IV. The Political Dimension
Power has been successfully transferred by post-1949 generations of leadership. The present Fourth Generation faces formidable tasks. Repression has been a key weapon in maintaining power. Parade magazine noted in its February 13, 2005 issue that despite its economic liberalization China is one of most repressive nations on earth.
The Chinese Communist Party fears present and potential centers of power, thus it has ruthlessly crushed or forced into exile dissidents within its ranks. As for those outside Party discipline, the otherwise seemingly unobjectionable idealistic Falun Gong organization has been bitterly opposed precisely because it is organized and aspires to nonmaterial goals other than those ordained by the Party.
George J. Gilboy made a penetrating political analysis of the sclerotic Chinese political system in his analysis of "The Myth of the Chinese Miracle" in the July-August issue of Foreign Affairs magazine. Gilboy wrote that the lack of transparency and accountability in the system has bred what he calls an "industrial strategic culture" that encourages Chinese managers to "seek short-term profits, local autonomy and excessive diversification."
Chinese firms focus on developing privileged relations with officials in the Party hierarchy and spurn horizontal associations and broad networking with each other. They rely on imported technology and components and tend forgo investment in long-term technology development and diffusion.
The Chinese political system and political culture is anchored in the past tradition of rule from above. Patron-client relationships are favored. Vertical rather than horizontal lines of authority result. Gilboy comments, "China remains a fragmented federal system, its fractious regions unified by a single political party. (41)
The Party is a pervasive and often intrusive presence "in all aspects of organized life, including industry associations, leaving few avenues for firms to work together for legitimate common interests." Obviously, corruption results from the need to curry the favor of higher ups.
The Party continues to favor State Owned Enterprises (SOEs) despite their generally dismal records of achievement. Why? The answer is simple. SOEs are easier to control than the rambunctious private sector. Nevertheless, China has cautiously tiptoed toward the free market and even introduced some rules to regulate the system; however, it lacks institutional checks and balances. The result? Party officials continue "to exercise wide discretion in defining and implementing those rules, especially at the local level." Policies are manipulated to pursue particularistic local goals -- often to the benefit of corrupt local officials.
The Party's political goal is basically to promote social and political order. Economic efficiency is a lesser goal. Jeffrey N. Wasserman's article "A New Legitimacy Crisis in Beijing" in the December 2004 issue of the Far Eastern Economic Review analyzes the problems the Party faces in retaining its legitimacy in order to maintain one-party rule. He notes that it is "not just brute force, high growth rates or appeals to nationalism" that enables the Party to cling to power. He cites Vivienne Shue's analysis in her chapter "Legitimacy Crisis in China?" in State and Society in 21st Century China edited by Peter Gries and Stanley Rosen (Routledge 2004) that the Party's legitimacy rests precisely on its assertion that its continued rule is better than taking a chance on unclear alternatives.." The Party's legitimacy does not rest on its economic managerial capacity "but on its political capacity to preserve a peaceful and stable order under which, among other good things, the economy can be expected to grow." The Chinese Communist Party has, therefore, a great stake in maintaining a stable and peaceful external environment. The Party has kept nationalism under control but the Taiwan issue is a smoldering bomb.
V. The Strategic Dimension
ASEAN was formed in 1967 in the midst of the Vietnam War when China was in the throes of the Cultural Revolution. Significantly, none of the five original members had relations with China. The five original members (Malaysia, Thailand, Malaysia, Singapore and the Philippines) all had solid relations with the United States but deliberately set out on a course independent of American influence. ASEAN was chiefly concerned with domestic and bilateral issues since each member had border problems with one or another of its neighbors.
Washington was preoccupied with Vietnam and then the normalization of relations with China in ASEAN's early years and paid the new organization scant attention. Nevertheless, by 1971 ASEAN made its venture into regional diplomacy by proclaiming a Zone of Peace, Freedom and Neutrality. ASEAN winked at the continuing presence of the U.S. 7th Fleet in the Western Pacific, which was acknowledged to contribute to regional stability.
ASEAN reacted vigorously to the fall of Saigon in 1975 and the reunification of Vietnam in 1976. The first ASEAN Summit was held in Bali in 1976 and the Treaty of Amity and Cooperation and the ASEAN Concord were signed embodying the goals of non-interference and non-aggression. Meanwhile, ASEAN attempted to smooth relations with Vietnam and China. However, China's support of the Cambodian Khmer Rouge and the Soviet support of Vietnam presaged a coming conflict.
