When China Rules the World

In the early nineties books about China were relatively few and far between. The story was still, for the most part, the Asian tigers, and most Western writers seemed to park themselves in Hong Kong and Singapore and view China and the region through that prism. My first visits to the region followed a similar pattern: both island-states always seemed to be on my itinerary, partly because they provided a ready-made network of contacts and partly because English was widely spoken. Given this cultural baggage, it is not surprising that China was generally seen in derivative terms: it was all a question of when and to what extent China would become infected with the Hong Kong bug. When Hong Kong was finally returned to China in 1997, the British, self-congratulatory almost to a person, were deeply sceptical as to whether the territory would thrive in the way that it had under the British; predictably they believed that China ’s future hung on the extent to which it became like Hong Kong. In this view, China ’s prospects depended on learning from everyone else, with the recommended direction of wisdom invariably proceeding from the outside inwards rather than from within outwards. This contained a kernel of truth: the transformation of the region had, indeed, begun outside China. The role and importance of Hong Kong and Singapore in this wider process, however, is a moot point; far more significant were Japan, South Korea and Taiwan, all of which looked far less like, and owed much less to, the West than these micro-states.

In fact, this mindset was deeply patronizing towards China. It suggested that China was an empty vessel that needed filling up with Western ideas and know-how. Certainly China had much to learn from the West, but its subsequent transformation has been more home-grown than Western import. In fact, if China ’s growth in the 1980s had relied heavily on the resources and knowledge of Hong Kong and Taiwanese entrepreneurs, by the nineties the direction of influence was in the process of being reversed, with the Middle Kingdom once more becoming the centre of influence, power and wealth. A map of East Asia in the eighties might reasonably have had the lines of influence and capital running from a miscellany of Hong Kong, Taiwan and the overseas Chinese into China itself. Now it is the opposite. The hubs no longer lie around China ’s borders but are congregated within.

While Hong Kong is still recognizably Hong Kong, economically it has been remade by China, the size of its stock exchange now comfortably surpassed by Shanghai ’s. Who now would choose to go to Hong Kong when you can find the real thing in Beijing or Shanghai? For more than a decade Taiwan has needed China more than China has needed Taiwan, with its economy suffering increasingly from its relative isolation from China. Meanwhile the reversal of the lines of causation between China on one hand and Hong Kong and Taiwan on the other are being repeated on a far grander scale across the region. Everywhere the magnet is China. Where previously the story was outside China, now all roads lead to China. China ’s growth and dynamism are spilling over its borders, infecting countless other countries far and wide, from Laos and Cambodia [854] to South Korea and Japan, from Indonesia and Malaysia to the Philippines and even Australia. East Asia is being reconfigured by China ’s rise. The agenda of the region is being set in Beijing.

The rise of China is best seen not from the vantage point of the United States or Europe, or for that matter Africa or Latin America, but East Asia. It is in China ’s own backyard that the reverberations of its rise are already being felt most dramatically and in the most far-reaching ways. If we want to understand China ’s rise, and what it might mean for the world, then this should be our starting point. The way in which China handles its rise and exercises its growing power in the East Asian region will be a very important indicator of how it is likely to behave as a global power. [855]

It is difficult to achieve the status of a global power without first becoming the dominant power in one’s own region. Britain is unusual in this respect: it acquired global hegemony in the nineteenth century even though it didn’t succeed in achieving a decisive pre-eminence in Europe. In contrast, the United States, confronted with no serious rivals, achieved overwhelming dominance in the Americas prior to becoming a global superpower in the second half of the twentieth century. China faces a far more formidable task in seeking to become the premier power in East Asia. The region accounts for one-third of the world’s population and China has to contend with two rivals, namely Japan and the United States, which stand in the way of its ambitions. Japan is the most advanced as well as largest (as measured by GDP according to exchange rates) economy in the region, while the United States, by virtue of its military alliances, bases and especially naval presence, remains the most powerful military force in East Asia. Furthermore, China shares borders with Russia to its north and India to its south-west, both of which are powerful players. China ’s path to regional pre-eminence will be paved with difficulty and is bound to be a complicated process.

History, however, offers some succour for China ’s ambitions. Until the latter decades of the nineteenth century, China enjoyed overwhelming regional dominance: it was to the Middle Kingdom that all others, in varying degrees — depending on their distance from Beijing — paid homage, acknowledging their status as the Celestial Kingdom ’s inferior. It was a hierarchical system of relations whose tentacles stretched across much of East Asia, with China at its centre. In the tributary system, as it was known, non-Chinese rulers observed the appropriate forms and ceremonies in their contact with the Chinese emperor. Taken together, those practices constituted the tribute system. During the Qing period they included receiving a noble rank in the Qing hierarchy, dating their communications by the Qing calendar, presenting tribute memorials on statutory occasions together with a symbolic gift of local products, performing the kow-tow at the Qing court, receiving imperial gifts in return and being granted certain trading privileges and protection. [856] If a ruler recognized the superiority of Chinese civilization and paid tribute to the emperor, then the emperor generally pursued a policy of non-interference, leaving domestic matters to the local ruler. It was thus an essentially cultural and moral rather than administrative or economic system. The emperor exercised few coercive powers but maintained control for the most part symbolically. The fact that Chinese hegemony was exercised in such a light and relatively superficial way enabled it to be maintained over a huge and very diverse population for long periods of time. The tributary system was far from universal, but Korea, part of Japan, Vietnam and Myanmar all paid tributes to China, while a large number of South-East Asian states, including Malacca and Thailand, either paid tribute or acknowledged Chinese suzerainty. Those countries that were closer to China in terms of geography and culture were considered to be more equal than those that were not. So, for example, China was considered the big brother, Korea a middle brother and Japan a younger brother.

Given the extent of the system, the diversity of the countries and cultures embraced, and the vast time-period involved, it would be wrong to conceive of the tributary system as uniform or monolithic. Varying from country to country and from dynasty to dynasty, [857] the Chinese world order might appropriately be described, in the Chinese historian William A. Callahan’s words, as ‘one civilization, many systems’. [858] Although they shared things in common, the tributary system worked very differently, for example, for Japan and Korea, with Japan enjoying much greater autonomy from China than Korea, and from time to time even rebelling against the tributary system. No doubt this partly explains why later Japan was able to display such remarkable independence of action in the aftermath of the Meiji Restoration, with its rejection of the Sinocentric world and its turn to the West. [859] Perhaps it also helps to explain South Korea ’s recent turn towards China. Notwithstanding these variations, however, the common thread running through the tributary system was an acceptance of China ’s cultural superiority. This was the reason why the acceding states voluntarily acquiesced in an arrangement which they regarded to be in their interests as well as the Middle Kingdom’s. [860] The relative stability of the tributary system over such a long historical period was partly a function of its flexibility but, above all, because China was overwhelmingly dominant within it: inequality, in other words, served to promote order. [861] From the second half of the nineteenth century, with the growing power of the European nations and the decline of China, the European-conceived Westphalian system, together with its colonial subsystem, steadily replaced the tributary system as the organizing principle of interstate relations in the region, or, more accurately, perhaps, was superimposed upon the existing system. [862]

Given that it constituted the regional system in East Asia for more than 2,500 years, the tributary system remains deeply embedded in the historical memory of the region. Most countries in East Asia had some experience of it, often as recently as a century ago, and certainly not more than a century and a half ago. Even as it began to break down towards the end of the century, elements of the tributary system continued to survive until well into the twentieth century. While it seems inconceivable that any future Chinese hegemony in East Asia could take the form of the old tributary system, it is certainly reasonable to entertain the idea that it could bear at least some of its traces. There is still an overwhelming assumption on the part of the Chinese that their natural position lies at the epicentre of East Asia, that their civilization has no equals in the region, and that their rightful position, as bestowed by history, will at some point be restored in the future. China still frequently refers to its Asian neighbours as ‘periphery countries’, suggesting that old ways of thinking have not changed as much as one might expect. [863] Former habits and attitudes have a strange way of reasserting themselves in new contexts. It would not be entirely surprising, therefore, if elements of the old tribute system were to find renewed expression as China once again emerges as the dominant centre of the East Asian economy. [864]

We are, thus, confronted with a number of intriguing questions. Will China regain its regional pre-eminence? How long is that likely to take? How might it be achieved? What might that regional pre-eminence look like, what forms will it take, and to what extent might it bear strong echoes of the past?

CHINA’S NEW TURN

At the beginning of the 1990s China, with the reform era already a decade old, still existed for the most part in a state of splendid isolation, a condition that it had inherited from the Maoist era. The suppression of the Tiananmen Square demonstration exacerbated this state of affairs, leading to China ’s estrangement by the West and its condemnation by Japan. [865] Throughout the nineties, China steadfastly refused to countenance being a party to any regional multilateral arrangements, [866] fearing that it would be obliged to play second-fiddle to Japan, aware that the United States was strongly opposed to regional organizations from which it was likely to be excluded [867] and, not least, still imbued with that traditional regional aloofness born of its pervasive sense of superiority. It was only in the early 1990s that China had established diplomatic relations with South Korea, Singapore, Indonesia, Vietnam and Brunei. [868] By the end of the decade, however, China had determined on a very different strategy, one that it was to implement with breathtaking speed.

