China: middle kingdom, world centre
China has announced that the yuan will no longer be pegged to the dollar; greater currency flexibility will permit Beijing to use monetary policy to control its economy. And the entry of its enormous labour force into the global economy will change the world balance of trade. China wants to bypass the Japanese-United States alliance in Asia and at the United Nations, and, through asymmetrical diplomacy, become a different kind of world power.
By Martine Bulard
THE meaning of a sentence in Chinese is determined by the order of the words rather than the words themselves. Chinas geopolitical strategy operates on the same principle. From Beijing to Shanghai, among government representatives and their prominent advisers, and among academics, there is no escaping the latest catchword: stability.
But to understand its true meaning, it must be seen in the context of a country that is perpetually on the move: where members of the government now travel abroad to an unprecedented extent; where the universities, more open than ever to the outside world, have a new role as government research centres, some of them funded by foreign donors. The Centre for International Studies occupies three ultramodern blocks in the prestigious University of Beida in Beijing, one sponsored by a wealthy Hong Kong businessman, one by an Italian company, and one by a Hong Kong firm. Three architects were employed but the result is a harmonious whole that fits perfectly with its historic setting (1). Opening up does not mean giving up. And stability is not the same as immobility.
The foreign ministry spokesman, Kong, in his office opposite the Feng Lian plaza with its flourishing luxury shops, inaccessible to most Chinese, explains: China wants above all to promote a stable environment, conducive to development.Several hundred kilometres away, in the new premises of the Centre for American Studies in the famous University of Fudan in Shanghai, funded partly by the United States Agency for International Development, even the great nuclear expert, Professor Shen Dingli, who usually avoids clichés, cannot escape the obligatory reference to stability. Nothing frightens him more than the possibility of destabilisation in Korea, which has a common border with China, or in the Middle East, which supplies almost half of Beijings oil imports.
He explains what has been called the diplomacy of the status quo. For Beijing, order, even US order, even relatively unfavourable order, is preferable to chaos, which would thwart Chinas plans for growth and global ambitions. Growth is the basis of the social contract with the people that keeps the regime in power through thick and thin. The global ambitions, in the words of Kong, are to restore China to its proper place on the international stage. Rather more vocal and active today than yesterday, but much less than it will be tomorrow, as its power increases.
Contrary to the general view, Chinas diplomacy is not guided entirely by economic considerations, by the need to satisfy its hunger for raw materials or grain. Of course, international relations have a contribution to make in securing energy and food supplies. But the economy is part of a much wider vision China has of its role in the region and the world. The economy is part of the peaceful armoury essential to recognition on the international stage. Look at the history of the past 500 years, you are told. Without a strong economy, a nation has no say.
In the recent past, three events have had a significant impact on Chinese thought. The first was Tiananmen Square in 1989, still a taboo subject in the press (2). The trauma has nothing to do with any possible challenge to the regime: opposition parties are still banned, although intellectuals now have more freedom of movement. It is frequently emphasised that the trouble results from the price for Tiananmen that had to be paid to the outside world, starting with the western embargo imposed when the Soviet Union was no longer able to supply Beijing with hi-tech equipment, especially for military purposes.
The shock of Tiananmen signalled the beginning of the end of the honeymoon (miyue) with the US, which had lasted for almost 20 years, from the Peoples Republic of China replacing Taiwan in the United Nations on 25 October 1971 and President Nixons visit to China in 1972, to the establishment of a strategic partnership instrumental in Chinas development. This period was followed by disappointments, a number of incidents (including the 1999 bombing of the Chinese embassy in Belgrade) and the strengthening of US links with Chinas hated and despised competitor, Japan.
The second crucial event was the collapse of the Soviet Union. There were no regrets over the disappearance of this rival communist regime but many academics recall that the USSR wore itself out in a fruitless confrontation with the US and a financially ruinous arms race. According to an anonymous defence expert: The US presses for competition and an uncontrolled increase in military spending but we should confine ourselves to modernising the weapons required to strengthen our defences. This counsel of moderation is more show than substance, since military spending already accounts for 2.4% of Chinas GDP, but it is worth deploying against the general staff, which would like it to be much higher.
