China’s Power and Asian Security

One of the most significant factors for contemporary international relations

is the growth of China’s economic, military, and political power. Indeed,
few analysts would dispute the observation that China’s power has strongly
influenced the structure of the international system, major-power strategic
relations, international security, the patterns of trans-border economic
activities, and most importantly, the political and security dynamics in Asia
in the twenty-first century.
This book maps the growth of China’s political, economic, and military
capabilities and its impact on the security order in Asia over the coming
decades. While updating the emerging power dimensions and prevailing
discourse, it provides a nuanced analysis of whether the growth of Chinese
power is resulting in Beijing becoming more assertive, or even aggressive,
in its behavior and pursuit of national interests. It also examines how the
key Asian countries perceive and react to the growth of China’s power and
how US rebalancing would play out in the context of Beijing’s political,
economic, and military power.
China’s Power and Asian Security will be of huge interest to students and
scholars of Asian politics, Chinese politics, security studies, and
international security and international relations more generally.

Mingjiang Li is Associate Professor and Coordinator of China Program in

the S. Rajaratnam School of International Studies, Nanyang Technological
University, Singapore.
Kalyan M. Kemburi is Associate Research Fellow in the S. Rajaratnam
School of International Studies, Nanyang Technological University,
Singapore.
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Hegemony or community?
Edited by Yong Wook Lee and Key-young Son

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China’s Power and Asian Security

Edited by Mingjiang Li and Kalyan M. Kemburi
China’s Power and Asian Security

Edited by Mingjiang Li and Kalyan M.

Kemburi
First published 2015
by Routledge
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and by Routledge
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© 2015 selection and editorial matter, editors; individual chapters, the contributors.

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

China’s power and Asian security / edited by Mingjiang Li and Kalyan M. Kemburi.
pages cm. – (Politics in Asia)
Includes bibliographical references and index.
1. Security, International–Asia. 2. China–Foreign relations–21st century. 3. China–Economic
conditions–2000– 4. China–Foreign economic relations. 5. China–Military policy. 6. China–
Foreign relations–Asia. 7. Asia–Foreign relations–China. I. Li, Mingjiang, editor of compilation.
II. Kemburi, Kalyan M., editor of compilation.
JZ6009.A75C55 2014
355′.03305–dc23 2014021430

ISBN: 978-1-138-78279-2 (hbk)

ISBN: 978-1-315-76901-1 (ebk)

Typeset in Times New Roman

by Wearset Ltd, Boldon, Tyne and Wear
Contents

List of figures
List of tables
Notes on contributors

Part I
China’s power: capabilities and perceptions

1 Growth of China’s power: capabilities, perceptions, and practice

MINGJIANG LI, KALYAN KEMBURI, AND ZHANG HONGZHOU

2 The rise of China and the emerging order in Asia

JINGDONG YUAN

3 China’s military buildup: regional repercussions

RICHARD A. BITZINGER

Part II
China’s power and US strategic rebalance: Chinese and
American perspectives

4 China’s assessments of U.S. rebalancing/pivot to Asia

 WANG DONG AND YIN CHENGZHI

5 China’s rising power and the U.S. rebalance to Asia: implications

for U.S.–China relations
PHILLIP C. SAUNDERS

Part III
China’s power: security order in Asia

6 Peripheral South Asian response to the growth of Chinese power:

a study in dichotomous continuity
MAHMUD ALI

7 India’s perceptions and responses to the growth of Chinese power

RAJESWARI PILLAI RAJAGOPALAN

8 Canberra’s Beijing balance: Australian perceptions of and

responses to Chinese power
RORY MEDCALF

9 Facing the challenges: ASEAN’s institutional responses to China’s

rise
KAI HE

10 Evaluating Southeast Asian responses to China’s rise: the vital

context of managing great power resurgence
EVELYN GOH

11 China–Central Asia: a new economic, security, and logistic

network
ALESSANDRO ARDUINO
12 China’s challenges in accommodating both Koreas
CHOO JAEWOO

13 The rise of China and Japan’s foreign policy reorientation

KEN JIMBO

14 The changing security dynamics in Northeast Asia and the US

alliances with Japan and South Korea: toward synchronization
HIROYASU AKUTSU

Index
Figures

1.1 China, United States and Japan, GDP comparison (current US$)
1.2 China, United States and Japan, GDP comparison (PPP)
1.3 Total foreign trade of China and United States
1.4 Projected GDP growth paths of China and United States
7.1 Map of Qinghai–Tibet Railway Map
13.1 Japan–China trade and Japan–US trade volumes
13.2 Flow of Japan’s diplomatic concepts in 2006–2012
Tables

1.1 Foreign aid and foreign direct investment, 2012

1.2 Ground forces
1.3 Air forces
1.4 Naval forces
3.1 Recent major Asian-Pacific arms acquisitions
4.1 Academic and policy discourses in China regarding U.S.
“returning/pivot/rebalancing” to Asia, 2009–2012
5.1 U.S. and Chinese 2008 trade with Asia-Pacific countries
5.2 U.S. and Chinese 2012 trade with Asia-Pacific countries
5.3 U.S. direct investment stock in Asia-Pacific
5.4 U.S. military rebalance to Asia by service
5.5 U.S. military rebalance to Asia by partner
7.1 India–China bilateral trade, 2008–13
7.2 References in Indian technical journals to Chinese systems and
themes
7.3 References in Indian strategic journals to Chinese systems and
slogans
13.1 Nominal GDP of Japan, China and United States, 2010–2030
13.2 Military spending of Japan, China and United States, 2010–2030
14.1 The US–Japan alliance and the US–ROK alliance: objectives,
capabilities, and on-going issues in brief comparison
14.2 Approaches to North Korea and China: Japan and South Korea in
brief comparison
14.3 Categories of Acquisition and Cross-Servicing Agreement (ACSA)
14.4 Examples of areas of joint training/exercise
Contributors

Hiroyasu Akutsu is a Senior Fellow and Professor at the National Institute

for Defense Studies (NIDS) in Tokyo.
Mahmud Ali is an Associate at the East Asia International Affairs
Programme run by the London School of Economics and Political
Science (LSE IDEAS).
Alessandro Arduino is the Co-director for Security and Crisis
Management Program, Shanghai Academy of Social Sciences (SASS)–
Center for Advanced Studies on Contemporary China (CASCC).
Richard A. Bitzinger is a Senior Fellow and Coordinator of the Military
Transformations Program at the S. Rajaratnam School of International
Studies, Nanyang Technological University, Singapore.
Choo Jaewoo is a Professor of Chinese Foreign Policy at Kyung Hee
University and a Visiting Fellow at the Brookings Institute.
Evelyn Goh is the Shedden Professor of Strategic Policy Studies, Strategic
and Defence Studies Centre, Australian National University.
Kai He is an Associate Professor at the Department of Political Science,
University of Copenhagen.
Ken Jimbo is an Associate Professor at the Faculty of Policy Management,
Keio University and concurrently a Senior Research Fellow at the
Tokyo Foundation and the Canon Institute for Global Studies.
Kalyan Kemburi is an Associate Research Fellow at the S. Rajaratnam
School of International Studies, Nanyang Technological University,
 Singapore.
Mingjiang Li is an Associate Professor and Coordinator of the China
Program at the S. Rajaratnam School of International Studies, Nanyang
Technological University, Singapore.
Rory Medcalf is the Director, International Security Programme at the
Lowy Institute for International Policy, Australia.
Rajeswari Pillai Rajagopalan is a Senior Fellow with the Observer
Research Foundation, India.
Phillip C. Saunders is the Director of the Center for the Study of Chinese
Military Affairs and a Distinguished Research Fellow at the Center for
Strategic Research, part of National Defense University’s Institute for
National Strategic Studies.
Wang Dong is an Associate Professor with the School of International
Studies and Director for Center for Northeast Asian Strategic Studies,
Peking University, China.
Jingdong Yuan is an Associate Professor with the Department of
Government and International Relations, University of Sydney.
Zhang Hongzhou is an Associate Research Fellow at the S. Rajaratnam
School of International Studies, Nanyang Technological University,
Singapore.
Part I
China’s power
Capabilities and perceptions
1 Growth of China’s power
Capabilities, perceptions, and practice*

Mingjiang Li, Kalyan Kemburi, and Zhang

Hongzhou

Power is one of the most contested concepts in the field of social sciences. In
the middle of the last century, the academic definition of power transitioned
from the power-as-resources approach to the relational power approach,
whereby power is not just conceived on basis of absolute capabilities but as
an ability of A to cause a change in the behavior of B. Nevertheless, power-
as-resources is still a preferred definition within the policy community for its
concrete measurable indicators. One main problem with this approach is that
a particular power capability could be an asset in one situation, but a liability
in a different situation. To illustrate, during Operation Iraqi Freedom, the
weapon systems that aided the US forces in achieving a rapid victory against
the Iraqi regular forces faced limitations in dealing with the insurgents
fighting in an urban environment.
One of the most significant factors for contemporary international
relations is the growth of China’s economic, military, and political power. In
recent decades, following the power-as-resources approach, several scholars
and government agencies have extensively documented this phenomenon.
As intentions are hard to predict, the key in understanding the impact of
China’s growing power is to evaluate Beijing’s ability to convert these
power resources into behavioral outcomes in the target states. This edited
volume intends to undertake this evaluation.
Three decades of continuous high economic growth has provided Beijing
the means to engage in the qualitative and quantitative expansion of its
power resources. In the military arena, for instance, China’s US$132 billion
defense spending in 2014 is the highest in Asia and comes only after the
United States globally.1 Although the Chinese military—People’s Liberation
Army—has a long march to match the technological sophistication of the US
military or even the Japan Self-Defense Forces, it has been successful in
creating pockets of technological excellence and in acquiring platforms to
conduct asymmetrical warfare. To enable the People’s Liberation Army
(PLA) with regional as well as long-distance power projection and ensure its
rapid deployment of ground forces, there has also been a steady induction of
sophisticated weapon systems ranging from nuclear submarines, aircraft
carriers, fourth generation aircraft, to space-based systems and capabilities.
Historically, the study of international relations has predominantly
focused on military force with relative neglect of economic statecraft. To
close the gap, this volume includes the economic power of Beijing. As
Samuel Huntington noted, “Economic activity is probably the most
important source of power … in a world in which military conflict between
major states is unlikely [and] economic power will be increasingly important
in determining the primacy or subordination of states.”2 Further, as a
Singapore-based newspaper the Straits Times noted in 2009, “The new great
game in Asia is centered less on military power, but more on the complex
exercise of winning friends and influencing people and thought.”3 Economic
tools such as trade, aid, and investments increase the potential for success in
this complex exercise of winning friends and influencing ideas. Although
economic tools cost more than diplomacy or propaganda, they cost less
financially and politically and even result in less collateral damage compared
to military tools for a region under the shadow of nuclear weapons.
In the case of China, the world has been in awe over Beijing’s double-
digit economic growth for almost three decades, and its success in lifting
more than 600 million people out of poverty, in establishing a world-class
infrastructure, and in emerging as the global assembly line. In 2012, China
emerged as the world’s largest trading nation with a trade volume of
US$3.87 trillion.4 Beijing has secured a critical position in Asia by being the
largest trading partner for Japan, South Korea, India, and Southeast Asia.
Scholars, however, have paid little attention to the evaluation of the utility
and the scope of economic power behind such achievements. Although
globalization has made the world less coercible and has created economic
interdependencies, as Joseph Nye highlighted, “manipulating the
asymmetries of interdependence is an important dimension of economic
power.”5
In tune with the going-out policy, China’s outward direct investment
(ODI) grew from US$5.5 billion to over US$77 billion yearly from 2004 to
2012, and is expected to reach US$150 billion by 2015.6 In 2009 and 2010,
two Chinese state-owned banks extended more loans to developing countries
than the World Bank.7 Similarly, China has emerged as an important global
aid donor. As with its defense budget, estimating China’s aid has been
difficult. According to the Center for Global Development, a Washington,
D.C.-based think tank, Beijing’s aid estimates range from US$1.5 billion to
US$25 billion in 2009. Most of this aid is channeled to infrastructural and
developmental projects. Nevertheless, aid has the potential to create hard
economic power, especially when it is used to build economic and
administrative capabilities of the recipient nation.
Few analysts would dispute the observation that China’s power has
strongly influenced the structure of the international system, major-power
strategic relations, international security, the patterns of trans-border
economic activities, and most importantly, the political and security
dynamics in Asia in the twenty-first century. Many observers believe that
China’s growing power goes hand in hand with its assertiveness in handling
key security issues in Asia, for instance the South China Sea dispute. As a
result, the tone of recent media reports, scholarly writings, and foreign
government documents on China’s role in regional security is predominantly
pessimistic. Many have observed that growing Chinese economic power has
contributed to a dual regional structure in Asia whereby China takes the lead
in regional economic development while the United States is responsible for
security and stability. This situation has put pressure on regional states to
take sides between Beijing and Washington. The impetus for Washington’s
strategic rebalance towards Asia is at least partially in response to China’s
growing regional economic and political influence, if not security challenge.
This volume maps the growth of China’s political, economic, and military
capabilities and its impact on the security order in Asia over the coming
decades. The strength of this edited volume lies in its geographic
comprehensiveness and thematic uniqueness. This volume is also timely
because it captures Beijing’s increasing confidence (assertiveness
particularly during 2008–2011) in using its political, economic, and military
resources to pursue its national interests in Asia. This volume also contains
extensive updates on the emerging power dimensions and the prevailing
discourse.
With these updates, this volume contains works that attempt to unravel
three puzzles:

