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E DITE D BY
DAVID A R A SE
CH INA ’ S R I S E A N D
CH A NG ING O R D E R
IN E A S T A S I A
Politics and Development of Contemporary China

Series Editors

Kevin G. Cai
Renison University College
University of Waterloo
Waterloo, Canada

Guang Pan
Shanghai Center for International Studie
Shanghai Academy of Social Sciences
Shanghai, China

Daniel Lynch
University of Southern California
Los Angeles, California, USA
As China’s power grows, the search has begun in earnest for what super
power status will mean for the People’s Republic of China as a nation as
well as the impact of its new-found influence on the Asia-Pacific region
and the global international order at large. By providing a venue for excit-
ing and ground-breaking titles, the aim of this series is to explore the
domestic and international implications of China’s rise and transforma-
tion through a number of key areas including politics, development and
foreign policy. The series will also give a strong voice to non-western per-
spectives on China’s rise in order to provide a forum that connects and
compares the views of academics from both the east and west reflecting
the truly international nature of the discipline.

More information about this series at

http://www.springer.com/series/14541
 David Arase
Editor

China’s Rise and

Changing Order in
East Asia
Editor
David Arase
Johns Hopkins University
School of Advanced International Studies
Nanjing University
Nanjing, Jiangsu, China

Politics and Development of Contemporary China

ISBN 978-1-352-00022-1    ISBN 978-1-352-00023-8 (eBook)
DOI 10.1057/978-1-352-00023-8

Library of Congress Control Number: 2016959997

© The Editor(s) (if applicable) and The Author(s) 2016

This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the
publisher nor the authors or the editors give a warranty, express or implied, with respect to
the material contained herein or for any errors or omissions that may have been made.

Cover image © Andrew Dernie

Printed on acid-free paper

This Palgrave imprint is published by Springer Nature

The registered company is Nature America Inc.
The registered company address is: 1 New York Plaza, New York, NY 10004, U.S.A.
 Contents

Part I Introduction1

1 The Question of Regional Order in East Asia3

David Arase

Part II China Rising35

2 China and East Asian Cooperation: Fundamental

Bottlenecks, Recent Problems, and New Orientations37
Yinhong Shi and Caizhen Han

3 Remapping Asia’s Geopolitical Landscape:

China’s Rise, US Pivot, and Security Challenges
for a Region in Power Transition49
Jingdong Yuan

4 Sino-US Strategic Convergence and Divergence

in East Asia63
Bin Shi
vi Contents

5 The USA and Challenges to East Asia’s Security Order89

Zongyou Wei

6 How Stable Is China’s Economy?107

Paul Armstrong-Taylor

Part III Northeast Asia123

7 US-China Rivalry and South Korea’s Strategy125

Chaesung Chun

8 Formation of Regional Community in East Asia:

A Japanese Perspective145
Kazuhiko Togo

9 Rebuilding Sino-US Cooperation Over North Korea

Nuclear Issue161
Jishe Fan

10 Pathways to a Northeast Asian Energy Regime173

Gaye Christoffersen

Part IV Southeast Asia197

11 The Meaning of ASEAN in the Regional Security

Architecture199
Quang Minh Pham

12 South China Sea Disputes: Litmus Test for

China’s Peaceful Rise—How US Scholars View
South China Sea Issues217
Li Xue
 Contents  vii

13 The ASEAN-Centred Cooperative Security

Regime in Asia225
Daljit Singh

Part V Indian Ocean Region241

14 The China-India-USA Engagement in the Asia-Pacific:

Security Implications for East Asian Regionalism243
Li Zhang

15 India’s Growing Role in East Asia259

Mahendra Gaur and Sylvia Mishra

Index277
 Note on Contributors

David Arase is resident professor of international politics at the Hopkins-­

Nanjing Center of the Johns Hopkins University—School of Advanced
International Studies. The Hopkins-Nanjing Center is located at Nanjing
University, Nanjing, China.
Paul Armstong-Taylor is resident professor of economics at the
Hopkins-Nanjing Center of the Johns Hopkins University—School of
Advanced International Studies. The Hopkins-Nanjing Center is located
at Nanjing University, Nanjing, China.
Gaye Christoffersen is resident professor of international politics at the
Hopkins-Nanjing Center of the Johns Hopkins University—School of
Advanced International Studies. The Hopkins-Nanjing Center is located
at Nanjing University, Nanjing, China.
Chaesung Chun is professor in the Department of International
Relations at Seoul National University and director of the Asian Security
Initiative at the East Asian Institute in Seoul, South Korea.
Jishe Fan is director of the Division for Strategic Studies and deputy
director of the Center for Arms Control and Non-proliferation Studies at
the Institute of American Studies of the Chinese Academcy of Social
Sciences in Beijing, China.
Mahendra Gaur is director of the Foreign Policy Research Centre in
New Delhi, India.
x Note on Contributors

