relative ease and its sustained economic dynamism is of big benefit to other countries in the region. But the recent tensions serve as a warning that the rise of China could become harder to accommodate politically.

“I fear we could be about to enter a much more rocky period,” says Simon Tay, chairman of the Singapore Institute of International Affairs.

When Deng Xiaoping led China, he famously urged his colleagues to “keep a cool head and maintain a low profile” because he believed – as Otto von Bismarck did in Germany a century before – that economic expansion required his country to lay to rest old antagonisms in its immediate neighbourhood. For the decade that followed the Asian economic crisis in 1997, China’s leaders did just that. Behind slogans such as “win-win” and “peaceful rise”, they settled land border disputes, signed loan, aid and trade deals and generally did all they could to seem unthreatening.

The past year, however, has brought signs that China is shunning that softly-softly approach in Asia. The most obvious example is in the South China Sea – where the Spratly and Paracel islands are claimed in part or in full by China, Vietnam, Malaysia, Taiwan, the Philippines and Brunei.

Amid increasing warnings that China is pushing its claims more aggressively, the simmering tensions came to the fore in June when Hillary Clinton, US secretary of state, told a regional gathering that the US could act as a mediator in the South China Sea – a move that was supported by a handful of other Asian governments. According to officials present at the meeting, Yang Jiechi, China’s foreign minister, responded angrily that the proposal was an “attack on China” and told the nations that supported the US intervention: “China is a big country and other countries are small countries and that is just a fact.”

In September, Beijing became embroiled in a furious diplomatic dispute with Tokyo after the Japanese coastguard arrested the captain of a Chinese fishing boat for ramming its vessels in the waters off another group of disputed islands in the East China Sea. At one stage, Japanese companies reported that shipments of rare earths – metals that are used in many aspects of manufacturing and which China dominates – had been blocked. Yoichi Funabashi, editor-in-chief of the Asahi Shimbun, one of Japan’s main dailies, described Beijing’s tactics as a campaign of “diplomatic shock and awe”.

Disputes over the various islands have flared up many times before. But one reason why the recent disagreements have caused so much anxiety in Asia is that they come as China is beginning to put in place a navy that could start to challenge US dominance in the region’s seas.

China’s navy used to focus mainly on preparing for war over Taiwan. After years of large investments, however, its remit is now broadening to include the protection of Chinese economic interests overseas and its vast seaborne trade. “With our naval strategy changing now, we are going from coastal defence to far sea defence,’’ Rear Admiral Zhang Huachen, deputy commander of the East Sea Fleet, told Xinhua news agency this year.

China has a large and growing fleet of nuclear submarines and has opened an underground naval base in Hainan island off the south coast, allowing quicker access to the South China Sea.

According to US officials, China has also tested long-range ballistic missiles that could be used against aircraft carriers stationed 1,000 miles from the Chinese coast. Although it is not yet clear whether the technology will be effective, it is part of a plan to extend Chinese naval influence well beyond what is called “the first island chain”, stretching from Indonesia to Japan and encompassing the disputed islands in the East China Sea.

Elizabeth Economy, a China specialist at the Council on Foreign Relations, a US think-tank, argues that the military expansion is part of a broader strategy to forge a more activist foreign policy – which also includes, for instance, proposals for the renminbi to play a larger international role and huge investments in turning domestic state media companies into international news operations that can rival CNN or the BBC.

Rather than being a passive observer of events that avoids being drawn into new commitments, China wants to start shaping events to its own ends. “There is a much stronger desire from the top now to try and remake the rules of the game,” she says.

For other observers, the more assertive stance is less a decision by the leadership and more a reflection of pressures from below – from public opinion that can be at times strongly nationalistic, from elements within the Chinese military, from state-owned companies that have growing interests overseas and from politicians looking to position themselves for the next leadership transition in two years’ time.

Wang Junsheng, a young academic at the Chinese Academy of Social Sciences, says that especially among younger people, the start of “a healthy great power mentality” is influencing policymakers.

One response within the rest of Asia has been to ramp up arms purchases. Vietnam, for instance, has ordered $2.4bn of submarines and fighter aircraft from Russia.

But the growing anxiety about China also provides an opportunity for the US to reassert itself in Asian diplomacy after a decade when Washington was preoccupied by terrorism, Iraq and Afghanistan. As well as offering to mediate in the South China Sea disputes, the US has held naval exercises with the South Korean government, which was angered by China’s refusal to criticise what it believes was North Korea’s role in the sinking of a South Korean warship this year. The US navy also held a joint drill with Vietnam over the summer – 35 years after US troops withdrew from Saigon.

