| |
 Part 1: Dragon
seizes market share
By Macabe Keliher
BEIJING -
When China signed a free-trade agreement with the
Association of Southeast Asian Nations (ASEAN) in 2002,
it was viewed as a threat not only to US economic
interests, but also to the political balance in the
region. Even though Chinese foreign minister Tang Jiaxuan
had told US Secretary of State
Colin Powell that China had no desire to "push the US
out of Asia", the United States quickly countered with
the Enterprise of ASEAN Initiative, a plan to offer
bilateral free-trade agreements to Southeast Asian
countries.
"Once agreements between ASEAN
members and the US are completed, they will be worth
more than the deals with China," US Trade Representative
Robert Zoellick was quoted as saying at the ASEAN summit
last October in Bali.
While Zoellick's remarks
have been understood as taunting, if not just snobbish,
they do characterize a fear of what many governments and
China watchers see as the ominous rise of China, both
economically and politically. In the past few years,
China has emerged from its hole of non-intervention and
cast off its hermit rags to become directly involved in
multilateral economic and security organizations,
significantly increasing its political clout in the
region. At times this has dovetailed with the United
States and its interests, but at other times it has come
at the expense of the world superpower.
While
such a trend toward economic, political and strategic
reassertion is most rationally viewed as a natural
development for a country the size of China with an
economy growing at such phenomenal rates (9.1 percent in
2003), it is also argued by some that something more
sinister is in the works - namely that China is
consciously seeking not only to undermine US interests
in the region but also to redefine the roles of global
hegemony completely.
China's political and
economic involvement in the region has grown
tremendously over the past few years. China accounts for
more than half of the total Asian trade today (in 1999
it accounted for only 11 percent), and it bought almost
half of the region's exports last year (in 1990 it
bought only 6.8 percent). In 2002, China ratified the
agreement aiming to turn all of China and Southeast Asia
into a free-trade zone, which, according to Chinese
Premier Wen Jiabao, will have a total population of more
than 2 billion and a collective gross domestic product
(GDP) of US$3 trillion by 2010 when the agreement goes
into full effect.
Already Wen has said he hopes
to reach two-way China-ASEAN trade of $100 billion by
2005 - it was $57 billion in 2001, when the deal was
made, challenging US two-way trade with ASEAN of a
similar amount. It is thus no surprise today to find
Beijing full of talk about "regional economic
integration".
Low-interest loans, big aid
packages
Cash is also helping China's cause in
those countries from which it does not import. Vietnam,
for instance, which counts China as its second-largest
trading partner but ran a trade deficit over $1.5
billion last year with China, received a low-interest
loan from Beijing of $126 million in March. Likewise,
Cambodia, which runs a $243.67 million trade deficit
with China, got its debt of $200 million canceled and
received a low-interest loan of $125 million in 2002.
Last year it received a military aid package of $2.4
million. Myanmar and Indonesia have also received
hundred-million-dollar aid packages.
Such
economic and financial prowess and muscle have led
directly to a larger political role, mainly through
China's involvement in multilateral organizations such
as ASEAN, Asia-Pacific Economic Cooperation (APEC), and
a host of other security groups such as the Shanghai
Cooperation Organization. In November 2002, for example,
China signed four agreements with ASEAN, including
security, and economic and agricultural cooperation
agreements, and in 2003 became the first non-ASEAN
country to accede to ASEAN's Treaty of Amity and
Cooperation, confirming China's commitment to the group
- a move unprecedented for a country with a long
reputation of non-involvement.
"With its level
of economic growth, China can no long longer afford to
be a hermit," says Jonathan Anderson, China economist at
UBS in Hong Kong. "China is parlaying its economic
importance into political weight."
This benign
engagement and direct economic participation are not
common for China, and in fact did not begin until about
2000. The hosting of the APEC summit in Shanghai in
2001, and the attention Chinese President Hu Jintao's
speech garnered at the APEC summit in Bangkok last
October, were the most obvious signs of what George
Washington University China Policy Program director
David Shambaugh says is "China rapidly returning to its
traditional role as the central actor in Asia".
The Chinese Foreign Ministry's official line on
this about-face on active engagement is that "the 1997
financial crisis brought us together". Pushing beyond
that, one official close to the foreign minister says it
was around that time that China "began advocating all
countries involved should put aside disputes and develop
the region". China did at that time move from being
suspicious of multilateral organizations to
participating in and even forming them. After observing
regional multilateral groups for a few years after the
Asian financial crisis, China decided that they were not
US-controlled - in fact, Beijing discovered that ASEAN
states' security ideas were compatible with China's own
"New Security Concept" laid out in 1997. By 1999-2000
China was involved and participating in the region's
multilateral organizations.