Caizhen Han is professor in the Department of International Relations

at Renmin University in Beijing, China.
Sylvia Mishra is editor of the Foreign Policy Research Center Journal in
New Delhi, India.
Quang Minh Pham is vice rector of the University of Social Sciences and
Humanities in the National University of Vietnam in Hanoi, Vietnam.
Bin Shi is professor at the Hopkins-Nanjing Center and in the School of
Government at Nanjing University, Nanjing, China.
Yinhong Shi is a member of the State Council of China as well as profes-
sor and director at the Center for American Studies in the Department of
International Relations at Renmin University in Beijing, China.
Daljit Singh is the coordinator of the Regional Strategic and Political
Studies Program in the Yusuf Ishak Institute of Southeast Asian Studies in
Singapore.
Kazuhiko Togo is director of the Institute for World Affairs at Kyoto
Sangyo University in Kyoto, Japan. He is a former ambassador and retired
Japan Ministry of Foreign Affairs official.
Li Xue is director of the Strategic Research Office in the Institute of
World Economy and Politics of the Chinese Academy of Social Sciences in
Beijing, China.
Zongyou Wei is professor and vice dean of the Institute of International
and Diplomatic Affairs at the Shanghai International Studies University in
Shanghai, China.
Jingdong Yuan is associate professor in the Centre for International
Security Studies at the University of Sydney in Sydney, Australia.
Li Zhang is professor in the South Asia Research Institute of Sichuan
University in Chengdu, China.
 List of Figures

Fig. 6.1 Growth in credit and shadow banking in China 109

Fig. 6.2 International comparisons of China’s shadow banking system 110
Fig. 6.3 Structure of shadow banking of China 111
Fig. 6.4 Exports to China as percentage of GDP 117
Fig. 6.5 Financial exposure to China 118
 List of Tables

Table 7.1 US-China relationship in different power games 135

 PART I

Introduction
 CHAPTER 1

The Question of Regional Order

in East Asia

David Arase

The New Regional Agenda: Adjusting to China

as a Great Power

Every state in East Asia desires continuing peace and development. But
all of them must deal with conflicts of interest that touch their vital inter-
ests. The successful management of such conflicts has maintained regional
stability and permitted the region to share growth and development. The
key has been a regional order that finds its origin in the post-World War
II era of US hegemonic power. From the start of the Cold War, the USA
constructed a liberal international order for its allies and friends based on
free trade for all within the sphere of US strategic dominance.
China defected from the Soviet block from 1971 and, after setting
out on reform and opening up under Deng Xiaoping, it gained inclusion
into the liberal free trade order. After the Soviet Union collapsed and left
the USA predominant in a unipolar global structure of power, the lib-
eral international order accommodated the former communist states. This
globalized liberal order gave the USA an integral economic and strategic

D. Arase (*)
Hopkins-Nanjing Center for Chinese and American Studies, Nanjing, China

© The Author(s) 2016 3

D. Arase (ed.), China’s Rise and Changing Order in East Asia,
DOI 10.1057/978-1-352-00023-8_1
4 D. ARASE

presence in every world region. Not all states accepted this US-sponsored
global order, but very few chose to directly challenge it.
However, the rise of China to great power status is transforming
the international structure of power from unipolarity to bipolarity, first
of all at the regional level, which is the concern of this book. Some
might argue that China is not yet fully qualified as a global power
(Shambaugh). But there is no denying that China now wants to be
recognized as a great power, and that all of its neighbors already treat it
that way. China’s GDP has already surpassed that of the USA in terms
of real production (measured in purchasing power terms); and though
its growth is now dipping below 7 percent, its growth remains at least
twice as fast as US growth, so its margin of superiority will widen in
the foreseeable future. It is already without doubt the predominant
economic and military power among Asian nations, and not only does it
envision a new regional order, which it calls a “Community of Common
Destiny,” but it also offers to provide public goods to realize it, such as
its One Belt-One Road (OBOR) initiative to build economic corridors
radiating out from China to integrate all of Eurasia with the Chinese
economy; and the Asian Infrastructure Investment Bank designed to
help finance the OBOR.
The new rise in power of China restructures not only the world and
greater East Asia, but also each of East Asia’s subregions, where parties
locked in local conflicts must now adjust their respective strategies. This
kind of change occurring at all levels simultaneously can be destabilizing.
Contributors to this volume look at the effects of China’s rise, examine
the implications for regional order, and assess the future outlook at three
levels, that is, the greater East Asian region; relevant Asian subregions; and
regional institutions. Each contributor is an internationally recognized
expert, and together they present a variety of regional perspectives on
how China’s rise is affecting the prospects for stability.

Region, Regionalism, and Regional Order

in East Asia

We think of the East Asian region as a network of states with interdepen-

dent economic and security relations. At its core are the ten member states
of the Association of Southeast Asian Nations (ASEAN) and the Northeast
Asian states of China, Japan, and the two Koreas. But the network of criti-
cally interdependent relations extends outward to include countries such as
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