Ultimately, according to Chinese diplomats, it was the division of the world into two camps that proved so costly. While they all deplore the unipolar order represented by the US, none of them wants to return to a bipolar world. There is no question of China becoming the leader of the developing countries, a role that would entail sacrifices.
We share the wish of many developing countries for the democratisation of the international organisations, says Kong, who stresses the importance of relations with Africa (3) and Latin America, but there is no question of our constituting a pole. We must get away from our cold-war mindset and I prefer to speak of shared development. We must establish a habit of negotiation, which implies mutual concessions. The rapid expansion of trade will be accompanied by an increasing number of disputes. We must approach them in a spirit of negotiation - not a spirit dictated by the system.
The government proposes to participate in the establishment of a multipolar world in which China would one day occupy an important place - in the centre, not at the head. It wants to shine, not dominate. This is not a purely formal distinction (4). At the height of its power, from the 11th to the 17th century, China had the largest fleet in the world, and many real and exceptional economic and technological advantages (5), but, unlike the Europeans, it never destroyed peoples or civilisations.
The third crucial event was the Chinese authorities response to the financial crisis that rocked Asia in 1997-98. China was the only country to keep exchange controls and resist the pressure from the International Monetary Fund (6), and the only one to retain some chance of growth when all the others, including Japan, were affected by the general slump. Better still, with the yuan tied to the dollar, it helped to establish a degree of stability in a region that was facing financial disaster. It even went so far as to grant low-interest loans or aid to several of the tiger economies that were in trouble.
The next generation that came to power in China built a strategy based on President Hu Jintaos four nos: No to hegemony, no to force, no to blocs, no to the arms race (7). And yes to confidence building, reducing difficulties, developing cooperation, and avoiding confrontation. Conscious of its weaknesses set against the US giant and its competitors in Asia, Beijing engages in a highly mobile asymmetrical diplomacy, favouring bilateral relations but also participating actively in regional organisations, seeking to establish economic links with everyone and reduce past territorial tensions.
China and Russia signed an agreement at Vladivostok on 2 June 2005 to settle a dispute over 2% of their 4,300km common border that had poisoned relations since the end of the second world war. As President Vladimir Putin observed during the closing phase of the negotiations: This is the first time in the history of Sino-Russian relations that the whole of their common border has been legally defined.
On 11 April 2005 the Indian prime minister, Manmohan Singh, and his Chinese counterpart, Wen Jiabao, signed a protocol to settle a boundary dispute between the two countries that dates from 1962: Beijing claims a substantial part of the territory of the state of Arunachal Pradesh (90,000 sq km) in northeast India; and in the northwest New Delhi claims Aksai Chin, which is part of Kashmir (38,000 sq km). The negotiations have only just started, says Kong, but this is the first time the question of boundaries has been addressed in an official document. A historic step, which Beijing would like to consolidate by establishing a free-trade area embracing the demographic giants (see India and China ).
These new relations inevitably affect Chinas links with its old allies, notably Pakistan. Our position on its conflict with India tends to be neutral, was the view of the deputy director of the Centre for Asia-Pacific Studies at the University of Beida in Beijing, Yang Baoyun. According to him, Islamabad had benefited from the tension for many years but attitudes were beginning to change - as witness the restoration of the bus service across Kashmir, which had been closed for 60 years (8).
Another sign of the peaceful emergence of China is its involvement in the crisis in October 2002 between the US and North Korea, which has declared that it is now ready to produce an atomic bomb. Beijing was the moving force behind the group of six (China, South Korea, North Korea, Japan, Russia and the US) formed to settle the dispute, and it is doing all it can to cool Pyongyang, stoked by the inflammatory statements of the Bush administration.