• Does the growth of Chinese power bring about Beijing’s increasing

assertiveness in its pursuit of national interests?
• How do the key Asian countries perceive and react to the growth of
China’s power?
• How would US rebalancing play out in the context of Beijing’s
political, economic, and military power?

The following section provides an overview of the concept of power in

China, starting from Sun Zi’s Art of War, Mao Zedong’s On Protracted
Warfare, to Deng Xiaoping’s emphasis on developing economic capabilities,
and the recent development of the concept of Comprehensive National
Power. With this historical background, in the second section we map the
recent growth in economic and military capabilities of China. The
penultimate section looks at the prevailing discourse among Chinese and
foreigners, as well as providing a preview of the recent practice of the
Chinese government in using some of these emerging power capabilities.
The final section offers a preview of the chapters in this volume.

Concept of power in China—past and present

The concept of power, or national power to be precise, is definitely not a
new term in the Chinese strategic thinking. As early as the Spring and
Autumn Period (722 to 476 bc), China’s great strategist Sun Zi wrote in his
famous Art of War that the outcome of war largely depended on the power of
each state. His concept of power refers to not only military might but also
economics, geography, politics and subjective guidance. More than 700
years ago, the Song dynasty—the largest economy in the world and one of
the most prosperous dynasties in the entire history of China—was defeated
by the Mongols from the North. This defeat propelled the Chinese strategic
thinkers to recognize that in addition to economic prosperity military
capabilities should always be a critical element of a country’s power.
Similarly, reflecting on the defeat of the mighty Qing Dynasty by the
British more than 150 years ago, Chinese strategists identified poor political
coordination, backward culture and technology, as well as a fragmented
political system, as the main reasons for Qing’s defeat, which led to China’s
Hundred Years Humiliation. Then, during the Sino-Japanese war, Mao
Zedong in his On Protracted Warfare declared that despite Japanese military
supremacy, China would eventually win the war because it surpassed Japan
in terms of power, measured by territorial size, population, and international
support.
The modern concept of national power in China came into force during
the 1980s after Deng Xiaoping’s new assessment of China’s security
environment: the growth of the world’s peace exceeded the growth of the
forces of war. As peace and development emerged as the main trend in the
evolvement of international affairs, Deng felt that military force could no
longer be the sole criterion and primary index of a country’s power. He then
urged his government to place economic development at the top of the
country’s agenda.
Subsequently, in the mid-1980s, Chinese analysts developed the concept
of Comprehensive National Power (CNP), defined as the combined overall
conditions and strengths of a country in numerous areas, considering both
qualitative and quantitative measures. While the qualitative measurement
facilitates general discussions of a country’s strengths and weaknesses, the
quantitative method yields numerical values of a country’s CNP using
formulae and specific extensive index systems and equations. Chinese
analysts believe that the study of CNP is important to China for identifying
its international status and for assessing the power potentials of China’s
partners, adversaries, and rivals. These measurements address strategic
questions (such as which country would be best suited to exploit the
Revolution in Military Affairs in times of war and peace) in order to provide
a clear indication as to which side had a better advantage and possibly
achieve victory in a conflict. Since then, Chinese scholars have undertaken
several quantitative studies to further enrich the concept of CNP.
Huang Shuofeng from the China Academy of Military Science, who did
pioneering research on CNP in China, argued that a country’s CNP includes
seven key factors: politics, economics, research and technology, military,
culture and education, diplomacy, and resources.8 Another scholar from the
China Academy of Military Science, Wu Chunqiu, pointed out that CNP
should at least include the country’s size, geographic location, natural
resources, terrain and climate, population, national production, technology
and education, transportation, military strength, ideology, social and political
system, international strategy, leadership competency, allies’ international
assistance and others.9 Li Tianran from the China Institute of International
Studies believed that the elements of CNP include geographic location,
population, resources, national cohesion, defense capability, economic
strength, and diplomatic strength.10 Hu Angang and Men Honghua described
CNP as an aggregation of all national strategic resources such as economic
resources, human resources, natural resources, financial resources,
knowledge and technological resources, government resources, military
strength and international resources.11 Yan Xuetong from Tsinghua
University has also attempted to calculate the CNP of nations through six
factors: manpower, natural resources, economic, politics, military affairs,
and history and culture.12
While scholars’ views on factors contributing to a country’s CNP may
differ, the consensus is that economic and military capabilities play a central
role. With the end of the Cold War and the rising importance of economic
issues in international politics, economic power is now seen as the most
important factor in CNP calculations. This, however, does not undermine the
importance of military power because the Chinese leaders believe that
military power is the prerequisite for economic power expansion while
military power is essential for protecting national interests and for carrying
out global strategies.13 Furthermore, other factors, though important to a
country’s CNP, tend to be fixed at least within a considerable period of time.
Examples include geography, country size, population, history and culture,
and political system. Given that the goal of this book is to analyze the rise of
China’s power, discussion will be focused on economic and military
strength.
China’s economic and military capabilities
Since China’s Reform and Opening-Up in 1978, it has become one of the
world’s fastest-growing economies. China has emerged as a major global
economic and trading power. It is currently the world’s second-largest
economy; largest merchandise exporter; second-largest merchandise
importer; second-largest destination for foreign direct investment (FDI);
largest manufacturer; and largest holder of foreign exchange reserves in the
world.
Compared with the GDP growth of the United States and Japan (see
Figure 1.1), China’s economy has witnessed a continuous growth at around
10 percent per year during 2001–2012; in contrast, during the same period,
GDP growth rates of the United States and Japan on average grew only at 2
percent and 1 percent respectively. The stark differences in economic growth
rate had resulted in significant changes in the three countries’ economic
strength (see Figure 1.2). China overtook Japan as the world’s second largest
economy in 2009. Similarly, the GDP gap between China and the United
States had significantly narrowed; in 2012, Chinese GDP was more than 50
percent of US GDP. If the GDPs of the three countries are compared using
Purchasing Power Parity (PPP), the growth in Chinese economic capability
is even more remarkable. In PPP terms, China surpassed Japan as the
world’s second largest economy since 2001. Chinese GDP exceeded 80
percent of US GDP in PPP terms by 2012 (see Figure 1.2).
China’s burgeoning trade volume, overseas foreign investment, and
foreign aid clearly indicate its rising economic capability. Based on
measures of the sum of exports and imports of goods, China has already
surpassed the United States by becoming the world’s largest trading nation
in 2012. In 2012, US trade in goods amounted to US$3.82 trillion, whereas
Chinese trade in goods for the same period stood at US$3.87 trillion.14
Figure 1.1 China, United States and Japan, GDP comparison (current US$) (source: World Bank
2013).
 When trade in services is taken into consideration, the United States
remains the world’s largest trading nation, yet the gap between China and
the United States has significantly narrowed in terms of total foreign trade in
recent years (see Figure 1.3). In 2012, US total foreign trade was US$4.9
trillion while Chinese foreign trade was lagging behind by only US$800
billion.15 According to a 2012 forecast by HSBC Holdings plc, China would
overtake the United States as the top-trading nation by 2016.16
Figure 1.2 China, United States and Japan, GDP comparison (PPP) (source: World Bank 2013).

In terms of foreign aid and investments, China has significantly expanded

its profile in developing countries (see Table 1.1.). Since 2004, owing to the
 country’s sustained, rapid economic growth and enhanced overall national
strength, China’s foreign aid has grown at 29.4 percent from 2004 to 2009.
Many countries from Asia to Africa, Eastern Europe to the Caribbean
Islands, have benefited from China’s growing aid program. By the end of
2009, China had provided aid to 161 countries and more than 30
international and regional organizations. Among them, 37 countries are new
recipients of such aid.17

Figure 1.3 Total foreign trade of China and United States (US$ billion) (source: World Bank, 2013).

Foreign aid and foreign direct investment, 2012 (US$ billion)

China United States
Foreign Aid 6.4 23
Outbound FDI 84 329
Inbound FDI 121 168a

Source: Data from authors’ multiple sources.b

Notes
a Li Jiabao, “China ‘most promising’ in FDI,” China Daily, June 27, 2013,
www.chinadaily.com.cn/cndy/2013–06/27/content_16667757.htm.
b For China’s aid in 2012, refer to Du Juan, “Experts see transparency in foreign aid,” China Daily,
April 16, 2013, http://usa.chinadaily.com.cn/epaper/2013–04/16/content_16411745.htm. Data for
US foreign aid is taken from State and USAID–FY 2013 Budget,
www.state.gov/r/pa/prs/ps/2012/02/183808.htm. Data for foreign direct investment is from World
 Investment Report 2014: Investing in the SDGs: An Action Plan, published by United Nations
Conference on Trade and Development.