Relations between China and the United States were normalized on December 15, 1978, but Vietnam invaded Cambodia on December 28 in an effort to dislodge the Khmer Rouge government. which retreated to the Thai border where it was supported militarily by China. ASEAN began a diplomatic campaign to reduce Chinese support of the Khmer Rouge.
By 1981, China was cooperating with ASEAN against Vietnam, aided by the United States. In the next decade, ASEAN and the United States brought unrelenting diplomatic and military pressure against Vietnam; by the early 1990s the Soviet Union had imploded and had given up its support of Vietnam.
1991 was a key year in China's cooperation with ASEAN. China began attending the ASEAN's Post-Ministerial Conferences. In 1994 it also joined the new ASEAN Regional Forum of nation states, the so-called Track One organization. Track Two organizations of NGOs and other interested parties were also launched at this time. China played an increasingly active role in both.
China had various disagreements with ASEAN nations over South China Sea territories, particularly the Spratly Islands, and resisted multilateral ASEAN efforts to resolve disagreements, insisting instead that talks should be held at the bilateral level. Nevertheless, beginning in 1990 China attended periodic ASEAN Workshops on "Managing Potential Conflicts in the South China Sea" which were designed to ease tensions and to promote dialogue.
At Philippine urging, however, ASEAN found it necessary to issue a Declaration on the South China Sea at Manila on July 22, 1992, emphasizing the rights of states adjacent to the area and insisting that issues pertaining to sovereignty and jurisdiction should be resolved by "peaceful means, without resort to force." The Philippines was concerned over China's aggressive 1994-1995 actions in the Mischief Reef area of the Spratlys, an area it also claimed. Tensions reached dangerous levels.
ASEAN decided China should become a full ASEAN Dialogue Partner in 1996 in order to promote opportunities to defuse the situation.
All this preceded the 1997 Asian Financial Crisis in which Washington was perceived by ASEAN to be inadequately sympathetic to the region's problems. China was, however, perceived to be both sympathetic and helpful, particularly in refusing to devalue its currency and thereby adding to the financial turbulence. The immediate result was ASEAN's decision to form the 1997 ASEAN Plus Three (China, Japan and South Korea) arrangement and to begin holding annual ASEAN-China Summits.
The South China Sea issue continues to exist, but the ASEAN-China Declaration of November 4, 2002 at Phnom Penh of a Code of Conduct on Parties in the South China Sea should help promote " a peaceful, friendly and harmonious environment in the area "for the enhancement of peace, stability, economic growth and prosperity in the region." China's basic interest is to assert its sovereignty in the South China Sea with the corollary purpose of exploiting the supposed hydrocarbon resources that are thought to be there.
Notwithstanding the South China issue, Chinese diplomacy toward ASEAN has been adroit and well-crafted. It has produced excellent results. China now has very comfortable relations with its southern neighbors.
China has of course sought to rein in its North Korea neighbor, with little apparent success. China's relations with Russia are correct, but Russia has shown greater interest in improving its relations with Japan. China appears to regard Russia currently as a paper tiger strategically. but has been heavily dependent on Russia as a source of modern weaponry, including aircraft and naval vessels.
Chinese-Indian relations have been influenced by China's suspicions of Indian intentions regarding Tibet. However, China has not regarded India as a serious competitor until recent years.
Traditionally, China has sought good relations with Pakistan as a means of achieving an equilibrium in South Asia. India has become a more serious factor in the Chinese strategic calculus and Pakistan less so. India's nuclear capability has affected this reassessment. India has also had success in its diplomacy with the United States. China also apparently regards India as a possible partner in challenging U.S. hegemony. India's increasing economic capability has made it a worthy trading partner. India's success in IT has also drawn China's attention.
China's relations with Japan are uneasy. Chinese memories remain inflamed by Japans brutal actions in the 1931-1945 Pacific War. Beijing claims Japan has not adequately confronted or atoned for its wartime misdeeds and that it continues to honor and venerate war veterans including war criminals. Disputes have flared up over a group of disputed islands, over competition for Russian energy resources, over Chinese exploitation of oil fields close to Japan's Exclusive Economic Zone, indeed, a Chinese nuclear submarine entered Japanese waters off the southern coast of Okinawa in February, bringing on a diplomatic incident that caused China to issue a formal apology.