The prospect of a nuclear power in the Korean peninsula is not something Beijing relishes, and Yang confidently asserts that, if Pyongyang were to start tests, we would cut off aid. But opinion is divided on the question of pressure. Some think aid should be cut, at least to some extent, and they recall that once before, in 2004, a fortuitous technical incident caused an interruption in the flow of oil and forced President Kim Jong-il to resume negotiations (9). Others, like Professor Shen Dingli, take the opposite view, that to stop aid would destroy all hope and drive [an already disastrous regime] to extremes.
Korea is a detestable burden, says a former diplomat, a regime in which people are dying of starvation to keep a dynasty in power. But China is stuck. It can neither advance nor retreat. Sections of the army toy with the idea that nuclearisation is not all that serious and Korea was and is Chinas sentinel in the event of conflict. Beijing has proved, if not to Washington at least to its neighbours, that it is capable of moving on from its old alliances and engaging in active diplomacy. Consider the moves to strengthen its links with the former ally of the US, South Korea, which fears destabilisation from the North. (Germanys difficulties in absorbing the east have induced a certain caution about the neighbouring dictatorship (10).)
The real thorn in the Chinese tigers side is Japan. Yang is alarmed. At no time in the past 30 years have relations between us been as bad as they are now, he says. This was confirmed by everyone we spoke to. Many cited Japans refusal to face its own history, the incident of the book that played down Japanese crimes during the occupation of China, and prime minister Junichiro Koizumis visit to the Yasukuni shrine, where war criminals are buried.
China is not always clear and critical about its own history but a visit to the Shenyang museum in northeast China, main focus of the Japanese occupation, helps to explain its feelings about Japan. It contains an account of the murders, tortures and medical experiments carried out by the Japanese armies from 1931, together with recent explicit denials of these events made by prominent Japanese personalities (11). Here, as in Beijing, if you mention the anti-Japanese demonstrations in spring 2005, which were mostly orderly student demonstrations, with almost no worker participation, people reply: What would you say in France if a German leader went to pay his respects at the tomb of some war criminal?
Washingtons deputy sheriff
Besides the territorial problems over the islands known to the Japanese as the Senkaku and to the Chinese as the Diaoyu, which are of strategic importance to maritime control, the strengthening of the military links between Washington and Tokyo is also a source of concern. According to Professor Kazuya Sakamoto of the University of Osaka, After 60 years spent keeping its head down, Japan appears destined to supplant Australia as Washingtons deputy sheriff in the Asia-Pacific region and become a pillar of Americas 21st-century security architecture (12). The revision of the Japanese constitution (13), the decision to send troops to Iraq, and the transfer of US 1st Army Corps command (for operations in the Pacific and the Indian Ocean) from the west coast of the US to Camp Zama, south of Tokyo, lend some credibility to this contention (14). This is the crux of the special triangular relationship between China, the US and Japan.
Washington also supports Japans application for admission as a permanent member of the UN Security Council, immediately rejected by China, which is threatening to use its veto. As Chinas ambassador to the UN, Wang Guangya, pointed out in a statement on 26 June 2005: Japan will have to obtain a consensus in its region before it can think of sitting on the Security Council. Beijing hopes to win its case with the support of South Korea, which has protested vehemently against Koizumis militarist sympathies (15), India, which would like to have a seat on the Security Council, and the African countries with which China has strong economic links.
The mention of Taiwan in the revised version of the bilateral security agreement between the US and Japan (16) was the last straw. Japan had avoided this issue since Sino-Japanese relations were normalised in 1972 and the US had its own formula for dealing with the question - one country, two systems. The integration of Taiwan into China may take a hundred years or more, according to one diplomat, but their separation is impossible, unacceptable to the people, the army and the government.
The tough talk of recent months and the anti-secession law adopted in April 2005 are more defensive than aggressive, intended to draw a line that Taiwan and its allies must not cross. Although it is generally recognised that the political, diplomatic and economic costs of a military operation would be much too high, General Zhu Chenghu did not hesitate to state in July 2005: If the Americans fire on Chinese territory, we shall be obliged to respond with nuclear weapons. He was speaking in a personal capacity but the statement has not been denied. Beijing hopes that the 2008 Olympics will mark a turning point for the region and the world, and the government apparently fears that Taipei will declare independence on the eve of the games. Hence the threats, and the attempts to win hearts and minds.