Similarly, while China has been the largest recipient of FDI among the
developing countries, China’s outward FDI (ODI) has also increased
significantly over the past five years, despite the decline in global FDI. By
2011, China had emerged as the world’s sixth-largest investor. According to
the country’s National Development and Reform Commission, China’s ODI
is expected to grow by 15 percent in 2013, particularly in the non-financial
sector. This sector grew 30 percent year-on-year in 2012, and is expected to
increase by 15 percent in 2013 to reach US$88.7 billion.
Although there are signs of slow down coupled with severe economic
challenges, China’s economy would continue to expand, albeit not at the
pace witnessed in the last 30 years. Latest forecast by the OECD suggests
that China’s economy will surpass that of the United States by 2016. Other
forecasts suggest that China could overtake the United States by 2017 in PPP
terms, and by around 2027 in market exchange rate (MER) terms (see Figure
1.4).
Endowed with a growing economy, China has invested substantial
resources to modernize its military forces since the late 1990s. With top
leaders’ support, the People’s Liberation Army’s (PLA) budget has
maintained double-digit growth, making rapid qualitative and quantitative
military expansion possible.
China has the largest ground forces in the world, 1.6 million-strong (see
Table 1.2), twice as much as the United States and Japan combined.18 Its
ground forces are making steady progress to augment combat capabilities in
the face of limited acquisition funds amid sharply-rising personnel welfare
costs. Modernization efforts for the ground forces are concentrated on
incremental improvements in developing special operations forces and
expanding dedicated amphibious and army aviation units, among other
selected areas.
Figure 1.4 Projected GDP growth paths of China and United States (source: PwC Economics 2013).

Table 1.2 Ground forces

USPACOM Japan China
60,000 (including five Stryker 140,110 (plus 8,175 Ready 1,600,000 (Reserves estimated at
brigades) Reserves and 46,000 510,000)
Reserves)
Source: Military Balance 2013 and USPACOM website (www.pacom.mil).

Table 1.3 Air forces

USPACOM Japan China
Strength 43,000 43,195 400,000
Combat aircraft 2 squadrons with F-15C/D Mitsubishi XAC H-6, Su-30MKK
Eagle F-2, F-15J “Flanker,” SAC J-8, CAC
2 squadrons with F-22A Eagle, F- J-10, CAC J-7, NAMC Q-
Raptor 4EJ Kai 5, Su-27SK “Flanker-B,”
(+1 squadron personnel Phantom II SAC J-11, XAC JH-7A
only)
5 squadrons with F-16C/D
Fighting Falcon
1 squadron with A-10C
Thunderbolt II

Transport 1 squadron with B-737–200 C-130H An-24 “Coke,” An-26

(C-40B); Hercules, “Curl,” An-30 “Clank,” Il-
Gulfstream V (C-37A) Kawasaki 76 “Candid,” Tu-154M
 2 squadrons with C-17A C-1A, “Careless,” SAIC Y-5,
Globemaster NAMC YS- XAC Y-7, SAC (Shaanxi)
11P Y-8, Boeing 737,
1 squadron with C-130H
Bombardier Challenger
Hercules
1 squadron with Beech 1900C
(C-12J);
UH-1N Huey

Tanker/Transport 1 squadron with KC-135R (+1 Boeing KC- XAC H-6U

squadron 767J, C-
personnel only) 130H
Hercules
Reconnaissance/Airborne 2 squadrons with E-3B/C E-2C Beriev A-50 (KJ-2000),
early warning Sentry Hawkeye, SAC (Shaanxi) Y-8W (KJ-
Boeing E- 200)
767
Source: Military Balance 2013.

The PLA air force (PLAAF) has made remarkable improvement in recent
years, following decades of production problems, inefficiencies, and large-
scale mothballing of antiquated aircraft. China’s air force modernization
program involves combat aircraft, weaponry, transport aircraft, air-defense
missiles, and airborne troops. The air force’s aggressive import of Russian
combat aircraft and weapons is now giving way to the acquisition of highly
capable indigenous systems, and this implies a shift of the air balance of
power in the Taiwan Strait and having the PLAAF in a better position to
counter US and Japanese regional domination (see Table 1.3).
PLA Navy (PLAN) has made the greatest advancement and is becoming a
leading regional naval power capable of securing maritime control against
smaller opponents while deterring more powerful foes. China’s growing
strategic reach was illustrated by the commissioning of its first aircraft
carrier-Liaoning in September 2012, and the first at-sea carrier landing of its
J-15 combat aircraft two months later. While Liaoning is expected to be a
transition/training platform, China is developing another carrier and then one
or two larger nuclear-powered carriers that would be influenced by Soviet
designs.19
While comparing PLA with armed forces of the United States at the global
scale is a useful reference, it is more practical and precise to compare PLA
with the US Pacific Command (USPACOM) forces in order to understand
the rise of China in the military sense. This is because the areas of military
rivalry between two countries in the short to medium term will occur mostly
in the Asia Pacific region. The number of US military and civilian personnel
assigned to the USPACOM is approximately 330,000, only about one-fifth
of total US military strength,20 falling far behind the over 3 million-strong
Chinese active and reserve forces. Although the United States still enjoys
military dominance in the region, thanks to its technological supremacy and
combat readiness, China is catching up fast. As admitted by the USPACOM
commander at the Surface Navy Association’s annual meeting in January
2014, “the era when the U.S. military enjoys uncontested control over the
Pacific’s blue water and its airspace is coming to an end,” amid the rapid rise
of China’s military spending and capabilities.21
Table 1.4 Naval forces
USPACOM Japan China
Strength 140,000 41,937 (includes 255,000
Naval Air)
Strategic missile 180 ships (including None 4
submarines five aircraft carrier
19 52
strike groups), nearly
Submarines 2 (helicopter 1
2,000 aircraft
Aircraft carriers carriers)

Cruisers None None

Destroyers 40 27
Frigates 6 51
Others US Coast Guard has None 1 corvette, 254 fast
approximately 27,000 attack craft
personnel in its Pacific
Area
Sources: Military Balance 2013 and USPACOM website.

China’s power capabilities: prevailing perceptions and recent

practice
While China’s growing capabilities could be described quantitatively as
shown above, whether its capabilities can be translated into power—the
ability to shape international affairs to its own advantages—would also
depend on how China and the international community perceive Beijing’s
growing power as well as its intentions to use this power.
 To start with, there are huge differences between domestic and
international perceptions of China. According to a 39-nation study by the
Pew Research Center in July 2013, the international opinion is that China’s
economic power is on the rise. In Western Europe in particular, all countries
polled, except Italy, believed that China has topped or has already surpassed
the United States “as the world’s leading superpower.” In addition, even in
many countries where the United States is still seen as the top economic
power, most believe that China could eventually supplant the United States
as the world’s dominant superpower.22 In response to this global survey,
Chinese newspaper Global Times undertook an online survey in China.
Although not scientific, it nonetheless provides a sense of Chinese
perceptions of their country’s standing. Among 23,576 netizens who
participated in the survey, 94 percent disagreed with the statement that China
has become or will become the leading superpower in the world. Not only
the public, but Chinese elites and leaders hold the same opinion that China is
a big country but not a super-power. Chinese new president Xi Jingpin
admitted at the Boao Forum for Asia in April 2013 that China is still the
largest developing country in the world, with plenty of room for
improvement in areas of economic development, socialist modernization and
tackling domestic problems.23
In recent years, nevertheless, some voices in Chinese society are
increasingly calling for China to replace the United States as the world
leader and to use ‘China Model’ to reshape global order; however, both
official and elite opinions adhere to a prudent approach. They clearly
understand that though China’s economy as whole will surpass the United
States in the foreseeable future, it would be counterproductive for China to
try to usurp superpower status from the United States. The stark difference
between Chinese and international perceptions can be explained as follows.
First, China is still a very poor country in per-capita terms. Although there
has been stunning growth in Chinese per-capita GDP for the last 30 years,
Chinese per-capita GDP, even adjusted for purchasing power, is only about
15 percent of that of the United States. Meanwhile, increases in Chinese
urban and rural residents’ income do not come close to the country’s per-
capita GDP increase. Second, China is still far behind the United States in
important areas such as military, science and technology, and education and
cultural attraction. Third, Chinese philosophy urges China not to be number
one as the leading birds will be hit first, and the experience of the United
States serves as a very good lesson to China.
Nonetheless, though most of the Chinese disagree that China is already or
is becoming a superpower, they do consider China a great world power,
given the massive expansion of its economic and military capabilities.24 In
July 2010, People’s Daily published the commentary “Is U.S. Ready to
Recognize China as World Power?” in which the United States is urged to
recognize and accept China as a power on the world stage.25 This article was
considered a clear indication of a significant change in the Chinese
perception of itself—that from a regional power to a world power.26 Xi’s call
for new types of major power relations between China and the United States
clearly reflects his desire for the United States to respect China as a great
power equal to the United States;27 hence, it is important to understand how
China intends to use its newly acquired economic and military capabilities.
The international community fears that China would follow the path of
previous rising powers (such as Germany and Japan in the early twentieth
century) seeking hegemony, and thereby threatening global peace and
stability. As suggested by Henry Kissinger, however, Beijing sees itself as a
“returning power.”28 It aims to reclaim its rightful place in the world because
it longs to be respected by other countries. Haunted by the painful memories
of the 100 years of humiliation, China is determined to protect its interests
and its people with its newly acquired economic and military capabilities.
With China’s presence and interests expanding from the land to the seas and
beyond its borders, the military comes under mounting pressure to protect
China’s maritime interests and overseas interests. As China’s military
capabilities increase, China shows more willingness to deploy its military
might to protect its overseas interests. In the country’s Defense White Paper
2013, it is clearly stated that China’s military forces have the duty to
safeguard the country’s maritime rights and interests. As maritime disputes
with neighboring countries in the South China Sea and the East China Sea
escalated in recent years, the PLAN was frequently deployed to support
China’s maritime law enforcement, fisheries, and protect its oil and gas
exploitation, in addition to its routine combat readiness activities.
Furthermore, together with the marine surveillance and fishery
administration departments, the PLAN has conducted joint maritime
exercises and drills for protecting rights and enforcing laws. To safeguard
China’s maritime rights, it has also enhanced its capabilities to coordinate
command and respond to emergencies in joint military-civilian operations.29
What is even more remarkable is that for the first time ever, China
explicitly expressed that the country’s military forces are expected to protect
its overseas interests. As the White Paper states:

With the gradual integration of China’s economy into the world

economic system, overseas interests have become an integral
component of China’s national interests. Security issues are
increasingly prominent, involving overseas energy and resources,
strategic sea lines of communication (SLOCs), and Chinese nationals
and legal persons overseas. Vessel protection at sea, evacuation of
Chinese overseas nationals, and emergency rescue have become
important ways and means for the PLA to safeguard national interests
and fulfill China’s international obligations.30