Already, in 1994, it had established the Shanghai Five with Russia, Kazakhstan, Kyrgyzstan and Tajikistan in response to the collapse of the Soviet Union in Central Asia and a desire to engage with Russia and foster co operation on its traditionally troublesome north-western border. It was not until 2001, however, with the formal establishment of the Shanghai Co-operation Organization (SCO), that this was to be translated into something more thorough-going, with a permanent office in Shanghai, the addition of Uzbekistan and the acquisition of new and more extensive functions. [869] The purpose of the SCO would appear to be threefold: to promote cooperation in Central Asia, to counter Islamic extremism and to resist American influence in the region. Over the subsequent years, India, Iran, Pakistan, Mongolia and Afghanistan have acquired observer status, while representatives are also invited from ASEAN and the CIS (composed of the former Soviet Republics). SCO’s future is difficult to assess but it certainly represents a powerful bloc of Central Asian countries and, significantly, remains outside the aegis of American influence. The heart of China ’s new strategy, though, lay not to its north-west but to its south-east, a region towards which, in comparison, China had for centuries displayed for the most part benign neglect and traditional indifference. It is no exaggeration to suggest that the fulcrum of China ’s strategy in East Asia — certainly as it has evolved over the last decade — came to hinge on a volte-face in its attitude towards ASEAN, the organization of the ten nations of South-East Asia that was formed in 1967. [870]

How do we explain China ’s belated embrace of multilateralism? First and foremost, its dramatic economic growth after 1978 generated a growing sense of self-confidence and enabled the country to entertain new and more ambitious perspectives. Second, by the turn of the century China was on the verge of membership of the World Trade Organization, thereby marking its entry into the global international system and signalling its global acceptance of multilateralism. Third, China felt increasingly comfortable about its position in the region and confident that it would not be required to play the role of subordinate to Japan. Finally, as a consequence of the Asian financial crisis in 1997-8, which ravaged the economies of South-East Asia (and South Korea), China found itself thrown into an increasingly close relationship with them. As they struggled to emerge from the effects of the crisis, now rudely aware — after a long period of spectacular economic growth — of their vulnerability to global volatility and bruised by the damaging effects of the US and IMF-imposed solutions to the crisis, the ASEA N countries began to see China in a new light. [871] From being a rival to be feared, its motives always the subject of suspicion, China increasingly came to be seen as a friend and partner, primarily because it refrained from devaluing the renminbi, a move which would have inflicted even further pain on their economies, together with its willingness to extend aid and interest-free loans during the crisis. [872] The Malaysian prime minister Mahathir Mohamad remarked in 1999: ‘Chi na’s performance in the Asian financial crisis has been laudable, and the countries in this region… greatly appreciated China ’s decision not to devalue the yuan [renminbi]. China ’s cooperation and high sense of responsibility has spared the region a much worse consequence.’ [873]

A decade earlier a rapprochement between ASEAN and China would have been inconceivable; now it had a certain air of inevitability. But it required, on the part of the Chinese, a leap of imagination, a new kind of mindset, a willingness to abandon old ways of thinking, and a boldness that had previously characterized their economic reform programme, though not their conduct of regional relations.

What was surprising was not simply that China was suddenly prepared to embrace multilateralism in the region but also the manner in which it did so. This, after all, was the country that down the ages, from Tang to Mao, had regarded its neighbours with a sense of superiority and indifference: China did not need its neighbours, but they needed it. Yet China was prepared to engage with ASEAN, an organization composed — broadly speaking — of the weakest nations in East Asia, and to do so on its terms rather than China ’s. China ’s approach, in other words, was informed by a new and unfamiliar humility. Historically, North-East Asia, home to old and powerful civilizations like Japan and Korea as well as China, has been overwhelmingly predominant over the much less developed South-East Asia, where a lower level of economic development, ethnic diversity and a weak sense of nationhood have long been manifest. [874] There was now a remarkable inversion, at least in terms of diplomacy, of this traditional state of affairs.

From the ASEAN perspective, the origins of the new rapprochement lay in two initiatives. The first was the decision taken in 1992 to establish AFTA — the ASEAN Free Trade Area — which required the ten member states to remove all barriers to free trade by 2010. [875] The second was a call made by Mahathir Mohamed in 1990 that East Asia should establish an East Asian Economic Group, later termed the East Asian Economic Caucus, as a means of offsetting the negative effects of the Western-dominated international economic order. [876] The proposal was supported by ASEAN but opposed by Japan, and it was only after the Asian financial crisis that it gained serious momentum. Mahathir’s initiative stemmed from his conviction that membership of East Asian bodies should be confined to countries within the region and his antipathy to APEC (Asia-Pacific Economic Cooperation), which included non-Asian members like the US and Australia. In fact Mahathir’s position prefigured what was to become an increasingly important fault line within the region — the exclusion or inclusion of the United States — with Japan always favouring inclusion and China, sotto voce, tending to favour — though not always — exclusion.

The shift in China ’s approach took place between 1997 and 2001. [877] At a China-ASEAN summit in 2001 — known as ASEAN+1 (i.e., China) — China proposed the creation of a China-ASEAN free trade area to be established by 2010 (initial discussions had begun in 1999). [878] The ASEAN-China Free Trade Area, or ACFTA as it became known, was an extraordinarily bold proposal to create a market of almost 2 billion people, thereby making it by far the largest free trade area in the world. [879] The ASEAN countries had become increasingly nervous about the effect China ’s growing economic power might have on their own exports and also their inward foreign investment: its proposal for a free trade area helped reassure them that China would not pursue economic growth regardless of the consequences for others. At the ASEAN-China summit in 2003, China formally acceded to ASEAN’s Treaty of Amity and Cooperation — which committed China to the core elements of ASEAN’s 1967 Charter — the first non-ASEAN country to do so (India has since followed). In 2002 it also signed the Declaration on the Conduct of Parties in the South China Sea, which rejected the use of force in resolving the disputes over the Spratly and Paracel islands. [880] These had been a serious and continuing source of tension between China on the one hand and Vietnam, Taiwan, the Philippines, Malaysia and Brunei on the other, culminating in military conflict with Vietnam [881] and the Philippines. [882] The agreements between ASEAN and China were to have a major impact on the political dynamics of East Asia. Prior to them Japan, which had long been the major external player in the South-East Asian economies, had resisted entering into regional trade agreements, preferring instead to operate by means of bilateral agreements. Japan now suddenly found itself on the back foot, outmanoeuvred by China ’s bold diplomacy, and ever since it has been running to catch up. [883]

Already, in 1997, during the Asian financial crisis, there had been the first ASEAN+3 summit (China, Japan and South Korea) and this was later formalized into a regular event. At the ASEAN+3 summit in 2003, the Chinese premier Wen Jiabao proposed that a study be made into the feasibility of an East Asian Free Trade Area, which was accepted. [884] Following China ’s lead, in 2005 Japan started to negotiate its own Free Trade Agreement with ASEAN, which was agreed upon in outline form in 2007. In 2009 Australia and New Zealand did likewise. There is now a complex web of Free Trade Agreements in the process of negotiation in East Asia which is intended to act ultimately as the basic infrastructure of a wider East Asian Free Trade Agreement, designed to be in place around 2007 and implemented before 2020. [885] Whether this ever materializes, of course, is another question, but the progress towards a lowering of tariffs in the region — with China in the driving seat — stands in marked contrast to the effective demise of the WTO Doha round, a point lost on neither ASEAN nor the rest of East Asia. [886]

ASEAN lies at the core of the new East Asian arrangements and has provided them with their template. Although South-East Asia has always been the poor relation in the region (in 1999, for example, the GDP of the North- East Asian economy was more than nine times that of ASEAN), [887] it would have been impossible for North-East Asia to have played the same role because the latter remains too divided, riven by the animosity between Japan and China, and to a lesser extent that between South Korea and Japan, as well as distracted by the disputes over Taiwan and the Korean Peninsula. As a result there is nothing like ASEAN in North-East Asia: such formal multilateral arrangements are almost completely absent. An important consequence of these various developments has been the effective exclusion of the United States from economic diplomacy in the region. This has never been China ’s stated aim, [888] but, intended or otherwise, it is what has happened in practice. The centrality that APEC enjoyed in the mid nineties, and in which the US was a key player, [889] now seems a distant memory. The marginalization of the US is also manifest in the Chiang Mai Initiative, first agreed in 2000 on the proposal of the Chinese, [890] which involves bilateral currency swap arrangements between the ASEAN countries, China, Japan and South Korea, thereby enabling East Asian countries to support a regional currency that finds itself under attack. The agreement was a direct product of the Japanese proposal for an Asian Monetary Fund during the Asian financial crisis, [891] which was strongly opposed at the time by both the United States (on the grounds that it would undermine the IMF) and China (because it came from Japan). China has since swallowed its opposition — no doubt in large part due to the strengthening position of the renminbi — while the United States, weakened by the IMF debacle in the Asian financial crisis, has not resisted. [892]

If ASEAN has provided the canvas, it is the diplomatic involvement and initiative of China that has actually redrawn the East Asian landscape. In effect, China has been searching out ways in which it might emerge as the regional leader. [893] Underpinning its growing influence has been the transformation in its economic power. This has been the real driver of change in East Asia, the force that is reconfiguring the region. Unlike the European Union, where economic integration followed politics, in East Asia economics has been the dynamo of change, with political change following in its wake. [894] In North-East Asia, intra-regional trade — even in the absence of formally binding agreements — now accounts for 52 per cent of the total trade of the five economies (China, Japan, Taiwan and the two Koreas), a situation that has been achieved in little more than a decade; the equivalent figure for the European Union is 60 per cent, which it took half a century to reach. [895] Between 1991 and 2001, world trade increased by 177 per cent, whereas intra-regional trade in East Asia, despite the Asian financial crisis, increased by a staggering 304 per cent. By far the most important reason has been the growth of China, whose share in intra-regional trade almost doubled between 1990 and 2002. [896] With the emergence of the first Asian tigers in the early sixties, followed by the later examples, including China itself, the East Asian economy used to be seen in terms of ‘flying geese’, with Japan in the lead and the others flying in formation behind. [897] But with China ’s economic rise during the 1990s, Japan ’s role as the most important economy in the region is rapidly being challenged by China. Between 1980 and 2002, while China’s share of East Asian exports increased from 6 per cent to 25 per cent, Japan’s fell from 50 per cent to below 30 per cent; similarly, while China’s share of East Asian imports over the same period increased from 8 per cent to 21 per cent, Japan’s fell from 48 per cent to 27 per cent. [898] Even at the peak of its economic power, Japan’s role was always limited by the fact that it steadfastly refused to open up its economy to exports from its neighbours (other than those from its own foreign subsidiaries) — or, indeed, to the rest of the world — so its influence was largely exercised by a combination of its own foreign direct investment in Japanese overseas subsidiaries, imports from those Japanese subsidiaries and Japanese exports to the region. In contrast China ’s influence, because it has chosen to have an extremely open economy, is far more multifarious — as a market for the products of the region, as an exporter and as a multifaceted investor.