The leaders of the Kuomintang, old enemies who had not set foot in China since 1949 (17), were received in May with great ceremony. Hu Jintaos recent tour of Latin America, ostensibly to secure supplies of oil (Venezuela), raw materials, grain and soya (Cuba, Mexico, Brazil), was also designed to make it clear to those (notably in Central America) that still have close links with Taipei, that China offers a much bigger market. Meanwhile the Chinese leadership is relying on the 8,000 Taiwanese businessmen who have investments in China to exert pressure on the Taipei government. The Bush administration has finally managed to quell its allys passion for independence and Japan is showing more discretion.
But the rivalry persists. A former diplomat said: There have been times, in the history of the region, when China was strong and Japan was weak, and times when the reverse was the case. Now China and Japan are going to be on an equal footing, and Japan is suddenly thrown off balance. The old order is in turmoil but a new balance of power has not yet emerged. China is the main Asian supplier of the US, ahead of Japan; it ranks second, just behind Japan, in currency reserves - US treasury bonds - but its gross domestic product is two and a half times lower than Japans. It may warn Washington that it will stop acting as banker and will sell dollars, but then Tokyo would immediately come to the rescue.
This unequal balance of power does not preclude competition. While Japan hopes to emerge from its status as a political pygmy and consolidate its role as world leader in Asia (and permanent member of the Security Council, a development that would entail rearmament, to the dismay of all its neighbours, not just China), China wants to assert its role as Asian leader. Hence the rush to join multilateral organisations. Its accession to the World Trade Organisation in 2001 was crucial to its success. It won over the Association of Southeast Asian Nations (Asean), a cold-war outfit (18), advancing from observer status in 1991 to active participation (19), and getting agreement in November 2004 for the establishment of a free-trade area with Asean (20).
In Central Asia the establishment of the Shanghai Cooperation Organisation (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) in June 2001 witnessed its commercial objectives, including fuel supplies. The initiative has taken a highly political turn since the war in Afghanistan. China shares Russias concern over the establishment of US bases in the region, and the concern of other republics about the movements of people deemed to be Islamic fundamentalists, notably Chinese Muslim Uighurs. The determination to crush opposition, as seen recently in Uzbekistan, leaves China relatively unmoved.
In the words of US expert David Shambaugh, Bilaterally and multilaterally, Beijings 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 neighbour, a constructive partner, a careful listener, and a non-threatening regional power (21). Is it possible to speak of the Beijing consensus (22) as a new model for development, as Joshua Cooper Ramo, member of the Council on Foreign Relations in the US and the Foreign Policy Centre in Britain, suggests? Can China become the leading country in an Asian economic and political union? It lacks the necessary economic means: two-thirds of its exports are generated by foreign companies established in Chinese territory, content to assemble products designed elsewhere.
China has cornered a few important niche markets, such as in optical fibres and mobile phones, and it is keen to extend its range by attracting foreign research centres and buying firms to acquire well-known trademarks and reap the benefits of technology transfer. But its growth, strong but still at the mercy of a vulnerable financial system, depends on the Asean countries and Japan for production and on western countries for exports (23). The smallest brush with the US could halt its dynamic progress and be politically explosive.
That does not prevent some experts from dreaming of a Sino-Japanese alliance, like the Franco-German alliance in Europe. Japanese, Chinese and Korean intellectuals were at a colloquium in Beijing (24) at the time of the anti-Japanese demonstrations in spring 2005. A school textbook, produced by historians of the three countries, was published in June. But while the US may be prepared to delegate more of its regional power as a military umbrella, it is unlikely to accept Japan as a strong regional power, much less China.
China wants rapid progress, not chaos. But, as a diplomat explains, It can only shine if its culture is attractive, as our language once was. It is not enough to be merely a consumer. We must invent our own values, not copy those of the West. Work is being done but there is no public arena for debate. The danger, as the diplomat says, is that by denying political freedom, China may be denying itself.