This explicit policy formulation in the white paper was preceded by

operational deployment of military assets to secure overseas interests. In
December 2008, China sent a combined naval task force to conduct escort
operations in the Gulf of Aden and waters off Somalia. Since December
2012, the Chinese Navy has dispatched a total of 13 task groups, 34
warships, 28 helicopters, and 910 Special Operations Force (SOF) soldiers
escorting 4,984 ships in 532 batches. In February 2011, the turbulent
situation in Libya severely threatened Chinese institutions, enterprises, and
nationals in that country. The Chinese government organized the largest
overseas evacuation since the founding of the PRC, and 35,860 Chinese
nationals were taken home by PLA ships and aircraft.31
While there are fears that frequent flexing of military muscle drives
suspicions that keep the China threat narrative alive, China tends to use its
economic capabilities to exert its influence. First, at the multilateral level,
Beijing has increasingly used its economic prowess to improve China’s
image and gain political influence. At the G20 summit held in Mexico in
June 2012, China offered US$43 billion to the IMF’s crisis-fighting reserves,
joining other major emerging markets in pledging new funds to support the
global financial system, thereby showcasing China as a “responsible
stakeholder.” China’s US$38.4 billion contribution to the Chiang Mai
Initiative (CMI) has drawn wide applause in the region and beyond.
Furthermore, Chinese generous donation and financial assistance of other
kinds to the developing world have won friends and fostered ties.32
Similarly, in undertakings on free-trade agreements (FTAs), in contrast to
other big powers such as the United States, China tends to be willing to offer
more economic concessions to its trading partners.33
Second, at the bilateral level, both economic carrot and stick are being
used by China to exert geopolitical influence and advance its foreign policy
goals. The country’s generous economic assistances to third-world countries
during the Cold War period successfully made China the legitimate member
of the United Nations. In the modern era, China’s generous economic
assistance and debt cancellation targeted at developing countries have won
itself a lot of friends, particularly in Africa, Southeast Asia and Latin
America. For instance, billions of dollars’ worth of Chinese aid to Cambodia
successfully made Phnom Penh a strong supporter of China’s diplomatic and
foreign policies. It was alleged that Cambodia, as the Chair of the 2012
ASEAN Summit—in accordance with Beijing’s preference—made efforts in
keeping the South China Sea issue out of discussion at the Summit.
With growing economic might, it appears that China is no longer shying
away from deploying economic sticks to achieve its political and diplomatic
goals. There have been several high profile cases in the past few years
underlining China’s growing willingness in this area.34 There is even
discussion in China about employing economic weapons to punish the
United States and Japan in times of conflicts. For instance, in August 2011,
amid a row over arms sales to Taiwan, the article “China must punish US for
Taiwan arm sales with financial weapon” in the People’s Daily suggested
that China—as the United States’ biggest creditor—should use its “financial
weapon” to teach Washington a lesson if it moves forward with a plan to sell
arms to Taiwan.35 In September 2012, after Japan’s decision to nationalize
Diaoyu Island, the People’s Daily warned in a commentary that Japan’s
provocations over China’s Diaoyu Islands would cause self-destruction for
itself through possible economic punishment.36
Contents of this book
This book is divided into three parts. Part I consists of three chapters,
including the present chapter that analyzes and maps the various dimensions
of Chinese power as well as the prevailing discourse in both China and in the
region regarding the use and nature of these capabilities. The second chapter
by Jingdong Yuan discusses the complexity of both the domestic and
external constraints facing Beijing in utilizing its power resources, and the
third chapter by Richard Bitzinger assesses the military component of
China’s power and its implications. With these assessments of China’s
emerging power capabilities as the background, Part II analyzes US strategic
rebalance to Asia in the context of the growth of China’s power and Part III
evaluates the regional perceptions and reactions to the growth of China’s
power.
In Chapter 2, Yuan cautions that recent analyses tend to overestimate
Chinese capabilities and overlook the complexity of both the domestic and
external constraints facing Beijing. China is at a tipping point as it marches
toward great power stardom, with a new generation of leaders coming into
power, amid great expectations and growing domestic demands. As China’s
power and influence grow, it causes other powers to hedge against rather
than bandwagon with China. Yuan emphasizes that unless and until Beijing
revalues its foreign policy and exercises greater constraints in its military
approaches to territorial disputes, it is likely to push the regional order into a
bipolar structure, resulting in instability and probably even confrontation
with the United States.
In Chapter 3, Richard Bitzinger highlights the concerns throughout the
Asia and the Pacific Rim that stem from China’s expanding military power, a
potential prelude to a more assertive China—and one that is prepared to use
its growing might to secure its national interests and back up its various
geopolitical claims. This trepidation is reinforced by the increasingly volatile
rhetoric coming out of Beijing—for example, its claims of “indisputable
sovereignty” over much of the South China Sea—as well as its ostensibly
provocative activities in adjacent seas and airspaces.37 Consequently, several
nations most directly affected by a more militarily capable and assertive
China reacted in kind by undertaking their own military responses to this
buildup. These arming actions, in turn, have led some to fear that the Asia-
Pacific is in the midst—or on the brink—of some kind of destabilizing “arms
race” that could undermine regional security and stability. At the same time,
it is also possible to interpret the United States’ so-called “pivot toward
Asia” as a direct response to rising Chinese military power—a tit-for-tat
ratcheting up of great power confrontation that could exacerbate regional
tensions.
Part II includes both Chinese and American perspectives on the
implications and rationale behind the US strategic rebalance to Asia in the
context of growing Chinese power. Philip Saunders underlines that the
Obama administration’s “rebalance to Asia” has many elements of continuity
with past policy, including the recognition that rapid growth and economic
dynamism have greatly expanded the Asia-Pacific region’s economic and
strategic weight and importance to US interests. The timing was dictated
largely by the need for clear priorities to guide force development in an era
of declining spending; and that demand by US allies and partners for an
increased US commitment to the region played an important role in shaping
the rebalance. US diplomatic, economic, and military efforts to implement
the rebalance demonstrate a significant increase in strategic attention to the
Asia-Pacific region, matched by commitments of diplomatic, economic, and
military resources, including the time of senior US leaders. A key
implementation challenge lies in making the rebalance robust enough to
reassure US allies and partners of US capability and will to maintain its
presence in Asia over the long term, without alarming Chinese leaders to the
point of foregoing cooperation with Washington.
Wang Dong in Chapter 5 provides the Chinese perspective with an outline
of the scholarly and policy debates in China regarding the US
pivot/rebalancing strategy. His chapter shows that whereas Chinese policy
makers largely remain sober-minded and value the importance of
cooperative, non-adversarial relations with the United States, the US
pivot/rebalancing strategy has nevertheless increased the sense of insecurity
among Chinese elites and the public. As a result, US pivot/rebalancing to
Asia has ironically contributed to the emerging security dilemma between
China and the United States.
Part III provides an evaluation of how China’s growing power is affecting
the power balance and security order in Northeast, Southeast, Central, and
South Asia. The first chapter in this part by Mahmud Ali focuses on South
Asia. His chapter examines the aspects of China’s military and economic
power of peripheral South Asian (PSA) states—Afghanistan, Pakistan, Sri
Lanka, and Bangladesh. The chapter sets a very positive context of current
PSA stances towards China that incorporate significant security
collaboration. It compares this shared perspective with that of India, the
power at the Indo-centric South Asian sub-systemic core, and reveals that
PSA states’ China policy is in sharp contrast to India’s. This leads to a series
of testable hypotheses that are analyzed via case studies examining the
historical evolution of PSA state-policies vis-à-vis China. Next, Ali reviews
PSA responses to the China–US–India strategic triangle, and the impact of
the US ‘pivot’ on the former’s objectives and policies. The assessment
concludes that PSA states have sought to shape a stable and predictable sub-
systemic strategic milieu; China’s growing power has encouraged policy
adjustments, not triggered transformations. China’s power has increased its
attractions among PSA states, without eradicating intra-sub-systemic
complexities. While Afghanistan remains sui generis, Pakistan, Bangladesh
and Sri Lanka often see India as a non-benign presence, the defining policy
driver. China and the United States, pursuing both divergent and shared
goals, presented themselves as potential external balancers assuaging core
insecurities.
The impact of China’s rise on India has become much too complicated
given the baggage of history, unresolved border and territorial problems, and
China’s increasing foray into the Indian Ocean. Beijing’s South Asia policy,
particularly with Pakistan, also remains an important factor. Rajeswari
Rajagopalan’s chapter analyzes the impact of Chinese power on India in
three specific areas: border negotiations, economic and military domains,
including its effect on India’s naval standing in the Indian Ocean. She also
examines the narrative in India on the rising Chinese power, and concludes
with a discussion on possible Indian responses, including balance of power
options for India that New Delhi has traditionally rejected as an option.
Capturing the dilemmas facing Australia arising from the rise of China,
David Uren, economics editor of the news daily The Australian, aptly notes,
“There are two Chinas in the Australian mind: the bottomless market and the
menacing other.”38 Australia’s foreign and security policy debate has
focused on the management of the fundamental change in strategic and
economic circumstances brought about by China’s rise. For the first time in
the nation’s history, Australia’s chief trading partner is neither an ally, nor
the ally of an ally; it does not share any Australian democratic outlook and
values. There is a growing realization among Australian strategic thinkers
that China is more likely to determine Australia’s prosperity in the twenty-
first century than any other country. These concerns are nicely captured in
Rory Medcalf’s chapter on Australian perceptions of and responses to
Chinese power. Medcalf seeks to answer two questions. First, how does
Australia perceive a rising and increasingly powerful China? Second, how is
Australia responding? He contends that Australia possesses a discernable
China strategy, though questions about its implementation, effectiveness, and
sustainability remain. In recent years, Canberra has embarked on a
multifaceted strategy with elements of engagement and hedging, in which
hedging (at least in Australia’s context) comprises both internal balancing
(modernizing Australia’s own military) and external balancing (especially
strengthening the US alliance). These strategies carry their own problems
and questions, particularly whether Australia is willing to fund an advanced
military and whether the net effect of a strengthened US alliance is a
stabilizing influence.
Alessandro Arduino’s chapter contains a discussion of the various
strategic roles that Central Asia could undertake to shape China’s future
security policies. Examples of regional issues discussed include China’s
interaction with Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, and
Turkmenistan encompassing border security, military cooperation, political
stabilization, and the eradication of transnational crimes and terrorism. On
the economic front, Central Asia supplies energy and natural resources vital
to sustaining the current GDP growth rates in China. The current transition
to a new regional power configuration witnesses China and Russia as the
main actors, accompanied by growing concerns over Turkey, Iran, and India.
Factors linked to Beijing’s willingness to enter what is too commonly
labeled as a “New Great Game” includes not only the hunger for natural
resources, but also a desire to reduce its dependency on sea lines as a
strategic route for oil supply. Central Asia is a strategic area on the energy-
game chessboard where China is a prominent player. Meanwhile, the
growing Chinese economic predominance in Central Asia is leading Beijing
to become an “unwilling” leading political actor.
Cognizant of the many constraints and limitations on ASEAN’s capacity
and will to contribute substantively to regional security, the chapter by Kai
He assesses what would and could ASEAN realistically achieve in “post-
China-rise Asia.” He identifies three key challenges for ASEAN and its
member states. First, there is the compulsion to side with either China or the
United States in the course of the region’s ongoing power shift. Second,
whether in the context of China’s rise or America’s decline or both,
ASEAN’s political relevance stands to be severely tested. Third, despite its
incessant protests, ASEAN’s neutrality, so far as China is concerned, is in
doubt, not least because four ASEAN states contest China’s claims to South
China Sea islands. Whether ASEAN unites behind its four member
claimants or distances itself from them, the organization could find itself in a
“Catch-22” situation where it loses either way. Be that as it may, he suggests
that the power transition taking place in the Asia-Pacific today is unlike
previous transitions because globalization and economic interdependence
create spaces that could be shaped by the institutional strategies of ASEAN’s
big powers.
The chapter by Evelyn Goh evaluates Southeast Asian responses to
China’s rise within the broader context of strategies to manage great power
relations and regional order. It argues that since the end of the Cold War,
East Asia has faced the parallel resurgence of both American as well as
Chinese power, not the just the rise of China, or the decline of the United
States. Against this background, Southeast Asian responses have been
innovative, but also limited in their ability to facilitate the new great power
balance and bargains necessary for a peaceful order. Southeast Asian
responses to the Obama administration’s “pivot” to Asia and the implications
for their China policy highlight these limitations. This chapter includes
warnings of the growing dangers for failing to recognize the need to manage
the rise of both China and the United States.
Choo Jaewoo argues that for a rising China, the Korean peninsula presents
an unprecedented dilemma. The course of China’s rise forces it to assume
greater responsibility for Pyongyang’s regime survivability and at the same
time to better accommodate Seoul’s growing expectation to behave in a
more responsible way. In short, both South Korea and North Korea want
China to be a “responsible state” in contrasting contexts. As long as a
normative concept of inter-state relations persists in China–South Korea
relations, respect for norms and rules-by-agreement in their contacts will
continue to be taken for granted. China can no longer depend on its statist
interpretation of norms and rules. Hence, South Korea expects China to act
with both normative and sociological legitimacy. On the other hand,
Pyongyang can be indifferent as long as Beijing does not revoke the alliance
bearing responsibility for its survival. North Korea believes it will not be lost
by China or vice versa. Beijing has attempted to lure Pyongyang into
economic reforms through collaboration efforts without success. North
Korea is becoming an expensive commodity to China, despite its rise.
Pyongyang’s reliance on Beijing seems incessant, both in terms and in time.
The cost for China will continue to increase commensurate with each North
Korean nuclear test.
Ken Jimbo believes that the impact China’s relentless rise has had on
Japan’s security environment is shaped by two key developments, namely,
the economic power transition China has successfully engineered over Japan
—China overtook Japan as the world’s second largest economy in 2010—
and China’s ability to close the military capabilities gap between it and the
United States. As a consequence, China’s rise and the relative decline of the
United States have transformed the Asia-Pacific region from one of
“uncontested supremacy” formerly enjoyed by the United States to that of
“contested supremacy” between China and the United States, and with that
Japan’s growing concern over the ability and will of America to play its part
as unequivocal ally of Japan. Along with Abe’s re-assumption of the prime
ministership, Ken Jimbo examines how the foreign-policy debate within
Japanese strategic circles has in recent years gravitated towards a “China-
out” (balancing) orientation as opposed to a “China-in” (engagement)
orientation. The expansion of China’s A2/AD (anti-access area denial)
capability in the East China Sea has convinced Japanese security planners
that the United States no longer enjoys uncontested supremacy in the Asia-
Pacific. While the Japan–US alliance remains central to the preservation of
Japanese security, the rise of contested supremacy in the region has
exacerbated Tokyo’s sense of America’s relative decline. Consequently,
Tokyo has sought to establish and strengthen security partnerships in the
region with the aim to build a loose soft-balancing coalition against China.
The final chapter in this volume by Hiroyasu Akutsu is about the
implications of China’s growing power on US alliances in Northeast Asia.
The Japan–US– South Korea trilateral security cooperation has been
historically focused on dealing with North Korea’s threats. Given the growth
of China’s comprehensive power, however, the “quasi-allies” (Japan and
South Korea) need to prepare for closer bilateral security cooperation. In the
near future, China seems unlikely to replace North Korea as the common
and immediate threat that binds the two countries, but deeper Japan–South
Korea bilateral security cooperation would help the allies maintain stability
in the region. The two countries have agreed on the necessity and
importance of the General Security of Military Information Agreement
(GSOMIA) and the Acquisition and Cross-Servicing Agreement (ACSA).
The significance of this can easily be understood in the light of the
experience of Japan–Australia bilateral security cooperation. Greater
bilateral security cooperation between Japan and South Korea—in the form
of defense sharing and exchange of strategic information/assessments as
well as regular military exercises involving Japan–South Korea and Japan–
Australia—could further increase the overall capability of the US alliance
system in the Asia-Pacific region to ensure regional stability.