Figure 24. Growing importance of Chinese market.

Zhang Yunling, one of the architects of China ’s new strategy, and Tang Shiping have described the aim as: ‘to make China a locomotive for regional growth by serving as a market for regional states and a provider of investment and technology’. [899] The most obvious expression of this has been the way in which, in less than a decade, China has become one of — if not the — most important market for many countries in the region: in a few years’ time, it seems likely that it will be the single largest market for every country in the region. For the ASEAN countries, the Chinese market is now three times the size of Japan ’s. [900] No country — not even Japan, whose trade with China has recently overtaken that with the United States — can afford to ignore the Chinese market, or, as a consequence, China. [901] Since 200 °China ’s imports from ASEAN have increased at an annual rate of 30–40 per cent. [902] China, for example, accounted for 13.2 per cent of Singapore ’s exports in 2001, compared with 2.5 per cent in 1993, 18.5 per cent of South Korea ’s exports in 2001, compared with 6 per cent in 1993, and 9.2 per cent of Australia ’s exports in 2000, compared with 6 per cent in 1994. [903] It was widely feared in South-East Asia that Chinese imports from the ASEAN countries would be overwhelmingly comprised of raw materials. Certainly these are very significant, a case in point being the huge Chinese demand for timber, which is rapidly stripping the Indonesian forests. [904] The most important single category of ASEAN exports to China, however, is composed of intermediate goods. China is where the final assembly of many products of foreign-owned multinationals (American, European, Japanese, Taiwanese and South Korean) takes place prior to their export to their final destination. Countries like Malaysia and Thailand thus occupy a crucial niche in a complex division of labour centred on China. [905] In addition, China is assuming the role of an increasingly important investor in the region, with a large quantity of investment aimed at the extractive industries and infrastructure like railways, toll roads and refineries, in order to speed the flow of natural resources to the Chinese market. In 2002, 60 per cent of China ’s total foreign direct investment was directed towards Asia, [906] making it by far the most important destination. As a consequence, Chinese investment in South-East Asia has helped to compensate for the decline in Western investment over the last few years.

Zhang Yunling and Tang Shiping have described China ’s regional strategy in the following terms: ‘participate actively, demonstrate restraint, offer reassurance, open markets, foster interdependence, create common interests, and reduce conflict’. [907] With one bold and unexpected stroke, China has succeeded, in the manner of Deng Xiaoping, in redefining the dynamics of the region and, in the process, given itself more space for its own economic development. For sheer courage and unpredictability, China ’s East Asian initiative belongs to the genre of Chinese diplomacy initiated by Mao in the rapprochement with the United States in 1971. Even the intractable problems of North-East Asia are to some extent being redrawn by the ASEAN-BASED Chinese initiative, with both Japan and South Korea now involved in the creation of the East Asian Free Trade Area first proposed by the Chinese premier Wen Jiabao at the 2003 ASEAN+3 summit. It is impossible to predict the outcome of the process — or, more accurately, processes — now under way. They are open-ended and multi-layered, and could yet acquire another dimension, with the involvement of India and perhaps other South Asian countries in the future. [908] It has been suggested that one day there might be a fully-fledged East Asia Economic Union, perhaps even with a common currency, although the latter seems fanciful given the huge economic disparities across the region. [909] Nonetheless, the renminbi is likely to play a growing role in the region, especially if China further eases the restrictions on its use, as is likely over the next five years or so. In that eventuality, and assuming the dollar declines, the renminbi will increasingly be used for trading purposes, other countries in the region will peg their currencies to it, and in time it will surely assume the role of the reserve currency of choice in the region. [910] It is worth noting that in the zones around China’s borders — Myanmar, Mongolia, Laos, Cambodia and Vietnam — the renminbi, though not yet convertible, is already traded freely and used as a de facto reserve currency, sometimes instead of theUSdollar. [911]

Not surprisingly, China ’s rapidly developing economic influence in the region is having wider political and cultural repercussions. [912] Everywhere, in varying degrees, the impact of China can be felt. The willingness of China to foster interdependence, to seek new arrangements, and to take into account the needs and interests of other nations has had an extremely favourable effect on how it is seen in most countries. [913] David Shambaugh, a leading US writer on China, argues: ‘Bilaterally and multilaterally, Beijing ’s diplomacy has been remarkably adept and nuanced, earning praise around the region. As a result, most nations in the region now see China as a good neighbor, a constructive partner, a careful listener, and a non-threatening regional power.’ [914] This process has been enhanced by the stark contrast over the last decade between China ’s whole-hearted embrace of multilateralism and the United States ’ preoccupation with the Middle East combined with its shift towards unilateralism during the Bush administration. China’s overseas aid has risen from around $260 million in 1993 to more than $1.5 billion in 2004 at a time when the US has been reducing its own; as a result, China’s aid to the Philippines is now four times that of the US, double what the US gives to Indonesia, and far outstrips American aid to Laos, Cambodia and Myanmar. [915] China is funding many high-profile projects, including a new presidential palace and foreign ministry building in East Timor and a parliament building in Cambodia. [916] It finances the training of Cambodian and Laotian officials in China as well as receiving a growing number of politicians and dignitaries from the region in China on visitor programmes. [917] It has opened its doors to foreign students, with over 60,000 from East Asia studying for advanced degrees in Chinese universities in 2003-4. [918] There is a growing thirst across the region to learn Mandarin, while Chinese tourists are becoming an increasingly common sight in South-East Asia, greatly outnumbering those from Japan.

SHIFTING SANDS

One of the consequences of China ’s growing economic importance has been that the great majority of countries in the region have become more closely aligned with it. There are only two exceptions to this: Taiwan, at least until recently, and Japan. Even Singapore and the Philippines, two traditionally close allies of the United States, have moved much closer to China. Rather than countries fearing the rise of China and, as a result, choosing to move closer to the United States, the opposite has happened. Nor has there been any sign of an arms race in the region. A senior Singaporean diplomat confidentially offered the view in 2004 that:

The balance of influence is shifting against the United States. In the last decade the Chinese have not done anything wrong in South-East Asia. The Japanese have not done anything right, and the US has been indifferent. So already Thailand, Laos, Cambodia, and other states are defining their national interest as ‘Finlandization’ with respect to China. The US will never be shut out of South-East Asia completely, but there is less room for it now than in the past fifty years. [919]

As the accompanying figures suggest, attitudes in the region have grown more favourable towards China, compared with those towards the US, while China is generally seen as emerging as the new power centre in the region and as likely to become the most important economic partner of most countries. To illustrate the reconfiguration of power in East Asia towards China, I will look at three very different examples, namely Myanmar, Malaysia and South Korea; and then at the remarkable way in which Australia is being drawn into China ’s orbit.

As a former tributary state of the Middle Kingdom, Myanmar has long enjoyed a close relationship with China, but since the late eighties this has become more marked. The growing isolation of Myanmar — especially from and by the West — has served to increase its dependence on China for both trade and security, with the latter now by far its biggest trading partner as well as its largest source of inward investment. The country’s Chinese minority, which has grown considerably in recent years, has played a very important role in this growing economic alignment with China. There is also close military collaboration between the two countries, the only such instance of this in the region (with the partial exception of North Korea). With their long shared border, Myanmar is an important ally for China because it gives its landlocked south-west provinces vital access to the Indian Ocean for their exports while also providing a base for the Chinese navy to operate in the Indian Ocean. For a combination of historical and economic reasons — and because otherwise Myanmar would find itself even more isolated — China’s relationship with Myanmar is, in fact, more intimate than that with any other country in the region. [920]

Figure 25. East Asian attitudes towards China and the United States (% ‘favourable’) Nov 2005.

Figure 26. East Asian perceptions of bilateral relationship with China and the United States (% ‘good’) Nov 2005.

Figure 27. East Asia’s perceptions of Asia’s future power centre (%) Nov 2005.

Figure 28. East Asia’s perceptions of their closest economic partner in 5-10 years (%) Nov 2005.

For geographical reasons, the archipelagic countries of South-East Asia have traditionally enjoyed a more distant relationship with China than those like Myanmar and Vietnam that share the same land mass. [921] Furthermore, the ethnic, cultural and religious differences between China and countries like Malaysia and Indonesia are very pronounced. Malaysia, following its independence in 1957, viewed China with considerable suspicion because of its own large Chinese minority and the fact that the Maoist regime encouraged a guerrilla war, mainly based amongst the local Chinese, against the British and, after independence, against the newly installed Malay-dominated government. With China ’s rapid economic growth during the reform period, together with its turn away from promoting revolutionary change elsewhere, relations steadily improved. Although the two countries were in conflict over the Spratly Islands, the then Malaysian premier Mahathir Mohamed chose to pursue a policy of engagement with China, aware that his country could not win any naval clash. [922] He also played a critical role for more than a decade in encouraging China to become more involved in the region and with ASEAN in particular.