Indeed, both Barack Obama, US president, and Mrs Clinton have been travelling in Asia this week on trips designed to emphasise Washington’s new-found commitment to the region. “China is being challenged,” says Carl Thayer, an expert on south-east Asia at the Australian Defence Force Academy. “Some of the strategic trends that China thought were going its way are starting to be confounded.”

But just as many in Asia are concerned about the new signs of Chinese assertiveness, some also fear that the US will overplay its hand and embolden the very hardline voices in China who are already pushing for Beijing to take a tougher stand.

“The US is in danger of re-engaging in Asia on acrimonious terms,” says Mr Tay in Singapore. “If you are a strategic thinker in China, you do not need to be a paranoid conspiracy theorist to think that the US is trying to bandwagon Asia against China.” Some of the US statements have not gone down well in Beijing. After Mrs Clinton warned Cambodia last week not to become too dependent on China, one Chinese official remarked: “Can you imagine if the Chinese government told Mexico not to be too dependent on the US?”

Yet it is not inevitable that this series of events will quickly spiral into a broader geopolitical clash in Asia. Indeed, in the past few weeks there have been signs of the US and China trying to ratchet down the sort of tensions that have alarmed the region.

President Hu Jintao has announced he will visit the US in January and discussions between the two countries’ militaries have resumed after a hiatus of several months. At the regional meeting in Vietnam, where Beijing and Tokyo sparred again, Chinese premier Wen Jiabao also talked about creating a “sea of peace and co-operation” in the South China Sea – prompting hopes that a legally binding code of conduct for the sea can be negotiated.

“China appears to have recognised the costs of its actions and is taking steps to repair its image, such as restarting military-to-military ties with the US,” says Taylor Fravel, a China expert at the Massachusetts Institute of Technology. “Even if these steps represent only tactical shifts, they do underscore how China must continue to be sensitive to regional sentiments.”

The US, meanwhile, has postponed another naval drill with South Korea and the Obama administration has again declined to label China as a “currency manipulator” ahead of the G20 summit.

The tensions have also given new relevance to institution-building in the region. Asia has an alphabet soup of different forums, including Asean and Apec, that have sometimes struggled to define a clear purpose but could play an important role in accommodating China’s increasing power.

Even governments wary of China’s recent moves are also looking to strengthen ties with Beijing. As well as conducting drills with the US navy, Vietnam has, for example, also held military exercises with the Chinese. Asian countries hope to use the US and its military power as a hedge against a growing China, but not as an alternative to a country that has the most dynamic economy in the world.

Most of all, they want to avoid having to choose between, to borrow Bismarck’s words, those “two powerful heraldic beasts”. If tensions ascended that far, Asia would indeed be in for a time of much tumult.

Asean finds itself obliged again to heed its founding purpose

It would be an exaggeration to say that the countries of the Association of South-East Asian Nations are terrified of China, writes Kevin Brown. But only just.

“There is no doubt that China is growing increasingly, er, assertive,” says a top Asean official following the organisation’s recent summit in Hanoi. “They’ve never really abandoned the communist approach – you know, that what I have is my own and what you have is for discussion. When they were [economically] small, that didn’t matter. Now they are big it is starting to matter a lot.”

This view of China as a potential aggressor is not a revelation for Asean, which was founded in 1967 as a regional non-communist grouping beneath the US strategic umbrella. But after a long period in which the Asean countries concentrated – with significant success – on economic development, China is once again emerging as a motivating principle for the organisation.

Its 10 members – Thailand, Indonesia, the Philippines, Malaysia, Singapore, Brunei, Burma, Cambodia, Vietnam and Laos – have little in common except their location. Yet even setting aside Burma – whose regime relies on Beijing for support – all have had to recognise that they cannot escape the strategic implications of China’s rise.

Their response has focused on seeking to corral China by engaging it in regional diplomatic discussions centred on the East Asia Summit, a forum set up by Asean that also includes Japan, South Korea, India, Australia and New Zealand.

Beijing has opposed any US role in regional groupings, arguing strongly last year against involving Washington in new Asia-Pacific forums proposed by Japan and Australia. But in a move that signalled growing regional concerns, Beijing was outflanked two weeks ago by Asean leaders who agreed in Hanoi to invite the US (and Russia) to join next year, nullifying China’s diplomatic advantage.

Dealing with China remains tricky for Asean, however, because it is such a compelling economic partner. Asean and China this year implemented the world’s largest bilateral trade agreement, measured by population, with trade flows of $231bn in 2008, according to China’s commerce ministry.

Although most leaders think that US involvement in the region provides an essential counterweight to Chinese assertiveness, they do not necessarily applaud Washington’s methods.
“The Americans don’t necessarily understand the Asian culture very well, and they can be counterproductive,” says the senior Asean official, citing demands about human rights made by Hillary Clinton, US secretary of state.

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