Concurrent with
these developments were intense internal debates in
Beijing about the decline of the United States and
China's role in the region. Chinese leader Deng Xiaoping
had laid out an economic plan that needed the
environment of peace and stability for Chinese
prosperity, but also folded into this view was the
decline of the US and its influences. After the North
Atlantic Treaty Organization (NATO) bombing of the
Chinese Embassy in Belgrade in May 1999 during the
Kosovo campaign, it became clear that the United States
was not on its way out and that China could not just
wait on the sidelines and jump in as the US fell and
opportunity knocked on Beijing's door. "It was
concluded," says Shambaugh of George Washington
University, "that in order to have a peaceful
environment conducive to domestic development, China
needed to be more proactive in shaping its regional
environment."
China's grand strategy - Asian
tributary states
Whether China has dropped the
illusion of the US in decline remains in debate, in both
Washington and Beijing. "China is driven by a grand
strategy, in which it is continually looking for ways to
undermine the US," says Ross H Munro, director of Asian
studies at the Center for Security Studies in
Washington, DC. Munro believes that China's rise as an
economic and political power is a calculated effort to
"create a modern version of the [ancient] Tributary
State System - unchallenged Chinese domination of all of
East Asia".
Economically, it is true, China is
gaining at the expense of the United States. China has
replaced the US as the largest export market for much of
Asia. For example, almost all of the export growth in
Taiwan, the Philippines, Japan, South Korea, Malaysia
and Australia last year came from Chinese demand. "The
US is still a much bigger market for Asia, but in 10
years China will be close," says Anderson at UBS.
Chinese opposition to the US in Asia has
appeared militarily in recent years, to be sure. The
spy-plane incident in the South China Sea in April 2001
and a naval challenge to the USS Kitty Hawk in
international waters in the Yellow Sea are examples. And
the missile buildup and military exercises on the coast
opposite Taiwan do not present the view of a benevolent
China. In fact, editorials and commentators in China
frequently espouse such anti-US views, especially within
the military. The Liberation Army Daily, for example,
ran an article in early 2002 stating that "hegemonism
and power politics will still be the source of
turbulence and instability in the world" and saying,
"Establishing a new international order will be the
focus of international relations."
US Pacific
Rim allies such as Taiwan and the Philippines also view
China's recent cozying-up with a bit of suspicion. While
the rest of Asia was praising China for reaching
expedient deals on border disputes and free-trade
agreements at recent ASEAN summits, Philippine diplomats
warned about the sincerity of the deals, and Philippine
President Gloria Macapagal-Arroyo cautioned about
China's economic force while welcoming the US-proposed
free-trade agreement. Similarly, many Taiwanese have
long mistrusted China's moves and stated intention -
many term it aggression - to annex or "reclaim" the
island, and they have recently made an international
issue of the 500 ballistic missiles Beijing has aimed at
Taiwan.
Japan also remains cautious. "If China's
objective is economic prosperity then it is no problem
to Japan. But if this is a means to military hegemony,
then there is a problem," says Tomohide Murai, chairman
of the program of international relations at the
National Defense Academy in Tokyo.
Economic
clout makes political clout inevitable
Anderson
at UBS sees China's growing political clout as
inevitable, as its economy expands and it takes on
larger responsibilities. But he says it is by no means a
strategic or antagonizing role. "As China's influence in
the region rises, other players naturally see a relative
decline in their own political standing there," Anderson
says.
The region has in fact welcomed China's
new position, accepting it as a gradual adjustment of
roles. For example, former Malaysian prime minister
Mahathir Mohamad spoke favorably of China in an address
at the World Chinese Entrepreneurs Convention last
autumn in Malaysia. And a poll last December among Thais
showed that 76 percent viewed China as their closest
friend and ally, whereas only 9 percent saw the US as
their closest ally and friend - an almost complete
reversal from years past when China was seen as a
provocateur and a threat.
With the US and its
China watchers on edge about China's rise, such
disparaging views among the Eastern and Western
hemispheres may amount to what M D Nalapat, who holds
the United Nations Educational, Scientific, and Cultural
Organization (UNESCO) Peace Chair, likens to "two trains
heading directly towards each other".
"There
will be a conflict between the US and China. The only
question is whether it will be a hot one or a cold one,"
Nalapat predicts - a battle not between cultures but
over real interests.
Yes, China is becoming an
economic engine and leveraging its political power; it
is entering the comity of nations and behaving
responsibly, not only in its own interests. But Beijing
is also exercising its new-found power. China aims to
increase its economic and political market share, as
does any country in the modern world.
"There is
no grand strategy, only realism," says Wu Yu-shan,
professor of political science at National Taiwan
University. "If the US comes into conflict with China as
a rising power in this part of the world, it will be
over its own national interests."
(Copyright
2004 Asia Times Online Co, Ltd. All rights reserved.
Please contact content@atimes.com for
information on our sales and syndication policies.)
|
| |
|
|
 |
|