In the longer run any deepening relationship with China is likely to have an effect on the delicate racial balance in Malaysia between the Malay majority and the Chinese minority, who presently account for more than a quarter of the population. Not surprisingly, it is the Chinese minority who are primarily involved in trade with China, who fill the planes that fly between the two countries, and who benefit the most economically from the bilateral relationship. [923] As a result Malaysia, while seeking a closer relationship with China, is bound to remain at the same time somewhat ambivalent. (The problem of an economically powerful indigenous Chinese minority is by no means confined to Malaysia: a Chinese minority, though relatively smaller than that in Malaysia, also plays the dominant role in the private sectors of Thailand, Indonesia, Myanmar, Laos, Cambodia, Vietnam and the Philippines. [924])

The most dramatic example of the way in which China ’s rise has been transforming relations in the region, however, is South Korea. [925] After the Second World War it became an intimate ally of the United States, a relationship which was cemented in the Korean War, with no small part of its subsequent economic success due to its position as an American vassal state during the Cold War. Yet over the last decade it has been moving closer to China both at a governmental and a popular level. [926] China is now easily the country’s largest trading partner and South Korean firms have invested heavily in the mainland, with China the largest destination for Korean foreign investment. [927] Over half the students from East Asia studying for advanced degrees in China come from South Korea. [928] More than 1 million South Koreans visited China in 2003, while 490,00 °Chinese made visits to South Korea. Each week, there are over 700 flights between the two countries. [929] The crisis over North Korea and its nuclear weapons has also served to bring China and South Korea closer together, with the latter discovering that it had more in common with the cautious Chinese position of restraint than the more aggressive American approach under Bush. Indeed, China ’s handling of the crisis and its emergence as the key mediator with North Korea has enhanced its standing both with South Korea and in the region more widely. [930] The fact that the United States has meanwhile strengthened its defence ties with Japan has further alienated South Korea, which views Japan with considerable enmity as a result of the latter’s conduct during its colonial occupation of the country. [931]

South Korea’s attitude towards North Korea and China on the one hand and the United States on the other, however, remains the subject of major domestic argument: after the two liberal administrations of Kim Dae-jung and Roh Moo-hyun, which emphasized reconciliation with North Korea and sought closer relations with China, the election of conservative president Lee Myung-bak in 2008 marked a shift towards a tougher stance on North Korea and a closer relationship with the United States. There is also tension between China and South Korea over the precise ancestry of the ancient kingdom of Koguryo, which occupied territory in North Korea, South Korea and also over the Chinese border, and is claimed by both Korea and China as part of their history. In the longer run, however, it seems likely that South Korea will continue to move closer to China and further away from the United States, perhaps to the point where eventually the US-Korean alliance will be dissolved — but that is unlikely to happen within less than a decade, probably rather longer. [932] In the meantime, it is possible that the United States will eventually withdraw its troops from the Korean Peninsula if and when a solution is found to the present crisis. [933] The rapprochement between China and South Korea is a powerful echo of earlier times when Korea was a close and important tributary state of China, a situation that lasted many centuries until China ’s defeat in the Sino-Japanese War. [934]

Australia cannot be counted as part of East Asia, but belongs more properly to Asia-Pacific, which embraces that region together with the Pacific countries. One of the great geo-cultural anomalies is that a country that lies just to the south of Indonesia has an overwhelmingly white majority and has long been considered a Western country. Though historically part of the British Empire, ever since 1942 it has enjoyed an extremely close relationship with the United States, for most of that period being its closest and most loyal ally in the Asia-Pacific region. Over the last decade, however, China ’s growing economic power has exercised a mesmerizing effect on the island continent. By far the most important reason for this is China ’s voracious appetite for Australia ’s huge deposits of raw materials, especially iron ore. Largely as a result of Chinese demand, the Australian economy enjoyed uninterrupted growth for almost two decades until the financial meltdown and would appear to be in the process of decoupling its fortunes from the Western economy, especially the United States. [935] Australia is one of the relatively few countries in the world that has experienced a double benefit from China ’s rise: namely the falling price of manufactured goods and, until the global downturn, the rising price of commodities. If twentieth-century Australia was dominated by New South Wales and Victoria, and the rivalry between Sydney and Melbourne, this century will be characterized by the rise of the mining states, Western Australia and Queensland, with China the reason. China ’s interest in Australia ’s vast natural deposits is not confined to that of a customer; its role as an investor is becoming increasingly important, with the purchase of stakes in Australian mining firms, including, most dramatically so far, the proposal for the Chinese state-owned aluminium producer Chinalco to buy a large chunk of the debt-laden Anglo-Australian mining group Rio Tinto.

Not surprisingly, China ’s growing role in Australia ’s prosperity is having important political ramifications. The clearest expression of this hitherto has been the election of Labour prime minister Kevin Rudd in 2007. A fluent Mandarin-speaker, well versed in Chinese culture and tradition, and possessed of excellent contacts in Beijing (having worked there for many years), he can be described as the first Chinese-orientated political leader to be elected in the West. Although Australia remains very closely aligned with the United States, its growing rapprochement with China seems likely to influence the nature of its relationship with Washington. [936] It is premature to suggest that Australia will at some point distance itself from the United States and in effect bandwagon with China in the manner, for example, of South Korea or Thailand, but it would not be surprising to find Australia becoming more sensitive about its relations with China and making these sensitivities known to the Americans. In that way Australia might become the Western voice of China. A key factor in this will be the course of Australian politics: Rudd’s predecessor as a Labour prime minister was Paul Keating, the first Australian premier to advocate the turn towards Asia, while his successor, the long-serving Liberal prime minister John Howard, could hardly have been more pro-American. In the much longer run, however, it is conceivable that Australia will move into China ’s orbit and become increasingly distant from the United States as the latter’s power and utility decline.

ECHOES OF THE PAST

In the light of the region’s realignment towards China, we can now return to the question of how East Asia’s relationship with China is likely to evolve and, in particular, to what extent it might bear some of the hallmarks of the tributary system. The tributary system and Westphalian system are often regarded as polar opposites and mutually exclusive, the former involving a hierarchical relationship, the latter based on relations of equality between sovereign nation-states. In fact, as mentioned in Chapter 7, the Westphalian system in practice has never been quite that simple. For most of its history it was largely confined to a group of European states, since until the second half of the twentieth century the great majority of countries in the world did not enjoy independence, let alone equality. [937] Even after these countries became sovereign nation-states, in the great majority of cases they were to enjoy nothing like equality with the United States or the West European nations, a situation which was exacerbated during the Cold War, when nation-states experienced what was, in practice, limited sovereignty in their relationship with the superpower to which they owed their allegiance. Life has not been that dissimilar in the era of the single superpower, with most countries enjoying varying degrees of limited sovereignty in their relationship with the United States. Given the profound inequalities in interstate relations, the concept of equality in the Westphalian system is thus legalistic rather than real. In practice, as with the tributary system, it has strong hierarchical features. [938] Like the tributary system, the Westphalian system also has an influential cultural component, namely the idea of hegemony or soft power. In other words, the distinction between the tributary and Westphalian systems is not quite as clear-cut as one might think. Seen in these terms, the restoration of elements of the tributary system in a modernized form does not seem so far-fetched. Some of the old building blocks, moreover, remain firmly in place. Chinese culture not only continues to enjoy great prestige throughout East Asia, but its influence is once again on the rise, helped by the presence of a much larger Chinese minority than existed in earlier times, especially in South-East Asia. Furthermore, in North-East Asia, and also Vietnam, Confucianism is a shared heritage in a not dissimilar way to the role of the Graeco-Roman tradition in Europe.

Historically, the tributary system was the international concomitant of China ’s identity and existence as a civilization-state. And just as the influence of the civilization-state remains palpable in the domestic sphere, so the persistence of the tributary state is apparent in the realm of international relations. In important respects, indeed, Chinese attitudes towards concepts of sovereignty and interstate relations continue to owe at least as much to the tributary legacy as to the contemporary Westphalian system. [939]

The Chinese concept of sovereignty differs markedly from that in Western-inspired international law. Take the dispute over the sovereignty of the Spratly and Paracel islands, which, though shelved for now — following the agreement with ASEAN — remains, in the long term, unresolved. [940] The Spratly and Paracel islands are barely islands at all, but a collection of uninhabited rocks, many of which are usually under water, situated in the South China Sea, the Spratlys to the north of East Malaysia and to the west of the Philippines, and the Paracels to the east of Vietnam. The idea of maritime sovereignty is a relatively recent innovation, dating from 1945 when the United States declared that it intended to exercise sovereignty over its territorial waters, [941] and it is this body of law that essentially forms the basis of the claim by the various South-East Asian states to the Spratlys and Paracels. China, in contrast, rests its argument on ‘historic claims’, namely that the islands have for thousands of years formed an integral part of the south-east frontier of the Middle Kingdom in the same manner, for example, as the land border to the north of Beijing. Expeditions to the islands have discovered various Chinese artefacts, such as chinaware and copper cash from the Tang and Song dynasties, that have been used to buttress these ‘historic claims’ and demonstrate that the islands have long been a part of China. The islands are part of the folklore of Chinese culture, kept alive, in various invocations of the Chinese frontier spirit, by articles written by Chinese journalists who regularly visit the islands. They are shown on many Chinese maps as clearly within the ‘historic claim line’ (see map on p. 293) and therefore as part of China. [942] Hainan Island, off the southern coast of China, may be China’s smallest land province, but it is also regarded — because of the extent of its maritime territory which, as claimed, reaches far into the South China Sea — as its largest ‘ocean province’. [943] In 2007 Beijing established the new Sansha municipality in Hainan Province, which has jurisdiction over three islets that Vietnam claims in the Spratly and Paracel archipelagos. This led to large-scale protest demonstrations outside the Chinese embassy in Hanoi. [944] The idea of ‘historic claims’ finds expression in the Chinese use of intertemporal law, which concerns rights or wrongs in the historical past. Chinese legal scholars argue that: ‘a judicial fact must be appreciated in the light of the laws contemporary with it, rather than the laws in force at the time when a dispute arises.’ [945] This gives force and legitimacy to history rather than the present, to the laws that prevailed during the era of the tributary system rather than the present international legal system.