Notes
* The articles in this edited volume are part of a project entitled “Sources of Stability and
Instability in the 21st Century,” convened and led by the S. Rajaratnam School of International
Studies (RSIS), Nanyang Technological University, Singapore. Funded by the John D. and
Catherine T. MacArthur Foundation, the project took place from 2012 to 2013 and involved more
than sixty scholars and academic-practitioners from throughout the Asia-Pacific and Europe. For
further information on the project, see: http://www.rsis.edu.sg/research/idss/about-the-centre/idss-
macarthur-foundation-project/#.VCIsRSuSynM.
1 For the 2013 defense budgets in Asia, China’s tops the list with US$112 billion, followed at some
distance by Japan with US$51 billion and India with US$36.3 billion. For more information,
refer to Jonathan Marcus, “Military spending: Balance tipping towards China,” BBC News,
February 5, 2014, www.bbc.com/news/world-middle-east-26054545 and “China’s military
spending: At the double,” The Economist, March 15, 2014,
www.economist.com/news/china/21599046-chinas-fast-growing-defence-budget-worries-its-
neighbours-not-every-trend-its-favour.
2 Samuel P. Huntington, “Why international primacy matters,” International Security 17, 4 (Spring
1993), pp. 71–2.
3 “India–US and the new great game,” The Straits Times, November 30, 2009.
4 “China eclipses U.S. as biggest trading nation,” Bloomberg, February 11, 2013.
5 Joseph Nye, The Future of Power, New York: Public Affairs, December 13, 2011, p. 55.
6 “China to tally 150 bln USD in outbound investment in 2015,” Xinhua, May 15, 2012 and
“China’s overseas investment: ODI-lay hee-ho,” The Economist, January 19, 2013.
7 Jamil Anderlini “On good terms: Chinese banks fuel ‘going global’ drive,” Financial Times, April
5, 2011.
8 Huang Shuofeng, Zonghe guoli lun (On Comprehensive National Power), Beijing, 1992, p. 94.
9 Wu Chunqiu, Guangyi da zhanlue (Grand Strategy), Beijing: Shishi chubanshe, 1995, p. 98.
10 Li Tianran, “On the question of comprehensive national strength,” Journal of International
Studies, 2, April 1990.
11 Hu Angang and Men Honghua, “The rising of modern China: comprehensive national power and
grand strategy,” Strategy and Management, 3, 2002.
12 Yan Xuetong, Zhongguo guojia liyi fenxi (Analysis of China’s National Interests), Tianjin: Tianjin
renmin chubanshe, 1996, p. 88.
13 Zhu Liangyin and Meng Renzhong, “Deng Xiaoping zonghe guoli sixiang yanjiu” (A Study on
Deng Xiaoping’s Comprehensive National Power Thought), in Li Lin and Zhao Qinxuan, eds,
Xin shiqi junshi jingji lilun yanjiu (Studies of New Period Military Economic Theory), Beijing:
Junshi kexue chubanshe, 1995, pp. 44–6.
14 “China eclipses U.S. as biggest trading nation.”
15 World Bank 2013 online database.
16 “China eclipses U.S. as biggest trading nation.”
17 White Paper on China’s Foreign Aid. Furthermore, the Chinese government announced a series
of well-targeted foreign aid policies at many international and regional conferences, such as the
UN High-Level Meeting on Financing for Develop-ment, UN High-Level Meeting on the
Millennium Development Goals, Forum on China–Africa Cooperation, Shanghai Cooperation
Organization, China–ASEAN Leaders’ Meeting, China–Caribbean Economic and Trade
Cooperation Forum, China– Pacific Island Countries Economic Development and Cooperation
Forum, and Forum on Economic and Trade Cooperation between China and Portuguese-Speaking
Countries. The government’s aim is to strengthen foreign aid in the fields of agriculture,
infrastructure, education, health care, human resources, and clean energy.
18 In addition, China has over 500,000 reserve forces, primarily demobilized ground forces, and can
draw on the paramilitary People’s Armed Police forces of over 660,000.
19 Jane’s World Navies China, Englewood, CO: IHS, 2012.
20 USPACOM Facts, www.pacom.mil/about-uspacom/facts.shtml.
21 Andrew Tilghman, “PACOM Chief: Uncontrolled US control of Pacific is ending,” AirForce
Times, January 14, 2014,
www.airforcetimes.com/article/20140115/NEWS08/301150028/PACOM-chief-Uncontested-U-S-
control-Pacific-ending.
22 “America’s Global Image Remains More Positive than China’s but Many See China Becoming
World’s Leading Power,” July 18, 2013, www.pewglobal.org/files/2013/07/Pew-Research-
Global-Attitudes-Project-Balance-of-Power-Report-FINAL-July-18–2013.pdf.
23 www.chinadaily.com.cn/micro-reading/china/2013–04–07/content_8689773.html.
24 http://world.huanqiu.com/roll/2012–01/2319248.html.
25 “Is US ready to recognize China as world power?” People’s Daily, July 29, 2010.
26 Frank Ching, “China wants credit as ‘world player’ from US,” The China Post, August 4, 2010,
www.chinapost.com.tw/commentary/the-china-post/frank-ching/2010/08/04/267248/China-
wants.htm and Gordon Chang, “Beijing: U.S. must recognize China as great power,” Forbes,
August 6, 2010, www.forbes.com/2010/08/06/china-power-foreign-policy-opinions-columnists-
gordon-chang.html.
27 “Equal participation of China, US crucial to Asia’s prosperity,” People’s Daily, January 30, 2013,
http://english.peopledaily.com.cn/90883/8114392.html.
28 David Shambaugh, China Goes Global: The Partial Power, New York: Oxford University Press,
2013, p. 1.
29 The Diversified Employment of China’s Armed Forces, Information Office of the State Council,
The People’s Republic of China, April 2013, Beijing. For complete list of white papers, refer:
http://eng.mod.gov.cn/Database/WhitePapers/.
30 Ibid.
31 Ibid.
32 For instance, in 2011 when the food security situation became exacerbated in East Africa, China
provided close to US$70 million worth of food aid to help those countries to combat hunger. In
2011, as the first country to join the strategic alliance for South–South Cooperation led by FAO,
China donated US$30 million to a trust fund to assist developing countries’ agricultural
development. At the UN Conference on Sustainable Development (Rio+20 summit) in June,
China announced that it will contribute US$6 million to a UN Environment Program trust fund
for projects and activities to help developing economies improve environmental protection. China
also promised that it will make available US$31.7 million for a three-year international project to
help small island countries, the least developed countries, and African countries to tackle climate
change.
33 The typical example is the China–ASEAN Free Trade Agreement. It was regarded as a
diplomatic landmark for China in taking the lead to propel the progress of East Asian cooperation
by forging institutional arrangements and making economic concessions first. It is clear that the
motivation of Beijing in concluding a FTA to ASEAN was to advance political ties through
providing economic benefits to ASEAN countries. For more information, see John Ravenhill and
Yang Jiang, “China’s move to preferential trading: A new direction in China’s diplomacy,”
Journal of Contemporary China 18, 58 (2009): 27–46.
34 In 2010, there were claims that China had blocked the export of rare earths in response to a
dispute over Tokyo’s detention of a Chinese fishing boat captain. In the same year, when the
Nobel Peace Prize committee announced it was going to honour a prominent Chinese dissident,
exports of Norwegian salmon to China were targeted in response. Likewise, researchers have
found empirical evidence that Beijing has punished countries that officially received the Dalai
Lama by reducing their exports to China. In June 2012, there were claims that China imposed
restrictions on banana imports from the Philippines over contested waters around the
Scarborough Shoal in the South China Sea. For more information, see Mark Thirlwell, “China
wields trade weapon,” Lowy Interpreter, September 25, 2012,
www.lowyinterpreter.org/post/2012/09/25/China-wields-trade-weapon.aspx.
35 http://english.people.com.cn/90780/91342/7562776.html.
36 http://english.people.com.cn/90883/7951384.html.
37 “Ambassador: China has indisputable sovereignty over S. China Sea islands,” Xinhua, January
23, 2013.
38 Quoted in Malcolm Knox, “What the boom won’t leave behind,” The Monthly, December 2012–
January 2013, www.themonthly.com.au/issue/2012/december/1360622597/malcolm-knox/what-
boom-won-t-leave-behind. The book in question is by David Uren, The Kingdom and the Quarry,
Sydney: Black Inc., 2012.
2 The rise of China and the
emerging order in Asia
Jingdong Yuan

