China's Rise and its Impact on Asia

free thinker · #1 Sunday, May 21, 2006

China's Rise and its Impact on Asia

Rukmani Gupta
Research Officer, IPCS
21 February 2006

Introductory remarks:

Major General Dipankar Banerjee (Retd), Director of the institute of Peace and Conflict Studies, welcomed the Speaker and expressed his delight that the Annual Lecture for 2005 will be delivered by Prof Yu Xintian, President of the Shanghai Institute of International Studies in honour of the India-China Friendship Year (2006). As appropriate to the occasion, the Director presented a brief annual report of the Institute.

Eric Gonsalves
Former Secretary, Ministry of External Affairs, Government of India

The 21st century is widely believed to be the Asian century. A few decades ago this was in reference to the tigers of South East Asia, today however, the term 'Asian Century' cannot but refer to China as the fastest growing state in the region and along with it a resurgent India . Asia has to come together to foster peace and development not in the region alone but in the world.

Yu Xintian
President, Shanghai Institute of International Studies

Before beginning the discussion, a brief background of the Shanghai Institute is required. Established in 1960 by the then Premier Zhou Enlai, the SIIS is a government think tank but has full autonomy as far as the research agenda is concerned.

A discussion of China's peaceful rise can be undertaken in three parts. The first refers to the new trends in world economy and the new role China has to play in it. The second refers to the challenges and opportunities provided by globalization. The third would be the demise of concepts such as East and West or North and South used to explain the emerging global phenomenon.

The last decade has been characterized by economic resurgence. India is looked up to as far as economic growth is concerned. Russia is successfully battling economic depression while East Asia has weathered the economic crises favourably and Japan has come out of recession. China has seen economic growth along with others. It is riding the Asian boom but is at the same time keen to develop relations with its neighbours.

In the last five years over 50 per cent of FDI in China has come from East Asia or overseas Chinese, as has 70 per cent of technological input. Thus it is clear that China's rise is part of the rise of Asia as a whole. Different countries have different concerns over China's rise. Japan is threatened by the idea that China will compete with it for regional dominance. Japan is in a higher stage of development than China. Its GDP per capita is 37 times larger and its economic dominance over East Asia and the world far exceeds China's. Japan's fears then can only be explained by its lack of self-confidence. China and Japan have a relationship that is more complementary than competitive. The elites in both states want cooperation of the kind that France and Germany enjoy in the EU.

The United States is concerned about China's growth because it fears that as China becomes stronger economically, it will exclude the US from East Asia. This is a fear that is unfounded for East Asian cooperation is open, as is signified by its unprecedented cooperation with the United States.

The European Union is concerned over Human Rights, environmental issues and labour reforms but the EU and China have similar ideas of development and peace at the global level.

As far as ASEAN is concerned, there is greater understanding between China and ASEAN. In 2004, ASEAN's trade surplus with China exceeded $ 40 billion. A free trade zone is to be established between ASEAN and China by 2010 and is expected to accelerate East Asian economic development. China fully supports the ASEAN for Southeast Asia is important both geopolitically and geo-economically. Major states within the ASEAN are suspicious of each other and prefer the body to exercise collective influence over middle ranking states. ASEAN has also worked well to facilitate cooperation, coordination and collaboration between great powers in the region. China's economic growth gives an impetus to world economic growth and China is eager to continue cooperating in the East Asian economy.

Since the end of the Cold War all nations have had to face new security threats. The emergence of these and their impact on China will go a long way in understanding security issues. Motivations for conflict and war have changed and can be divided into four categories - civil war, state to state war, war of intervention and conflict caused by non-traditional threats such as terrorism. The first two categories of war take place primarily in developing countries and include economic and ethnic factors. Economic globalization has boosted economic cooperation on one hand and disparities on the other. As a result disadvantaged groups that are desperate and dangerous, often become hotbeds of extremism. Wars of intervention are of two types - those that are based on consensus reached in regional organisations to preserve peace and those that are unilateral, undertaken by a nation that is not challenged.

Future trends as far as security issues are concerned suggest the following:

A World War will not break out in the foreseeable future.

The soft borders of Eurasia on the periphery will be most visited by
security threats.

Non traditional security threats will increase.

Cooperation between states will grow, but so will contradictions.

As far as these models of conflict and China are concerned, many scenarios exist. Internal instability exists but the government is very much capable of containing the situation. China's collapse thus should not be expected. China is affected by non-traditional security threats such as the East Asian financial crisis, SARS, AIDS; environmental pollution among others. Its ability to tackle these is indeed weak. The likelihood of external intervention in China is slight. Relations between China and the US are improving. The US has adjusted its security scenario by prioritizing Homeland Security and WMD proliferation. The Strategic dialogue between China and the US is not limited to bilateral issues but includes regional and global issues. There thus exist overlapping concerns. Intervention over Taiwan is improbable. In recent years the US has come to realise the dangers of the Taiwan Independence Movement. It has reiterated the one China principle repeatedly. Being the sole superpower is one thing but intervening in China quite another. A US already suffering in Iraq would find the costs for intervention in China unbearable. China's rise is not affected by US policy. The rise and fall of nations is a factor of their own strengths and weaknesses. Lastly, the prospect of conflict between China and its neighbours is most unlikely, close to nil.

