Adjusting to a rising China

"Malaysia, Cambodia and the Philippines," he said. 

"What about these three countries?" I asked. "Is this some kind of riddle?" 

"Ah", he smiled triumphantly, "let me tell you."  

Eric had just returned from a round of visits to Beijing, Taipei and Vietnam. He's a regular on the circuit of conferences on various political and macro-economic subjects, and at these meetings, he gets a fair degree of access to policy-makers. Thus, talking to him is always interesting and informative. 

But specifically, what we were talking about was the rise of China, and how the strategic environment in Asia is changing. To illustrate this, he pointed out that Malaysian Prime Minister Badawi's first official trip outside of the customary round of visits to fellow ASEAN neighbours, was to Beijing. Gloria Arroyo's first trip in her second term as President of the Philippines was also to Beijing. 

More recently, the new Cambodian King Sihamoni was in Beijing to visit his father, King Sihanouk, when he was chosen to succeed to the throne. Although it was a private family visit, Sihamoni had a high-profile official meeting with Chinese President Hu Jintao before travelling to Phnom Penh for the coronation. It was as if China's blessing was given before he could ascend the throne. 

Eric, in his papers, has occasionally floated the idea that the old Ming and Qing concept of tributary states around China's periphery was beginning to resurface. 

Of course, this is not unique to Asia or the Chinese sphere. In any part of the world, where a country is large and dominant, smaller states in its shadow had always to be careful about acknowledging the bigger power's superiority. Only the manner and form of diplomatic genuflection varied according to custom. 

What is unusual about our time and place is that we are at the cusp of a change-over. Increasingly, China will equalise its influence other Asia-Pacific states vis-à-vis the United States, with the potential of displacing it in the longer term. 

This applies beyond politics. Already, in economics, we can see the effects. Large Chinese companies are increasingly visible, and it won't be long before they're as ubiquitous as Japanese companies in Southeast Asia. 

The Chinese Yuan is now closely watched. The US budget and current account deficits, now at record highs under President George W Bush, are widely considered unsustainable. The US currency has to devalue, hopefully gradually. However, the Chinese Yuan is currently pegged to the US Dollar, and so long as this is so, it is difficult for other East Asian currencies to accommodate the needed adjustment of the US Dollar. So everybody is waiting of the Chinese to make the first move. To take the lead. 

Think back just 20 years to the mid 1980s, when China was still setting up Special Economic Zones such as Shenzhen because the rest of the country was a closed economy, and the changes we have seen are remarkable. 

Change tends to be unsettling. Those of us who have lived most of our lives under a Pax Americana and who have grown familiar with American culture, politics and business will not take too kindly to another superpower. It's only natural that we will prefer the devil we know to the one we don't. 

Worse yet, is China not a recidivist power, out to right ancient wrongs and take back territory lost through the centuries? For every "right" that China claws back, what will we lose? 

This fear may be overblown. Beijing has pledged "peaceful rising", and rationally speaking, China's paramount interest for a while yet is economic development. In this day and age, economic development must mean more and more integration with the global economy. China cannot position itself in any way that is antagonistic to the world order. 

The one area where China has been inflexible, almost strident, is with regard to Taiwan. The rhetoric has been worrying, and this gives rise to an image of an unreasonable, expansionist power. 

Nor does it help when the Chinese people too often whip themselves up into a frenzy over some slight to their national pride. We can recall the emotional reaction when the Chinese embassy in Belgrade was bombed by the Americans a decade ago. Likewise the public anger when an American reconnaissance plane intruded into Chinese airspace and was forced to land. 

More recently, there have been ugly demonstrations against the Japanese over their hiring Chinese prostitutes and some other slights in university dormitories. 

On August 7 this year, at the Asia Cup final, when the Japanese soccer team beat the Chinese 3-1, the Beijing crowd booed when the Japanese anthem was played. 

Sometimes, public frenzy served the government's purposes. Especially, when the Beijing government gradually abandoned their communist promises to the proletariat, it suited them to use militant nationalism to bolster their legitimacy. 

But, as Eric explained to me based on his private soundings, the Chinese government has realised that things have gone too far. This was especially after the Asia Cup incident. Partly, there is the fear that if such behaviour is condoned, the Chinese will get very bad press come the 2008 Beijing Olympics, but more importantly, the government now realises that over-the-top street sentiment will circumscribe their diplomatic manoevering room. 

There is hope yet that the strategic re-alignment to come will be a peaceful one.

© Yawning Bread 

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