China’s rise is transforming the global and regional geo-economic and geo-
political landscapes and has understandably generated wide-ranging
discussions of and speculations on how Beijing is going to exercise its
power and influence in international politics. As the country’s capabilities
expand, so have been China’s aspirations and ambitions, as well as growing
expectations and concerns from the international community. Indeed, the
past decade has witnessed not only Beijing’s active diplomacy from the Six-
Party Talks to climate change discussions, but also its more assertive
behavior in maritime territorial disputes, most noticeably since 2007–08.
The 2008 global financial crisis (GFC) further affirmed China’s growing
status as an economic giant just as the United States began to experience
serious economic and financial difficulties. These developments have
prompted heated debates within China, with different domestic
groups/actors making divergent assessments of the meanings and
opportunities of China’s ascendance, focusing on such critical issues as the
country’s grand strategy (has there been one and, if not, what should
constitute China’s grand strategy?), the continued relevance of Deng
Xiaoping’s advice of taoguang yanghui (“bide one’s time”) in guiding
Chinese foreign policy conduct, and the country’s interests, role, and
responsibility in the changing international environment. And Beijing’s
national security policy making increasingly has to contend with growing
demands from a multitude of actors within as much as it has to deal with
external pressures, contingencies, and threats.
 Understanding the nature of China’s rise and its likely trajectory in the
coming decades, and the challenges and opportunities it faces, requires
serious efforts to address a range of questions on the drivers behind China’s
growing global activism and regional behaviors, and assess the long-term
economic and geo-strategic implications of growing Chinese power in Asia.
Would growing capabilities bring with them aspiration for heretofore
second-tier powers like China? Will they seek hegemony and where, or will
they stay relatively contented given the liberalism and globalization bestow
more benefits on them than if they try to change the system and confront
the reigning power(s)?1 What are the implications of China’s rise for East
Asia, and especially how will Beijing manage various territorial disputes
with its neighbours? Is China’s activism, and in particular its use of
economic, diplomatic, and military tools part of its grand strategy aimed at
weakening the U.S. position, with a view to eventually replacing it as the
new reigning power of the world, or, to use phrases popular in Chinese
parlance, can the rise of China be viewed as “ ‘revitalization’ or
‘rejuvenation’ of its rightful place in the world as a great power.”2 Or is
Beijing’s goal more modest, and driven largely by its preoccupation with
maintaining social stability through continued economic growth, hence
giving the communist party (CCP) the legitimacy to rule China?3
This chapter’s goals are more modest. It begins with a discussion of
China’s rise and its implications for regional and global power order. This is
followed by an analysis of how Beijing’s foreign and national security
policy making is increasingly affected by the growing number of actors
even as it has to confront the increasingly complex external environments.
Finally, the chapter briefly discusses the role of public opinions and
nationalism in both pressuring and being exploited by policy makers in
achieving national security policy objectives. I argue that despite the
unprecedented growth over the past three decades, China remains a
conservative, cautious, and insecure power with limited albeit increasingly
well-defined objectives. China’s core interests—CCP rule, national
sovereignty and unity, and continued economic developments—remain
predominantly domestically driven but also depend on stable and conducive
external security environments. Beijing’s recent assertiveness reflects the
growing pains of a rising power that has to contend with external challenges
and internal demands, a two-level game that only pragmatic leadership and
skilful diplomacy can manage.

China rising: expectations and concerns

China’s rise as a major power in East Asia within a short span of three
decades is unprecedented in international history. A recent National
Intelligence Council report predicts that China will overtake the United
States as the world’s largest economy in a decade.4 The 2013 survey
conducted by the Pew Research Center offers a mixed assessment. While
the report confirms that China will eclipse the United States as the world’s
dominant power, it also suggests that China has to boost its soft power as
America continues to receive a comfortable margin in favorability ratings.
Meanwhile, mutual suspicion between the two countries is growing.5
Clearly, the rise of Chinese power has generated wide-ranging discussions
and speculations on both the sources, characteristics, and sustainability of
its continued economic growth, and on how Beijing will use its growing
power resources—economic and military capabilities, political influence,
and “soft power” in its diplomacy, in general, and its approaches to issues
and regions of increasing salience for its resources, economic, and
diplomatic interests, in particular.6 The jury is still out and opinions differ.
Power transition theory and offensive realism predict that the rise of China
will bring instability to the international system. They argue that states are
sensitive to their relative capabilities and will seek to change the
international order in ways that better reflect their newly earned power and
national interests. When weak, they may reluctantly accept the constraints
placed upon them; but once strong enough, they tend to wield their power
to change the status quo.7
Others are not as pessimistic. They are confident that China will and can
be socialized to conform to the existing international rules, and
consequently, a stronger China can make greater contributions and provide
public goods.8 Liberalism and constructivism, for instance, point to the
strength of international institutions and norms as sufficient constraints on
rising powers such as China, which over time will change and adapt lest its
aggressiveness invites counter-force and becomes detrimental to its own
self interests.9 China is making greater contributions—although much more
is still desired—to tackling regional and global challenges and problems.
These range from its participation in the international peacekeeping
operations, to chairing the Six-Party Talks on the North Korean nuclear
issues, to its stabilizing role in regional economic recovery and the global
financial sector.10
Critics of the power transition and offensive realism theories argue that
changes of relative capabilities cannot fully explain states’ foreign and
national security policies; it would not be able to account for the high
degree of cooperation among certain groups of countries. Clearly, there are
other variables that must be considered in not only explaining but also
anticipating states’ external policies and behaviors.11 Domestic political
structure, and historic and cultural heritage (experiences and hence
perceptions of war and peace, the nature of conflicts in human affairs, and
the efficacy of the use of force) can go a long way toward understanding
states’ particular policy stances and practices under specific circumstances.
In addition, domestic priorities will also inform policy and expenditure
decisions on defense and foreign affairs.12
However, disagreements on the scale, reach, and impact of China’s
growing power abound. One school of thought depicts a China ever more
powerful and confident that it is destined to rule the world one day. Or at
the minimum, it will re-establish its predominance in East Asia, as it did
before with its tributary system at once attracting and subjugating its
neighbors.13 With its growing power and influence, it will directly
challenge U.S. interests in Asia and the regional order Washington helped to
establish in the 1950s.14 Yet others suggest China is a highly insecure
power, facing both domestic challenges and external threats.15 Some argue
that the expectation of China becoming a stakeholder is misplaced as
Beijing remains a system free-rider, not bearing its share of the
responsibilities as a rising power.16 Given its domestic political structure
and the external constraints, it is unlikely that China will assume the mantle
of the next super-power anytime soon.17
These divergent views aside, China’s rise nonetheless already has had
significant impact on the global order, especially in the areas of trade and
finance.18 But it is in Asia that China’s growing power and influence have
the strongest impact. China today is the largest trading partner of all the
major countries in the region. It is active in regional diplomacy and
economic integration. And it is increasingly behaving in ways that cause
deep concerns among neighbors. This is particular the case where territorial
disputes are involved. But it also involves major changes in China’s
handling of regional security issues over the past few years, ranging from
stronger reactions to U.S. arms sales to Taiwan, to opposing U.S.-led joint
military exercises.19 These developments have in turn led regional powers
to more or less adopt hedging strategies in dealing with a rising China:
strengthening alliances with the United States; forming security alignments
among themselves; and using multilateral platforms to voice their concerns
and call for negotiations to deal with contentious issues.20