The scenarios for conflict in China thus can be categorised according to diminishing likelihood from non-traditional security threats to internal instability and then external intervention and conflict with neighbours.

There are seven trends in Chinese Foreign Policy till 2020. Firstly, China will continue to take advantage of opportunities raised by globalization to quicken the pace of integrating the domestic and world markets. While doing this, China will continuously attempt to minimize challenges. The Chinese government underlines that opportunities brought about by globalization are conducive to world peace and cooperation. This is a remarkable viewpoint for a government to maintain. Secondly, the Chinese government and elites have realised over the last year that China has to care not only about the impact that the outside world has on it but be careful of the impact that China can have on the world as well.

Thirdly, a new security concept and policy has evolved. The new security concept is based on mutual trust, mutual benefit and cooperation. The New policy is one that encourages participation in multilateral cooperation and multilateral forums. An example of this would be China's role in the Six Party Talks and its participation in the Shanghai Cooperation Organisation. Fourthly, China's foreign policy with its neighbours is deemed important because of its influence in East Asia but also because China has to learn through cooperating with its neighbours how to be a regional and global actor and a great power.

Fifthly, China's foreign policy will emphasise relations with existing great power and attempt to further improve relations. Sixthly, China's role in multilateral cooperation will increase and it will support developing countries to maintain their justified interests. Seventhly, China will continue to develop its soft power and emphasize the values of Chinese culture while coexisting and sharing progress with all other cultures.

Finally, as its economic power rises, the question emerges as to how this power will be employed, oriented, develop and the role that China will play in world affairs. This is what constitutes the new theory of China's peaceful development road.

The Taiwan issue is one that is significant both in China's security and foreign policy. One China peaceful unification refers to peaceful cross-straits unification and is one of the paths of the peaceful development road. Chinese foreign policy takes full measures to contain the Taiwan Independence Movement. China attempts to cooperate with countries like the United States to develop a consensus over peaceful unification. As the same time, China has recently passed the Anti-Secession Law that contains not only the Taiwan Independence Movement but constrains China's behaviour on the Taiwan issue as well, for the law specifies precisely when China can use force. The Chinese government has followed a more flexible and free policy to win the hearts of the Taiwanese. Numerous economic arrangements have been made to this end. At the same time, China appreciates the value of military modernisation in providing effective deterrence to the Taiwan Independence movement.

As far as Sino-Indian relations are concerned, China recognises India as a rising great power and an important neighbour for India is the second largest developing economy. Both India and China have joined the same multilateral forums from the UN and WTO to ASEAN. India is now an observer in the SCO while China has observer status in the SAARC. It is thus expected that 2006 as the year of friendship between the two states will deepen cooperation and the two will work together for the future of the world.

Discussion:

Question: China's economy is certainly on the upswing but the fact remains that apprehensions regarding Japan are not justified. First of all China suffers from the vulnerabilities of a rigid system, the lack of a comprehensive financial system, growing inequities and little political reform. Though economic growth continues, isn't the prospect of social collapse real?

Response: China in the last 25 years has had political reforms in democracy and rule of law. This is exemplified by the recent White Paper on building Political Democracy. While it is true that the financial system has problems but integration into the world economy will definitely help and the government has put financial reform on the agenda. Improvements in the future can be expected. Socio-economic disparities are a concern, however, new welfare policies are being pursued. Great emphasis is being laid on building a harmonious society.

Question: Though Sino-American relations have improved significantly over the last few years, the Pentagon views China's military expansion as more than what is required for purely defensive reasons. It is apprehensive about the process of military modernisation. If the mainland attacks Taiwan, the US will have no choice but to intervene?

Response: As far as Sino-US relations are concerned, heated debate on their state and future has continued over the last 25 years. Observing the relationship it becomes obvious that the US government pursues a realistic policy towards China. The mainstream view is one that encourages cooperation but where there are also some diffferences. The US has come to acknowledge China as a stake-holder in global affairs. It recognises that the PRC is different from the former Soviet Union. This will go a long way in normailizing the relationship. Taiwan is the biggest bone of contention between the US and China. In recent times however, American scholars have begun discussing the possibility of peaceful unification made possible by cross-straits integration. With patience and confidence, the goal of peaceful unification will certainly be achieved.

Question: With the Maoist movement in Nepal and China's growing influence in the country, is there reason for India to be apprehensive?

Response: China watches the developments in Nepal quite closely. The Maoist movement in Nepal is not related to China in any way. This issue provides a context for cooperation, India and China should share their views on the issue.

Question: Condolezza Rice de-linked Pakistan and India in US foreign policy, can such a declaration be expected from Beijing as well, especially in the wake of the Indo-US nuclear deal?

Response: China has welcomed the improving relations between Pakistan and India. China, just like the US, pursues a balanced policy especially today. The nuclear issue is one that is complicated and requires much dialogue and time.

Concluding Remarks: Eric Gonsalves

It is hoped that cooperation between India and China continues to grow, for it is indeed important for peace and prosperity in Asia as a whole.