Map 11. Chinese Claims in the South China Sea

In 1984 Deng Xiaoping suggested ‘the possibility of resolving certain territorial disputes by having the countries concerned jointly develop the disputed areas before discussing the question of sovereignty’. [946] In other words, the question of sovereignty should not necessarily delay moving forward on other issues. Deng’s remark has frequently been cited by Chinese sources in the context of the islands in the South China Sea, where his approach has in practice been followed, and in relation to the Diaoyu/Senkaku islands in the East China Sea that are disputed with Japan; it has also been suggested in connection with Taiwan. [947] While insisting on their ultimate sovereignty over the latter, the Chinese have offered to shelve the matter more or less indefinitely, providing Taiwan does not seek to declare independence, illustrating the flexibility with which the Chinese are prepared to approach the issue. Alternatively, they have suggested that, providing their sovereignty over the island is accepted by the Taiwanese, Taiwan can continue to have its own government, political system and even armed forces. [948]

This highlights another fundamental difference between the Chinese conception of sovereignty and that held in the West — most clearly demonstrated in the attitude displayed by China towards the handover of sovereignty in Hong Kong. The transfer of sovereignty was regarded by the Chinese as non-negotiable, as in the case of all the so-called lost territories — namely, Taiwan, Hong Kong, Macao and probably the various disputed islands too — which China regards, on the basis of history, culture and ethnicity, as rightly its own. But by Western standards its sovereignty has been exercised in an unusually pliant manner. The British — and Western — narrative concerning Hong Kong was that, following the handover in 1997, the Chinese would transform the territory into something that closely resembled the mainland. This expectation has not been borne out. For the most part, Hong Kong has changed very little. As such, it is utterly atypical of the normal experience of post-colonial transition. The key to understanding the Chinese approach lies in the notion of ‘one country, two systems’, as enshrined in the territory’s constitution, otherwise known as the Basic Law. As far as China was concerned, the issue was the recognition of its sovereignty over Hong Kong rather than whether or not the territory shared the same system of government. [949] The Western approach is different: sovereignty and one-system are seen as synonymous. ‘One country, two systems’ lies in a millennia-old Chinese tradition that acknowledges and accepts the existence of differences between its many provinces, or, to put it another way, that such differences are an inherent and necessary part of a civilization-state. In other words, the civilization-state, like the tributary system which derives from it, is based on the principle of ‘one civilization, many systems’. In contrast, the Western notion of sovereignty rests on the principle of ‘one nation-state, one system’, and the Westphalian system on ‘one system, many nation-states’ [950].

The Chinese attitude towards sovereignty is closely related to the old Confucian concept of ‘harmony with difference’, which has been revived under the present Chinese leader, Hu Jintao. Some Chinese scholars, in fact, have interpreted ‘one country, two systems’ as an example of ‘harmony with difference’. Whereas in Western discourse, harmony implies identity and a close affinity, this is not the case in Chinese tradition, which regards difference as an essential characteristic of harmony. According to Confucius, ‘the exemplary person harmonizes with others, but does not necessarily agree with them; the small person agrees with others but is not harmonious with them.’ [951] Agreeing with people means that you are uncritically the same as them: the opposite of harmony is not chaos but rather uniformity and homogeneity. Interestingly, in China the latter are often associated with the term ‘hegemony’, which is used pejoratively to describe big power behaviour — once the Soviet Union, now the United States — in contrast to ‘harmony’ which is seen as enabling and embracing difference.

In considering the future relationship between China and its East Asian neighbours, it is pertinent to take into account not only the historical legacy of the tributary system but also what might be described as the realpolitik of size. This was clearly a significant aspect of the tributary system, but it is an even more powerful factor in the era of globalization and the modern nation-state. China is anxious to emphasize its desire to exercise self-restraint and respect for the interests of other states, but in the longer run, on the assumption that China continues its economic rise, the disparity between China and the other nations in the region is likely to become ever more pronounced over time. It is not difficult to imagine a scenario in which the inequality between the power of China and that of neighbouring states will be rather greater than that to be found in any other region of the world. Such overweening power will be expressed in a gamut of ways, from economic and cultural to political and military. This is the major factor that lies behind the suspicions latent in the region towards China: the fear not so much of what China is now — especially as it has gone out of its way to reassure its neighbours — but what it might be like in the future. [952] The chief of the Malaysian navy put it like this in 1996: ‘as the years progress, there exist[s]… uncertainty in the form of China ’s behaviour once she attained her great power status. Will she conform to international or regional rules or will she be a new military power which acts in whatever way she sees fit?’ [953] Imagine the relationship, fifty years hence, between a hugely powerful and advanced China, with a population well in excess of 1.5 billion, and Laos and Cambodia, with populations by then of perhaps around 10 million and 20 million respectively; or, for that matter, Malaysia, with perhaps rather more than 30 million people. On grounds of size — let alone the tributary legacy — the relationship between China and its region is bound to be fundamentally different from that between the dominant country and its neighbours in any other region.

What will China be like? How will it act? It is clear that China ’s behaviour towards, and conception of, the region is bound to be heavily influenced by the legacy of the tributary system and its character as a civilization-state. The influence of this way of thinking is already apparent in China ’s attitude towards the Spratly and Paracel islands, Hong Kong and Taiwan. In its own region at least, one can categorically say that China will not simply be a Westphalian nation-state. But even if that is the case, how assertive is China likely to be? Is one to judge China’s future behaviour by the restraint and relative magnanimity that is characteristic of the present regime, or will that be superseded by something altogether more Sinocentric? Could China slowly abandon its present extreme caution and become more forceful in its relations with other countries, for example those, such as India, Japan and the South- East Asian countries, with whom it has territorial disputes which for the time being it has agreed to shelve? [954] As China grows more powerful, it would hardly be surprising if it did become more Sinocentric: in fact, at least in the longer run, that is what one might expect. After all, with the present overwhelming emphasis on economic development and the desire to ensure that there are no distractions, restraint is at least partly a function of priorities: in the reform era, China ’s self-discipline has been huge and impressive. But casting our minds into the future to a time when living standards are much higher and China has established itself as the dominant power in East Asia, how might a more Sinocentric outlook express itself?

Perhaps the best way of answering this question is to look for pointers in the present, however isolated and scattered they might be. There are three examples. The first concerns the Chinese invasion of Vietnam in February 1979, which China described as a ‘punitive war to teach Vietnam a lesson’ about the proximity of Chinese power and its belief that the Vietnamese had not been sufficiently grateful for the assistance they had received from China during the Vietnam War. [955] The language of this war, the tone of imperial condescension, the desire to assert a hierarchical relationship, the need for big brother to teach younger brother a lesson, were a throwback to the days of the pre-modern Chinese world order and the tributary system. [956] In not dissimilar vein, China has used military force in the disputes over the islands in the South China Sea, against the Philippines in 1995 and most notably against Vietnam in 1956, 1974, and again in 1988, when China took six islands in the Spratly area, three Vietnamese ships were sunk and seventy-two Vietnamese seamen killed. [957] These actions all bear the imprint of the tributary system, the need to assert the natural hierarchical order of things, and, if necessary, punish those who dared step out of line. It should be noted, however, that relations between China and Vietnam have improved considerably over recent years, although the enmity between them, which stretches back many centuries, is deeply rooted. [958]

The second example concerns the relationship between China and Chinese citizens abroad. In autumn 2005 it was alleged that a Chinese female tourist in Malaysia had been strip-searched and subjected to violent assault by Malaysian officials. The issue was first reported by the China Press, a Malaysian Chinese-language newspaper, and was subsequently taken up with such vehemence by the Chinese media that the Malaysian prime minister ordered an independent investigation, as well as instructing his home affairs minister to make a special trip to Beijing in order to explain and apologize. [959] An editorial in the China Daily, the official government newspaper, exclaimed: ‘All sensible minds cannot but be shocked by the images showing a female compatriot of ours being forced to perform “ear-squats” naked by a Malaysian policewoman in uniform. No excuse can justify brutality of such magnitude.’ [960] The editorial exercised little restraint or circumspection. Yet soon afterwards it was discovered that the woman in question was not a Chinese citizen, or even Chinese for that matter, but a Malay. [961] The Chinese response to the incident was, from the outset, both disproportionate and belligerent, and based on false information culled from the Chinese-Malaysian press. It would be wrong to draw too many conclusions from one isolated incident, but the Chinese reaction, under the circumstances, was overbearing and intemperate. The Chinese treated the Malaysian government with scant respect. They didn’t even have the courtesy to check the facts first. They behaved in an imperial fashion towards what they seemed to regard, in tone at least, as a lesser state. Meanwhile, the Malaysian government, for its part, acted in the manner of a suitably humble and deferential tributary state. As Chinese tourism in the region grows apace, the incident suggests that the protection afforded to Chinese citizens abroad will be attentive and proactive at best, invasive and aggressive at worst.