Nevertheless, Chinese-Japanese relations are close and getting closer. China is Japan's fastest growing big export market and the recipient of huge inflows of capital from Japanese companies investing in manufacturing facilities. In 2004, China including Hong Kong surpassed the United States as Japan's largest trading partner. China has been the major force behind Japan's improved economic performance in the past three years.
The problem for the two nations is to develop a relationship based on parity, even possibly emotional parity toward their historical experiences. The past will have to be overcome. Japan has been less enthusiastic and certainly less successful than Germany in acknowledging the sources of anger China and the two Koreas hold toward it.
Even as its need for greater cooperation with China appears to grow, Japan's attitudes toward China appear to be hardening. Tokyo is contemplating the end of its aid to China. which has been the largest recipient of Japanese aid. China along with North Korea was named in December 2004 as a "security concern."
On a different note, Prime Minister Koizumi is apparently considering forgoing his annual visit to the Yasukumi Shrine to the Japanese war dead. These visits have previously enraged the Chinese and Koreans.
Meanwhile, though, Japan is strengthening its security ties with the United States. The two nations issued a statement on February 19 that for the first time included security in the Taiwan area "as a common strategic objective." The statement also noted China's rapid military modernization, calling it a matter of concern and urging China "to be more transparent in its military planning and weapons procurement." Predictably the statement drew strong negative reaction from Beijing.
Taiwan remains an unstable element in the Chinese strategic environment. Beijing strongly asserts the island is a province of China and has undertaken a military buildup to back up its claim, but seems willing to countenance the island's autonomy if not its independence.
The failure of Taiwan President Chen Shuui Bian's independence-minded Democratic Progressive Party to win a legislative majority in the December 2004 elections had brought relative calm to Taiwanese domestic politics. In the aftermath of the elections, both governments authorized forty-eight cross-straits charter flights between January 29 and February 20, 2005. This was arranged by "non-official" experts on both sides and may point the way to future uses of such channels to promote relations.
Meanwhile, Chen Shuui Bien and James Soong Chairman of the opposition Peoples First Party have undertaken possibly historic measures to reduce tensions. They had agreed to relax restrictions on business ties with Beijing and to seek to improve relations with the Mainland.
Taiwan is China's fifth largest investor and businessmen have a strong incentive to maintain peace and promote direct trade, direct transport and other links. This fits China's strategy for the eventual reintegration of Taiwan without a destabilizing resort to force. However, the passage of the Chinese Ant-Secession Law stating that China reserved the right to use "non-peaceful means" to prevent Taiwan independence has revived the image of a bullying and dangerous China and has thrown Cross-Straits relations into confusion. The United States obviously desires peace in the Taiwan Straits. While it continues to shelter Taiwan under its security umbrella, America has cautioned Taiwan against pushing for independence.
U.S.-Chinese relations have come a long way since the accidental collision April 1, 2001, of a Chinese fighter aircraft with a U.S. EP-3 Navy spy plane. Both nations moved quickly to resolve the problem. China offered sympathy and cooperation to Washington after the September 11, 2001, Twin Towers terrorist attack. The Bush Administration had initially viewed China as a "Strategic Competitor" but has, instead, pursued the policy of "engagement" of earlier administrations. U.S. policy makers are uneasy, however, about China's growing economic and military capabilities, and the Pentagon and other elements of what President Eisenhower called the American military-industrial complex appear to be pushing for a more adversarial relationship with China. This is not the predominant view of the American Establishment. That view is that China should be treated as a normal, though prickly, Great Power, neither a strategic partner nor a probable adversary.
David Shambaugh has noted assurances given to former Secretary of State Colin Powell in 2001 that China welcomes the U.S. presence in the Eastern Pacific as a stabilizing factor. China's rise need not affect the U.S. position except if American preoccupations elsewhere essentially force the United States to play a passive role in the emerging Asian order.
In any case, China will continue to be China whatever the United States does or does not do. This fact should guide the U.S. policy in coming to grips with the implications of an ascending China. This requires U.S. engagement and statecraft and realization that power is shifting eastward. The Chinese national anthem is "The East is Red." The United States must be prepared to play a strategic role in guiding this historic development in ways conducive to the promotion of U.S. national interests.