China as an insecure power

Beijing’s assessments of the post-Cold War international and regional
security environments have remained sanguine and, if anything, have
become more complicated. Indeed, as Andrew Nathan and Andrew Scobell,
two astute watchers of China point out, “[v]ulnerability to threats is the
main driver of China’s foreign policy.”21 This assessment is informed by an
understanding of China’s security from two different angles. One is a
redefinition of China’s security interests and strategic frontier. During the
Cold War, national survival was the predominant concern and hence
security policy hinged largely on preparing for “an early, major, and nuclear
war,” in particular in preparation against a land invasion from the Soviet
Union. Today, however, national security interests not only involve
sovereignty and territorial integrity, but also those that ensure China’s
continued economic growth as well as its political and social stability.22
A second angle derives from the expansion of China’s national security
interests. While a strong military remains critical in safeguarding national
security, increasingly, the development of the nation’s comprehensive
strength based on economic capabilities and scientific advancement is
equally important, which constitute critical components of a grand strategy
that in turn informs and determines China’s national security policy.23
Indeed, there is a strong economic rationale that underpins many of the
domestic and foreign policy decisions Beijing has made over the past three
decades—greater integration into the world economy, closer ties with the
industrialized countries for markets, investments, and technology transfers,
and the development of a stable security environment in China’s periphery
through bilateral and multilateral diplomacy.24
Despite (or perhaps because of) the fact that China has to operate within
the broader confine of a largely unipolar world dominated by the United
States, Beijing has until recently maintained a pragmatic, and oftentimes
low-profile foreign policy posture focused on economic development and
on its core national interests such as the Taiwan issue. China reacts strongly
when it perceives its core interests threatened by America’s predatory
behavior seen as directly and deliberately to harm Chinese interests.25 Even
as Chinese economic power and political influence continue to grow,
Beijing remains contented in behaving more like a regional power, and in
only selected areas on the international arena that give it more profile but
impose low costs has China chosen to play a more active role. This
pragmatic approach is based on the assessment of the overall shi (structure,
trend) in the international system, China’s role in terms of capabilities and
responsibilities, and the proper strategy to achieve its national goals.26
Contrary to the predictions of power-transition theorists, China seems to
have recognized the costs of assuming a leadership role and shouldering
more responsibilities and have largely refrained from challenging the
reigning power, the United States.27
The majority of Chinese analysts have a rather sanguine view of China’s
rise and recognize both the limitation and challenges that the country still
faces on its path to great power status; however, there are some who harbor
great ambitions and consider China’s time as a great power has arrived.
They want China to stand up against U.S. hegemonic behavior, especially
where it threatens Chinese interests. They conclude that the U.S. decline is
clear and present, as is the inevitable rise of other non-Western powers such
as the BRICS. Some even raise questions as to whether Deng Xiaoping’s
taoguang yanghui concept should continue to serve as a guide to Chinese
foreign policy.28 Global Times, a popular paper associated with the official
People’s Daily, regularly runs pieces that take pride in Chinese
achievements and are critical of Western, and in particular U.S., policies.
While against openly challenging U.S. primacy, many Chinese analysts
do advocate ways and means that can constrain U.S. power and influence, if
not exclude its presence in Asia. These include greater support of
international and regional institutions, partnerships with other great powers,
and exercise and promotion of Chinese soft power, in an effort to shape the
international norms even as it is being socialized into accepting them. Some
even suggest that China should re-examine its perspective on alliances,
especially on how external balancing could strengthen China’s position vis-
à-vis U.S.-led hub-spoke systems.29 Indeed, President Hu has called on the
country to make greater efforts in shaping the international environment
even as it continues to place economic development at the top of the policy
agenda. Here, yousuo zuowei (“take action”) does not contradict taoguang
yanghui, but requires China to be more active—albeit still selective in its
diplomacy.
Chinese perceptions of its growing power and influence are either stated
in official documents or expressed in more populous—and at times hawkish
—opinions by the indulging public. Clearly, from the “great rejuvenation of
the Chinese nation” to the “China Dream,” official propaganda extols the
country’s more than 5,000 years of civilian and major achievements of the
past and calls for greater efforts in building China into a major power of
regional and global reach. Palpable change can be felt in Beijing’s public
stands on a range of issues, from climate change negotiation in
Copenhagen, to territorial disputes in the East and South China Seas. At the
same time, public opinion, rising nationalism, and inflaming commentaries
from pundits reflect and reinforce the perception of a rising China that
should stand up for its national interests, and have been at once exploited by
and imposed constraints on Beijing in executing foreign policy. However,
one could argue these ostensible changes are more rhetorical, reactive, and
opportunistic than substantive and permanent. If anything, there is good
evidence that continuity, in both assessing Chinese interests and
formulating its foreign and security policy accordingly, remains strong and
in place, its growing power and influence notwithstanding.30 In a highly
publicized article, then State Councilor Dai Bingguo emphasized that China
will continue to adhere to the peaceful development path and has no
intention of replacing the United States as the new hegemon. The way
China will exercise its growing power and influence is to be a more active
participant in helping to deal with global and regional challenges/issues
ranging from energy, food security, climate change, terrorism, to finance,
WMD proliferation, and development.31
As a rising power, one that is quite unique in the chronicle of great power
cycles, China has remained less developed compared to the major
industrialized countries even though it has an aggregated economy second
only to the United States. The dilemma and challenge that Beijing faces is
that while it still has a long way to go in closing the gap between itself and
the industrial North, the fact it has grown so fast has already stoked fears
and concerns among some of its neighbors. Not surprisingly, just as the
region’s major powers move closer to China in economic interdependence,
they are also moving toward tighter security alignments with the United
States. Washington, having lost a decade mired in the Afghan and Iraqi
quagmire, is now refocusing on Asia, or the wider Indo-Pacific region as it
seeks to retain its primacy. The pivot, or the rebalancing strategy, consists
of a combination of military, diplomatic, and economic offensives against
the background of China’s rise over the past decade.32
From Beijing’s perspective, U.S. rebalancing is clearly aimed at China.
But openly confronting the U.S. could derail China’s strategic objectives
and further deteriorate its external environment for economic development.
China’s grand strategy, or the key components of such a strategy, caution
against rash actions that could only worsen the security dilemmas.33 There
are many reasons why China has chosen to not challenge the United States.
Costs are a major consideration. China’s military, despite the progress since
the 1990s, remains decades behind the U.S. military in terms of defense
spending, weapons systems, and most importantly, real war fighting
experience. On the other hand, notwithstanding the significant loss in blood
and treasure over a decade of wars in Afghanistan and Iraq, America
remains resilient, and still out-spends almost the rest of the world
combined; China, on the other hand, has seen its fortune rise in the
aftermath of the 9/11 terrorist attacks but its gains over the decade have
been outweighed by developments that can complicate and potentially even
undermine its security.34 China could exercise more influence but not
dominate in East Asia. If anything, it faces potential rivals from Japan to
India, which are either U.S. allies, or partners with Washington.
Consequently, within East Asia, where China’s rise would have the most
impact, Beijing’s approach has been to develop a managed great-power
relationship with the United States and other key players, rather than
seeking regional dominance.35
At the same time, China’s expanding presence in all continents as its
overseas investments and projects grow also expose Chinese personnel to
greater risks, which in turn pose another challenge to Beijing in protecting
Chinese citizens and properties. This last point is closely related to the
phenomenal expansion of what analysts have called China’s international
activism, driven largely by its growing activities in international trade and
overseas investments, the search for energy and resources, and its
contribution to international peacekeeping and anti-piracy operations.
Beijing has been trying to adjust and adapt to these new challenges and
demands with better coordination between different government agencies at
both the central and local levels, and enterprises operating in foreign
countries, even though a truly centralizing and coordinating body like the
U.S. National Security Council has yet to be introduced.36 Only in limited
areas such as peacekeeping and anti-piracy, where the PLA plays a
predominant role and where the chain of command is easily and better
established, have formulation and implementation of policy been more
effectively executed, winning Beijing kudos from the international
community.37