The final example concerns the response of the Chinese to the riots against the local Chinese in Indonesia in 1997. In the event, the Chinese government displayed considerable restraint, seeking to discourage the kind of demonstrations staged by the overseas Chinese in Hong Kong, Taiwan, New York, South-East Asia and Australia. [962] Nonetheless, to judge by postings on the internet, the reaction of many Chinese was one of considerable anger. The following post is one such example:

My mother country, do you hear the crying? Your children abroad are crying out. Help them. I do not understand politics and do not dare talk about politics. I do not know what it means to say ‘we have no long-term friends or enemies, only long-term interests’, and I do not know what these interests are… I only know that my own compatriots are being barbarously slaughtered, they need help, and not just moral expressions of understanding and concern. My motherland, they are your children. The blood that flows from their bodies is the blood of the Han race. Their sincerity and goodwill also come from your nourishment. Help them… [963]

Notwithstanding these sentiments, the Chinese government acted with caution and moderation; but as Chinese power in the region grows, the relationship between the China and the overseas Chinese — who wield exceptional economic power in virtually every ASEAN country, [964] and whose self-confidence, status and position will be greatly enhanced by China ’s rise — will become a growing factor in these countries. [965] Emboldened by the rise of China, the local Chinese may seek to take advantage of their improved bargaining position in order to enhance their power, while governments in these countries are likely to be increasingly cautious about the way they handle their Chinese minorities for fear of upsetting Beijing. The historian Wang Gungwu argues that the overseas Chinese share many characteristics with other ethnic minorities: ‘But where the “Chinese” are totally different is [that] their “mother country” is near Southeast Asia, very large and populous, potentially powerful and traditionally contemptuous of the peoples and cultures of the region.’ [966]

TAIWAN — THE GREAT NON-NEGOTIABLE

There have been two great exceptions to the new turn in China ’s regional policy. One is China ’s most important ‘lost territory’, namely Taiwan, and the other her regional colonizer and greatest adversary, Japan. While China has pursued a strategy of engagement, accommodation and compromise with virtually every other country in the region since the turn of the century, that cannot be said of its attitude towards Japan or, at least until recently, Taiwan. [967]

China’s attitude towards Taiwan is fraught not only because it regards the island as one of its lost territories, and therefore as historically part of China; there is an extra charge because Taiwan became a bone of contention after the civil war between the Chinese Communist Party and the nationalist Kuomintang, with the flight of Chiang Kai-shek and his forces to the island and the declaration that it was now the Republic of China, claiming sovereignty over the whole of China. As a consequence, Taiwan represents unfinished business, the only incomplete item on the Party’s civil war agenda. This is why the return of Taiwan to Chinese sovereignty is the ultimate non-negotiable for the present regime and, given the strength of Chinese public opinion on the issue, probably for any other regime one could imagine as well. [968] The road since 1949 has been tortuous, from the pariah status bestowed upon China by the West and its recognition of Taiwan rather than the People’s Republic of China as the true China, to the American volte-face after the Nixon-Mao rapprochement, and then the steady international isolation of Taiwan over the last four decades. But China ’s ultimate objective, namely reunification, has proved beyond reach because the Taiwanese themselves have remained firmly opposed to it, with the tacit support of the Americans.

Indeed, China ’s hopes were to be thwarted by a most unexpected development, a growing sense of Taiwanese identity culminating in the electoral defeat of the Kuomintang (KMT), which, in principle at least, had always supported a one-China policy, and the victory of the pro-independence Democratic Progressive Party (DPP). After the election of the DPP’s Chen Shui-bian as president in 2000, Taiwan pursued a policy of desinicization and increasingly assertive nationalism. This happened to coincide with growing economic interdependence between China and Taiwan, which, though resisted for a period by Chen and his predecessor as president, Lee Teng-hui, [969] has accelerated to the point where, by 2003, half of the top 1,000 Taiwanese firms, including all the major computer companies, had invested in the mainland, usually in manufacturing subsidiaries. Around three-quarters of Taiwanese foreign direct investment presently goes to China, and there are hundreds of thousands of Taiwanese living and working in the Shanghai region and Guangdong province. The Chinese market now accounts for around 40 per cent of Taiwanese exports, a huge increase on just a few years ago. [970] Will growing economic interdependence mean that the two countries are drawn irresistibly closer together, resulting in some kind of political arrangement between them? Or will the sense of difference that clearly informs Taiwanese consciousness close off that option and lead to a growing desire for de jure, and not just de facto, independence?

A key question here concerns the nature of Taiwanese identity. To what extent is it constituted as different from and in opposition to Chinese identity? And is a sense of Taiwanese identity positively correlated with support for Taiwanese nationalism and ultimately independence? As can be seen from Figure 29, between 1992 and 2006 the proportion of Taiwanese who thought of themselves simply as Chinese has been steadily declining, while those who felt themselves to be Taiwanese has been commensurately rising. However, the group that consider themselves to be both Taiwanese and Chinese has been consistently large — by a narrow margin, in fact, the biggest of all — accounting for almost half the electorate. The picture is, therefore, rather complex. The fact that the largest group consider themselves to be both Taiwanese and Chinese suggests that the two identities, far from being mutually exclusive, are seen by almost half the population as complementary. Many, in fact, recognize that their Taiwanese identity, based on a shared sense of history, culture, place and customs, exists within and alongside their sense of being Chinese. [971] This would suggest that there is not necessarily a strong correlation between a sense of Taiwanese identity and support for independence. This is rather borne out in Figure 30. The largest group supports the status quo, with any decision on the island’s status to be postponed until later, or what might be described as a ‘wait and see’ position. The second largest group (which enjoys half the support of the former) favours the status quo now and independence later, but this is more or less matched by those who prefer the status quo indefinitely. And not far behind this group in terms of support are those who favour the status quo and unification with China later; there is minimal backing, though, for immediate unification. Only a small minority support immediate independence, and this group combined with those who favour the status quo and independence later comprise less than a quarter of the population. Furthermore, the combined support for these two positions peaked in 1999 and has subsequently levelled off or even declined slightly.

Figure 29. Changing Taiwanese attitudes towards Taiwanese/Chinese identity.

Figure 30. Taiwanese support for unification and for independence.

This suggests that Taiwanese identity is a diverse and malleable concept which means different things to different people. It does not appear to have a strong political content, otherwise there would be a closer correlation between Taiwanese identity and support for independence. [972] Rather than seeing the direction of Taiwan as predetermined, the situation is, in fact, fluid and open-ended. Taiwanese opinion is open to influence according to the way in which China behaves and the exigencies of Taiwanese politics, together with deeper underlying trends, including how China evolves economically and politically in the longer run, what happens to the Taiwanese economy, and the impact of economic integration between China and Taiwan.

While there is nothing inevitable about the political effects of growing economic integration, the sheer speed and extent of the process over the last few years has had a major impact on Taiwanese politics. Fear of its consequences persuaded former president Lee Teng-hui to impose restrictions on investment in China by Taiwanese companies and to hasten the process of Taiwanization in order to take advantage of what Lee saw as a window of opportunity before the dynamic of economic integration began to close down options. [973] Chen followed suit, though he was forced to bow to pressure from Taiwanese companies and ease some of the restrictions. The growing dependence of Taiwanese companies both on the Chinese market and on their manufacturing operations in China has become an influential consideration in the minds of both Taiwanese business and the Taiwanese electorate. Whereas once the country was largely dependent on the American market, this has been supplanted in importance by the Chinese market in a manner similar to China ’s other neighbours. In Taiwan’s case, though, this process has happened even more quickly and gone a lot further — primarily, no doubt, because of shared Chinese customs, culture and language, though other factors like geographical proximity are also significant. Any calculation concerning Taiwan ’s economic future, or the prospects for living standards, must inevitably place China at the centre of the equation. It is hardly surprising that in a 2005 survey almost twice as many Taiwanese were in favour of strengthening economic ties between China and Taiwan as compared with those in favour of downgrading them. [974] And China has recently sought to use these growing connections to build links with different sections of the Taiwanese population in order to influence the political climate and place political pressure on the Taiwanese government. [975]

The manifest volatility of Taiwanese public opinion has underlined the need for China to court and influence it, yet this is a matter to which the Chinese government has historically attached relatively little importance. There are three reasons for this. First, the Chinese concept of the ‘lost territories’ means that Taiwan, as in the case of Hong Kong, is seen in terms of an historic claim rather than popular sovereignty: in other words, legitimacy is regarded as a matter of history rather than the present. As a consequence of this attitude, the Hong Kong people were not represented in the talks about the handover, which were conducted exclusively between the Chinese and the British. [976] This differed from what has normally happened in negotiations over decolonization, with those seeking independence from the colonial power generally represented at the conference table. Second, the Chinese attitude towards both Hong Kong and Taiwan demonstrates the overriding importance attached to state sovereignty and the absence of any tradition of popular sovereignty, a subject I discussed in Chapter 7. Third, the Chinese view of Taiwan involves a particular concept of Chineseness, which conceives of it in essentialist terms, as immutable, timeless and fixed in history, something that is inherited at birth, whether one likes it or not. This is directly related to the discussion in the last chapter about the nature of the Han Chinese, who are seen by the Chinese government as homogeneous, even though in reality the Han are a very diverse group. It follows, therefore, that the notion of a Taiwanese identity that serves to supersede or elide one’s Chinese belonging is given little or no credence. [977]

As a consequence the Chinese government, at least until recently, has made little attempt to woo Taiwanese opinion. Indeed, it has often acted in a way that served to inflame, alienate, intimidate and antagonize the Taiwanese — issuing thinly veiled threats, refusing to countenance their views, and resorting to coercive action, most notably the firing of missiles into the Taiwan Strait during the 1996 presidential election campaign. [978] Recently, however, China has been more prepared to engage with the situation in Taiwan as it actually is and thereby take Taiwanese opinion more seriously. [979] This was illustrated by its wooing of the KMT leadership in the period prior to the 2008 parliamentary and presidential elections, including the visit of the former KMT leader Lien Chan to Beijing in 2005. There is now growing optimism in Beijing based on the fact that support for Taiwanese independence seems to have peaked and a view that the majority of Taiwanese are basically pragmatic — supporting, in one form or another, the status quo. The rising economic interdependence between China and Taiwan also points in the direction of the status quo or closer political ties.

China is prepared to be patient and settle for the status quo for the indefinite future, provided Taiwan does not declare independence. This would have the virtue of enabling Beijing to concentrate on China ’s economic development and sidelining an issue which, in the event of a military conflagration, could do untold damage to the country’s global and regional standing. There is a quiet belief on the part of the Chinese that time is on their side. Taiwan ’s growing economic dependence on China is one obvious reason for this, while China ’s own spectacular progress is clearly making the country steadily less unattractive in the eyes of the much richer Taiwanese. At the same time Taiwan, throttled by its lack of diplomatic recognition, finds itself in danger of being excluded from the new regional trade arrangements centred on ASEAN. [980] Another factor is the improvement in China ’s military competence and capacity across the Taiwan Strait, consequent upon the country’s growing economic and technological capacity, which acts as a powerful deterrent to any adventurist action by Taipei. Furthermore, the fact that the Bush administration consistently sought to restrain President Chen Shui-bian’s more outlandish schemes also served to reassure Beijing. [981] Most important of all, the sweeping victories achieved by the KMT in the parliamentary and presidential elections in early 2008 confirmed Beijing in its new sense of optimism. Weary of Chen’s preoccupation with independence and concerned about the weak state of the economy, the electorate voted decisively for improved relations with the mainland, not least economic, with the new president Ma Ying-jeou promising to maintain the status quo and seek a closer relationship with China. Direct air flights and tourism have followed; and it is possible that a Closer Economic Partnership Arrangement, similar to the one between China and Hong Kong, might in time be agreed. [982] In April 2009 there was dramatic progress when China and Taiwan concluded new agreements on financial services, direct flights and fighting crime. This almost certainly marked a major turning point, paving the way for a much closer relationship between the two countries. Indeed, it is not inconceivable that we might witness a major breakthrough in, or even resolution of, the disputes between China and Taiwan in the relatively near future.

In the longer run it is conceivable that Washington might contemplate the idea that Taiwan is no longer a fundamental interest that must be defended at all costs. [983] Certainly, in the light of China ’s rise, Taiwan has enjoyed a declining priority in Washington over recent decades. The Chinese may also have begun to entertain the possibility of rather looser political solutions that might one day be acceptable to the Taiwanese. For some time the Chinese have essentially offered Taiwan an enhanced variant of ‘one country, two systems’, [984] but this has recently been given less prominence. Perhaps the Chinese will contemplate the idea of a Chinese commonwealth or a federal commonwealth under which Taiwan would enjoy not only a high degree of autonomy, as it would under the Hong Kong formula, but also, while recognizing the symbolic sovereignty of Beijing, in effect be granted a measure of independence and even limited autonomy to act in the international sphere. [985] For now, China ’s growing optimism is not misplaced. However, the situation remains fraught with uncertainties. If a future DPP government should at some point go for broke and declare independence, then China would almost certainly seek to reverse that action by military means, thereby embroiling the whole region and the United States in a crisis which would have far-reaching consequences. It may be unlikely, but such a scenario cannot yet be ruled out. [986]

BIG BROTHER AND LITTLE BROTHER

Since 1949 Taiwan has been China ’s most acute regional problem. It is conceivable, however, that Taiwan might be placed on the back burner for a decade or more, during which time longer-term trends might effectively resolve the issue one way or another. If that should happen, then by far the most difficult issue facing China in East Asia would be Japan. [987] Until the Sino-Japanese War of 1894-5, which was a direct consequence of the Meiji Restoration in 1868 — with Japan ’s turn to the West, rejection of its own continent, especially China, and its expansionist ambitions — relations between China and Japan had been relatively harmonious. Japan had been a long-term tributary state, duly honouring and acknowledging its debt to Chinese civilization and the Confucian tradition, even if at times it proved a distant and somewhat recalcitrant one — which, given its island status and advanced civilization, was hardly surprising. [988]

For well over a century, however, following the 1894 war, China ’s relationship with Japan has been far worse than that with any other power. Many Chinese still see that war and the subsequent Treaty of Shimonoseki as the darkest hour in China ’s ‘century of humiliation’. China ’s ignominious defeat and the extremely onerous terms inflicted on China in the peace left a particularly bitter taste. Defeat by what was seen as an inferior nation within the Chinese world order was considered to be a far greater humiliation than losing to the Western barbarians, and served to undermine the prevailing Chinese world-view. This was a case — in the Confucian discourse — of the student beating up the teacher or the younger brother beating up the older brother. [989]

The ignominy visited upon China in the 1894-5 war was compounded and accentuated by Japan’s occupation of north-east China in 1931 and then its full-scale invasion of north-east, east and parts of central China in 1937; the scars these hostilities left have never been healed. To this day, the Nanjing Massacre defines the nature and identity of the Japanese as far as the Chinese are concerned and therefore in large measure their attitude towards Japan. It may have taken place seventy years ago, but it remains an open wound, as present in the relationship between the two countries as if it had happened yesterday. Even the numbers killed — 300,000 in the Chinese interpretation — is still a highly charged issue. [990] Of course, the reason why these questions remain so alive is because the Japanese have failed to apologize properly, or demonstrate any serious sign of confronting their own past, unlike the contrition that the Germans have shown for their behaviour in the Second World War. [991] The Japanese paid dearly for their defeat at the hands of the United States and Europe — with huge casualties, the Tokyo trials, the confiscation of its overseas assets and the American occupation — but they have shown little remorse towards their Asian neighbours for their country’s often barbaric behaviour, which was far worse than anything Japan meted out to the Western powers. The Nanjing Massacre was the worst example, with the mass killing and rape of civilians, but this was repeated on a smaller scale elsewhere in China, while the Japanese occupation of Korea was also marked by considerable cruelty. [992] The numerous apologies that Japan has given have been little more than formulaic, while the courts have refused to compensate the individual victims of crimes committed in Japan ’s name. The grudging attitude towards its Asian neighbours is symptomatic of post-Meiji Japan — respect for the West and contempt for Asia. Nor, for most of the post-war period, has Japan needed to rethink its attitudes. [993] It rapidly re-established itself as the dominant power in the region, in a different league to its poorer neighbours, while the United States, its sponsor and protector, neither required nor desired Japan to apologize to Communist China during the Cold War, given that a new and very different set of priorities now applied.

Fast-forward fifty years, however, and East Asia presents a different picture. Japan no longer constitutes the great exception, a Western level of development surrounded by a sea of backwardness. On the contrary, the first four Asian tigers enjoy a GDP per head not far short of Japan ’s, [994] living standards in the region have risen enormously, and Japan ’s old nemesis, China, has been the subject of a remarkable economic transformation. In short, history has finally caught up with Japan. [995] As a society and culture, Japan has always been at its best when its goals — and the path towards those goals — were set in concrete. But when both the goals and the path need to be adapted to changed circumstances, perhaps even subject to wholesale revision, Japan seems to find the shift inordinately difficult. [996] Rather like France, it tends to fiddle and delay until nothing short of a revolution — or, in Japan ’s case, a restoration — is required. In the face of the transformation of East Asia, and above all China, Japan has been effectively paralysed, unable to change direction, offering little other than more of the same. The ruling Liberal Democrats, who have dominated Japanese politics since 1955, have found lateral thinking virtually impossible. [997] As Chinese East Asian expert Zhu Feng argues: ‘ Japan has been less prepared for the rise of China than any other country. They can’t believe it. They don’t want to believe it. Yet it affects them more than anyone else.’ [998] For the most part, Japan has gone into denial about the rise of China, wishing that somehow it might go away or that it was perhaps a figment of everyone else’s imagination.

From the early nineties, Japanese politics began to shift to the right and become more nationalistic, a process hastened by the collapse of the Social Democratic Party, which had always been a staunch opponent of Japanese rearmament. [999] Japanese ruling politicians grew more aggressive towards China, displaying impatience with traditional deferential tendencies towards their neighbour, increased concern about China ’s rise, and frustration with what they saw as China ’s exploitation of Japan ’s colonial past. [1000] In 1996 for the first time the proportion of those saying in an annual poll that they did not have friendly feelings towards the Chinese exceeded those that did. The crisis over North Korea and its threatened development of nuclear weapons, together with its abduction of Japanese citizens between 1977 and 1983, served to harden nationalist sentiment: indeed, the North Korean threat was seen as a proxy for the Chinese threat, thereby helping to ratchet up hostility towards China as well. [1001] In 1999 an extreme nationalist, Ishihara Shintaro, was elected governor of Tokyo: previously anti-American, he quickly became rabidly hostile towards China. Meanwhile, Japan entered into a new defence agreement with the United States which was clearly directed against China and which implicitly involved Japan in the defence of Taiwan. [1002] The growing enmity towards China found its fullest expression to date during Junichiro Koizumi’s premiership between 2001 and 2006, with his annual visits in his capacity as prime minister to the Yasukuni Shrine — a politically inspired memorial to Japan’s fallen soldiers, including Class A war criminals — which were intended to encourage nationalism at home while also being provocative towards China. Since Koizumi, however, both the short premiership of Shinzo Abe, previously regarded as hawkish towards China, and especially that of Yasuo Fukuda have revealed a desire in ruling circles to temper the hostility of the Koizumi era and seek a more accommodating relationship with China. [1003] It remains to be seen what course Japan will steer during the premiership of Taro Aso, who also has a nationalist reputation, but his period in office is likely to prove of short duration.

Japan, meanwhile, finds itself more or less isolated in East Asia. Although it has been generous in bestowing aid on many countries in the region, it has failed to address its wartime legacy, which is a continuing source of resentment for many of its neighbours, especially South Korea and China. It has remained, furthermore, relatively aloof from its neighbours, having refused to open up its market and resisted entering into multilateral, rather than bilateral, arrangements with them until its hand was finally forced by China ’s recent initiatives with ASEAN. [1004] There have been two recent illustrations of Japan ’s continued isolation. The first concerned its failed bid to become a permanent member of the United Nations Security Council in 2005, when China succeeded in mobilizing most of the region in opposition to Japan’s proposed membership, thereby effectively torpedoing it. [1005] The second example was the anti-Japanese demonstrations in China in 2005, provoked partly by Japan’s UN bid but mainly by the publication of a new school history textbook in Japan that sought to downplay Japanese crimes against China during the last war; [1006] in this case, as in that of the United Nations, the sympathies of the region were overwhelmingly on the side of the Chinese rather than the Japanese government. [1007] In both instances, the underlying cause of Japan ’s isolation is the same: its failure to address not only China ’s grievances about the last war but nearly everyone else’s as well. [1008]

China ’s rise requires a fundamental shift in Japanese thinking — indeed, Japan ’s interests would have been best served if it had been willing to address the wartime treatment of its neighbours several decades ago [1009] — but there remains little sign of it. Instead Japan has clung to variants of its post-war stance, with the result that China has succeeded, with the adroitness of its recent diplomacy in the region, in outmanoeuvring it. Meanwhile, the relationship between the two remains frozen in the manner of the Cold War, with each twist and turn being seen in terms of a zero-sum game. [1010] The issues of contention between the two are many, though the historical questions clearly predominate over all others. In terms of the present, by far the most important — and dangerous — issue concerns the disputed Senkaku/ Diaoyu islands and the similarly disputed maritime border in the East China Sea. [1011] There have already been clashes over the islands, most notably in 1990. [1012] Unlike the disputed islands in the South China Sea, there are known to be significant oil and gas deposits in the area, thereby lending them an added strategic significance. China has offered to shelve the issue of sovereignty, as it has done with the Spratlys, in favour of joint development, but the Japanese have rejected the idea. The Chinese, meanwhile, have begun exploration in a disputed area of sea. [1013] An agreement between the two countries on joint exploration and development would help to ease tension, though it would not resolve the underlying issue of sovereignty over the islands or the maritime border. [1014] Until some kind of agreement is reached, this dispute is the one most likely to provide a flashpoint between the two countries. [1015]

At times of crisis, the Chinese government has tried hard to restrain popular attitudes of resentment towards Japan for fear that they might get out of control; sometimes, however, they have spilt over, as was the case with the large and angry demonstrations that took place in several Chinese cities in 2005. While Taiwan and the United States have been important factors in Chinese nationalism, especially in the 1990s, its growth has been driven, above all, by feelings of resentment and hostility towards Japan. These remain much stronger than the enmity displayed towards the United States. [1016] Apart from the Korean War, there is no history of conflict between China and the US. Moreover, the two countries succeeded in 1971 in remaking their relationship and putting it on an entirely new footing that has survived to the present day. They are also, of course, geographically separated by the expanse of the Pacific Ocean. In contrast, the bitter enmity between the Japanese and Chinese has existed for over a century without interruption. There is simply no modern tradition of compromise or coexistence between them and yet they are by far the two most powerful countries in East Asia. [1017] The Chinese may not particularly like the Americans but they generally respect them; in contrast, as I have frequently found, the Chinese — including the highly educated — will often volunteer that they hate the Japanese. [1018] The rise of China, moreover, has if anything served to harden attitudes towards Japan. As Shi Yinhong has observed, the view is now widely expressed that: ‘If China concedes to Japan it means that China cannot rise. What is the point of rising if we have to concede to Japan?’ [1019] It is, nonetheless, strongly in China ’s interests to play for time. Notwithstanding that Japan remains East Asia’s largest economy (according to GDP by market exchange rates) and by far its most advanced, time, as always it would seem, is on China’s side. Assuming that China continues to grow at a brisk pace, the balance of power between the two will continue to move in China’s favour, [1020] with the latter steadily emerging as the fulcrum of the East Asian economy. [1021] Even for Japan, China is now of great economic significance: it became Japan’s largest export market in 2008, overtaking the United States, with the value of Japanese exports to China doubling between 2000 and 2003, [1022] and it has also become an important manufacturing base for many Japanese multinationals. Japan, in short, is being drawn into a relationship of growing economic interdependence with China. But this does not mean that relations between the two countries will inevitably grow more harmonious: the underlying antagonism between them is far too deeply rooted for that.

Map 12. The Disputed Senkaku/Diaoyu Islands

So how is the relationship between China and Japan likely to evolve? There are several possible scenarios. [1023] Hitherto, Japan has essentially regarded itself as different, and apart, from the region. As we have seen, that has been the case ever since the Meiji Restoration, with Japan looking up to the West and down on Asia. The fact that this mindset has been a fundamental characteristic of Japan ever since 1868 makes the task of changing it even more difficult and daunting. [1024] Since its defeat in the Second World War, Japan’s detachment from Asia has been reinforced by its military dependence on the United States, with the American defence guarantee obliging Japan to look east across the Pacific Ocean rather than west to its own continent, thereby encouraging it to think of itself as an Asia- Pacific rather than East Asian power. This is illustrated by the fact that in 2007 it concluded a security pact — its only other being with the United States — with Australia, the US’s closest ally in the Asia-Pacific region. Though both unstated and denied, the obvious target of the agreement is China. [1025] Furthermore, as mentioned earlier, the terms of its security and defence arrangement with the United States have been significantly strengthened over the last decade. [1026] The most likely scenario is that Japan continues along this same path. For the Japanese it has the great advantage of enabling them to carry on with the status quo and postponing the day when they are required to engage in a fundamental rethink — by far the biggest since 1868 — of their relationship with China in particular and East Asia in general. In China ’s eyes, however, the US-Japan alliance is only the second worst solution, the worst — such are China ’s fears of Japanese history — being a Japan that increasingly aspires to become a military force in its own right. [1027] The latter process is also under way, but it is taking place slowly and within the context of Japan ’s alliance with the United States, rather than separately from it. In the long run, however, dependence on the United States may be unsustainable. The growing economic, political and military strength of China could at some point oblige the Japanese to rethink their attitude towards China in a more positive way, while the United States may also be persuaded at some stage that its relationship with China is rather more important than that with Japan and that its alliance with Japan should effectively be downgraded, shelved or abandoned. But any such outcome, should it ever happen, still lies far in the future. [1028] The one scenario that seems inconceivable is that Japan emerges as a stand-alone superpower to rival China: it is simply too small, too particularistic, too isolated and too weakly endowed with natural resources to be able to achieve this. [1029]

… AND THE ELEPHANT

The elephant in the room or, more precisely the region, is the United States. The latter is not even vaguely part of East Asia, being situated thousands of miles to its east, but with its military alliance with Japan, its military bases in South Korea and its long-term support for Taiwan, not to mention the Korean and Vietnamese wars, it has been the dominant power in the region ever since it replaced Europe in the 1950s. That state of affairs, however, has begun to change with remarkable speed. A combination of 9/11 and the new turn in Chinese foreign policy in East Asia, together with China’s emergence as the fulcrum of the regional economy — one of those accidental juxtapositions of history — has transformed Chinese influence in the region, while that of the United States, hugely preoccupied with the Middle East to the virtual exclusion of all else, it would seem, declined sharply during the Bush presidency. [1030] Given that the period involved has been less than a decade, the shift in the balance of power in the region has been dramatic. In a few short years, every single country has been obliged to rethink its attitude towards China and in every case — excepting Japan and Taiwan (though, since the election of Ma Ying-jeou as president, perhaps even there too) — has moved appreciably closer to it, including Singapore, the Philippines, Thailand and South Korea, all of which have formal bilateral alliances with the United States. [1031] China ’s star in the region is patently on the rise and that of the United States on the wane. [1032]

It would be wrong to assume that the future will be a simple extrapolation of these recent trends. The precipitous, for example, certainly cannot be excluded, especially in light of the open-ended nature of Sino-Taiwanese relations. Less apocalyptically, the process of change witnessed over the last decade could slow down, or alternatively perhaps accelerate. The United States could try to restrain the momentum and direction of that change by engaging in a more imaginative and proactive strategy towards East Asia under Obama. More speculatively, if relations between China and the US in East Asia should seriously worsen at some point in the future, the United States might seek to contain China. [1033] If this should happen, then it would inevitably have serious ramifications for their global relationship. [1034] But nor can the possibility be excluded that the US will in time become reconciled to its declining influence in East Asia. Should that be the case, there is little evidence so far to suggest that the region will become more unstable as a consequence: on the contrary, during the period that has coincided with China’s rise, East Asia has been, at least hitherto, strikingly conflict-free. Given that East Asia was characterized by long-term historical stability during the tributary period as a result of China ’s overwhelming power, this should not necessarily be regarded as surprising. [1035]

Figure 31. American troops in East Asia 2007.

Figure 32. Naval capability, 2007.

As things presently stand, China is already established as the dominant land power in the region, while the United States remains, at least for the medium term, the dominant regional maritime power. [1036] While this naval strength clearly serves to contain China’s power in the region, it is also a sign of the US’s increasing weakness, with land power an expression of China ’s growing economic and political clout and maritime power almost solely a function of the US ’s hard power. Indeed, it would seem that China is not so far away from achieving hegemony within the region in most respects (economic, political and cultural) other than military. By far the most important US ally in East Asia remains Japan, and, a little further afield, Australia is still an American intimate, notwithstanding its closer relationship with China. The US has also been working very hard to try to recruit India to its side. Between them these constitute a formidable counter to China, albeit ringing East Asia rather than, except in the case of Japan, being part of it. Both Russia and India overlap with and abut East Asia, and therefore can also be regarded as significant players in the region, but I will consider their relationship with China’s rise in the next chapter.