Beijing flaunts power: domestic drivers and external

constraints
Analyses of China’s rise and its implications—whether it is realism or
liberalism—have focused predominantly on the structural opportunities,
incentives, and constraints that can affect Beijing’s foreign policy behavior
and strategies. Domestic factors such as ideas, players, policy making
processes, and the extent to which these variables are arranged and played
out have received less attention than is warranted. Granted, while it still
remains extremely difficult to look into the “black box” of Chinese foreign
policy making, researchers today have much greater access than before to
information and debates in China that can provide the basis for informed
analysis.38 From the official propaganda one gets the sense that debates in
China on the country’s rise are by and large guided by the concepts of
revitalization and rejuvenation of a great civilization and a power in its
rightful place in the world; determination to right the wrongs inflicted on
China during its 100 years of humiliation—and hence a strong emphasis on
sovereignty and territorial integrity; and the path to great-power status:
continued economic growth and the development of comprehensive
national strength, which, as we pointed out earlier, depend on a stable
international environment and the ability to secure critical inputs—capital,
technologies, labor, and resources.39
The results of over three decades of economic reforms and opening up
are a gradual decentralization process that now has to accommodate the
increasing number of actors in China’s foreign policy making, who pursue
multiple interests that are not always compatible with what can be described
as Chinese national interests. On the contrary, some of China’s biggest
state-owned companies, and indeed the national oil companies (NOCs),
pursue strategies that sometimes can undermine Chinese foreign policy
goals and tarnish Beijing’s reputation. At the same time, because of the
emerging and ongoing debates within China on what the country should do
as its power grows, it is harder to pin down what the dominating ideas are,
whether and to what extent they can actually influence and shape foreign
policy.40
The Chinese military, aka the PLA (Peoples’ Liberation Army), remains a
key player in national security policy making. China’s growing power and
the new historic missions that the Party has assigned to the military enable
the PLA to have a greater say on national security as it demands and
receives greater resources for modernization. In recent years, the PLA has
achieved major milestones and breakthroughs. These include new weapons
systems, including the launch of its first aircraft carrier, advanced fighter
aircraft and surface battle ships, and ballistic and cruise missiles; better and
more realistic training and joint exercises with foreign militaries; and
dispatches of naval escort fleets to the Gulf of Aden that provide real-time
experiences of long-distance operations and logistic support.41 The PLA’s
role in national security policy making is particularly important and has the
most influential impact on issues relating to Taiwan, Sino-U.S. relations,
and territorial disputes in the East and South China Seas.42 However, this
should not be construed as either the civilian (i.e. CCP) side losing control
over the gun, or any major discordance in civil–military relations. The PLA
has been given the autonomy to develop professionalism and enhance war-
fighting capabilities, as well as substantive increases in annual defense
budgets. In return, the military publicly expresses its support of the civilian
leadership’s key policy positions and offers professional advice on how best
to protect national security interests. Nonetheless, due to the absence of a
national security coordinating body (such a body was recently announced at
the 3rd Plenum of the 18th CCP Central Committee in November 2013,
although details remain vague), from time to time, there appear different
voices and indeed a gap between the central leadership’s foreign policy
objectives at the strategic level and their execution at the operational
level.43
The past few years have witnessed the PLA’s growing role in national
security policy making in at least two important ways. One is the
increasingly hawkish voice from the military. Some analysts suggest that
regardless of the specific periods of frequent vicissitudes in Beijing’s
relations with Washington, the Chinese military has persistently viewed the
United States as a major threat to China. This attitude has been reinforced
by U.S. arms sales to Taiwan, its recent pivot to Asia where Washington has
consolidated and even expanded its security ties with its Asian allies, and its
ostensibly neutral but in effect biased positions against China on regional
security issues. This has been not only reflected in the opinion pieces and
analyses of the well-known soldier-scholars or retired generals, but also
expressed by serving ranking officers at such forums as the Shangri-la
dialogues.44 The other indicator of the PLA’s growing influence is the more
frequent and public display of its prowess through military exercises, power
projection capabilities, such as the PLA Navy’s Gulf of Aden anti-piracy
escorts, and major weapons procurement, including the new-generation
fighter aircraft and the country’s first aircraft carrier Liaoning.45
Media and public opinion has often played very important roles in
democratic societies. They hold public servants and elected officials
accountable and serve as barometers for politicians to craft elections
platforms, develop programs, and introduce and change laws to meet the
demands of the voters, and increasingly also influence foreign policy
formulation and implementation. However, debates continue on exactly
how critical media and public opinions affect politics, how policy makers
try to influence media and news contents, which in turn feed the public and
cause it to form opinions in one way or another. In other words, the
relationship between media, public opinion and foreign policy can be
viewed as a continuous loop and interactive.46
It is increasingly difficult for the Chinese authorities to completely
control or censor news or information these days on issues of public
interest, such as relations with the United States, Japan, India, or territorial
disputes in the South China Sea. The commercialization of media means
there are more outlets for news coverage. More citizens are interested in
international affairs and their perceptions and sentiments on certain events
and public opinion become pressure points on the government. Indeed,
Beijing can ill afford to be seen as weak-kneed in its handling of sensitive
issues such as sovereignty and territorial integrity. Certain media such as
Global Times often publish articles that reinforce the public’s nationalist
sentiments. All of these impose considerable constraints on policy makers
and at times become impediments to effective execution of diplomacy.47
As a result, public opinion and the changing media are having a growing
impact on both the process and substance of Chinese foreign policy making.
Gone are the days when Beijing could control information and present
events however it saw fit. Increasing access to internet and other electronic
media allows growing numbers of Chinese to acquire news, express
opinions, or otherwise be exposed to ideas and information not controlled
by the Communist Party. While public opinion and interest groups have yet
to have any significant impact on Chinese foreign policy making, rising
nationalism can impose serious constraints on Beijing in its handling of
sensitive issues ranging from territorial disputes and ethnic conflicts, to
Taiwan and Sino–U.S. relations. Equally important, the fact that public
opinion and growing nationalism could limit the government’s options
could also be exploited by Beijing to extort concessions from its foreign
counterparts, especially if and when it could effectively manipulate the
potential “leaving thing to chance” consequences as diplomatic leverage.48
Since 2008, Beijing has resorted to economic, diplomatic, and military
power in dealing with regional security issues. On the one hand, Beijing has
sought to maintain a foreign policy consistency in projecting a reassuring
posture of a peaceful rise and development of cordial and friendly
relationships with its neighbors. In late October 2013, the Chinese
leadership held, for the first in the PRC’s history, a high-level meeting
dedicated to periphery diplomacy, with all Standing Committee members
attending. Clearly, a stable and peaceful periphery environment would be
conducive to China’s continued economic growth and prosperity. However,
to achieve this objective requires winning friends and projecting an
amicable and trustworthy image. Regaining and further strengthening
China’s soft power influence in the region would be critical toward
achieving that end.49 On the other hand, it has clearly departed from
previous low-key and reactive approaches to contentious issues in the
region, most prominently territorial disputes. There are a number of specific
approaches that have been employed. One is to establish administrative
routines and enforcement. For instance, Sanya City and the Hainan’s
People’s Congress passed a resolution granting maritime agencies authority
to stop and search vessels in Chinese waters. Another is the controversial
adoption of a new e-passport with a Chinese map of the contentious
territories. Yet a third is to invite foreign oil companies for joint drilling in
the area.50
Various actors, in their specific roles, have been more active in pursuing
their individual agendas, with the totality of these actions undertaken
conveying a more assertive Chinese regional policy, even though at the
official level no significant policy shift has taken place.51 Specifically, these
involve the Impeccable incident of March 2009, where Beijing contended
that the U.S. surveillance ship operated within China’s exclusive economic
zone (EEZ) without permission, a direct challenge to the ability of the U.S.
to navigate in international waters, which in turn could undermine its
regional strategy and cause deep concerns among its allies and partners on
its trustworthiness and reliability as a security guarantor.52 The ongoing
stand-off between China and the Philippines over the sovereignty of the
Scarborough Shoal (called Huangyan Dao in Chinese and Panatag Shoal
by the Philippines) has seen Chinese use of maritime enforcement in
conjunction with the PLA Navy, in establishing effective control over the
disputed island. Likewise, in the aftermath of Japan’s nationalization of the
three islands in the Diaoyu/Senkakus island group, the Chinese have
instituted routine aerial and maritime patrols in the vicinity, changing the
previous status of sole Japanese administrative control. These forceful uses
of maritime and/or paramilitary instruments to assert Chinese claims over
the disputed territories have been dubbed as a “new normal” in Beijing’s
handling of such issues, and are in no small measure a result of both its
growing power and public pressures for stronger actions.53
Behind this “new normal” is a deliberate and calculated, yet still reactive
but more resolute “one plus” tactic, that is, China will respond to any
encroachment of its sovereignty by pressing hard its own sovereign claims
further. This reactive assertiveness serves to send a clear signal to other
claimant parties that Beijing would prefer a stable status quo ante. However,
if provoked, then it will go beyond the original status quo to establish a new
one.54 China’s response to Japan’s nationalization of the three islands in the
Diaoyu/Senkakus Islands is a case in point. Since October 2012, in response
to Tokyo’s unilateral action that changed the status quo both had maintained
and tacitly agreed to since the 1970s, Beijing has in effect introduced and
steadily increased both the frequency and extent of its administrative patrols
over the area, including maritime surveillance and aerial flights over,
forcing the Japanese side to accept a new status quo. In late October 2013,
the Chinese Defense Ministry further announced the establishment of an Air
Defense Identification Zone (ADIZ) that overlaps with Japan’s ADIZ and
covers the disputed Diaoyu/Senkakus Islands.55 It is not entirely clear if this
new tactic is directly linked to or even encouraged by the new Xi Jinping
leadership but one thing is quite obvious. Xi is both more resolute and
forceful in putting forth Chinese foreign policy agendas and confident in
their execution in a style that is in sharp contrast to his predecessor. While
the fundamental worldviews and strategic visions for China may remain the
same, Xi clearly is moving away from a low-profile, passive foreign policy
stance toward embracing bolder diplomacy befitting a rising great power.56
China’s multiple maritime surveillance and enforcement agencies were
most active and visible in such undertakings, partly driven by their own
interests in securing more power and resources. It was not until March
2013, when the National People’s Congress was finally able to bring them
all under one department—the State Oceanic Administration, with a view to
achieving more streamlined and unified maritime operations in dealing with
maritime issues beyond territorial disputes, including marine and
environment management, anti-piracy and illicit activities, among others.57
And, finally, there is the use of economic power to make a point. In the
aftermath of the July 2010 Japanese detention of the captain of a Chinese
trawler, not only had eruption of public protests against Japan taken place in
major Chinese cities and official demands for compensation, there was also
a reported embargo of rare earth exports to Japan, which could impose
serious costs on the latter’s economic interests.58
These developments clearly both reflect and have been driven by China’s
growing power and influence in Asia in the aftermath of the 2008 global
financial crisis, which has seen a declining United States but a relatively
unscathed and more confident China. Either out of self-interest or pushed
by rising nationalist sentiments, Chinese behaviors appear to be more
assertive, and at times even abrasive and coercive. It is not clear, however,
whether the past five years witness fundamental departure from established
pattern of a cautious, selective, and low-profile foreign policy as enjoined
by Deng Xiaoping’s taoguang yanghui principle on the one hand, or a more
assertive foreign policy hijacked by growing nationalism, over-confidence,
and a complete misjudgment of the broader global and regional geo-
strategic landscapes and China’s own limitation and vulnerability. The jury
is still out.59

Conclusion
China’s growing power is affecting the regional and global geo-strategic
environments just as they in turn impose constraints and offer opportunities
for Beijing. Most analysts agree that China’s rise will continue, albeit at a
slower pace, and that it does matter as it interacts with the dynamics of
international and regional structure, stoking concerns just as much as it
offers prospects of stability and economic growth for its neighbors and
distant powers, friends, neutrals, and potential competitors and even rivals
alike.
The growth of Chinese power can be assessed on both statistical and
perceptual terms, with differing implications for policy makers. The facts
that China has a large population but relatively poor endowments in
resources, that its economic structure has generated unprecedented growth
but also imposes significant costs and limits its future potentials, and that its
demographic trends and environmental constraints, not to mention the
socio-economic disparity between various parts and different sectors in the
country, all caution against exaggeration of China’s ability and indeed its
willingness to extend its influence, exercise power, or even aspire to replace
the United States as number one.
But the aggregates of its power, and its recent assertive foreign policy
behavior, both induced by external developments but further fed by
domestic nationalist sentiments, have caused much concern, mostly from its
neighbors and the United States. China is at a tipping point as it marches
toward great power stardom, with a new generation of leaders coming into
power, and a growing multitude of players with divergent and sometimes
competing interests, and with public opinion and nationalism. Ironically, as
China’s power and influence grow, instead of shaping a regional order as it
existed before, it is in fact causing the other powers to hedge against rather
than bandwagon with China. Unless and until Beijing re-evaluates its
foreign policy and exercises greater constraints in its military posture and
approaches to territorial disputes, it is likely to push a regional order into a
bipolar structure, resulting in instability and probably even confrontation
between itself and the United States.
The last few years have witnessed ostensible changes in the ways in
which Beijing conducts its foreign policy. It is becoming more assertive and
unequivocal in both voicing and defending what it perceives as core
national interests. It is more willing to showcase and exercise its new-found
economic power and military prowess through selective and signaling
sanctions and display of force. It has responded to external challenges with
counter-challenge measures that establish a new normal and status quo, and
it at times appears to risk confronting major opponents all at once. The new
leadership under Xi Jinping clearly is no longer taking a low-key, passive
approach to national security and foreign policy matters. However, there is
also continuity in that Beijing remains cognizant of the importance of
maintaining a stable and peaceful periphery, a preference for bilateral rather
than multilateral approaches to negotiating territorial disputes, and
opposition to internationalization of regional issues, in particular the
involvement of the United States. For the foreseeable future, a key
challenge to the Chinese leadership would be to close the gap between the
growing expectation and rising nationalism as a result of China’s rise on the
one hand, and diplomatic skills, policy coordination, and crisis management
on the other.

Notes
1 Hurrell, Andrew, “Hegemony, Liberalism and Global Order: What Space for Would-be Great
Powers?” International Affairs, 82:1, 2006, 1–19; Schweller, Randall L. and Xiaoyu Pu, “After
Unipolarity: China’s Visions of International Order in an Era of U.S. Decline,” International
Security, 36:1, 2011, 41–72; Ikenberry, G. John, “The Rise of China and the Future of the West:
Can the Liberal System Survive?” Foreign Affairs, 87:1, January/February 2008, 23–37.
2 Medeiros, Evan S., China’s International Behavior: Activism, Opportunism, and Diversification,
Santa Monica: RAND, 2009; Liu, Mingfu, Zhongguo meng: hou meiguo shidai de daguo siwei
zhanlue dingwei [The China Dream: The Great Power Thinking and Strategic Positioning of
China in the Post-American Age], Beijing: Zhongguo youyi chuban gongsi, 2010; Jacques,
Martin, When China Rules the World: The Rise of the Middle Kingdom and the End of the
Western World, New York: Penguin, 2009.
3 Wang, Jisi, “China’s Search for a Grand Strategy,” Foreign Affairs, 90:2, March/April 2011, 68–
79; Chin, Gregory and Ramesh Thakur, “Will China Change the Rules of Global Order?” The
Washington Quarterly, 33:4, October 2010, 119–138; Irvine, Roger, “Primacy and
Responsibility: China’s Perception of Its International Future,” China Security, 6:3, 2010, 23–
42.
4 National Intelligence Council, Global Trends 2030; Talley, Ian, “U.S. Intelligence Sees China as
the World’s Largest Economy by 2030,” Wall Street Journal, December 10, 2012; Dyer, Geoff,
“Pax Americana ‘Winding Down’, Says US Report,” Financial Times, December 10, 2012.
5 Areddy, James T., “U.S. Seen Losing to China as World Leader,” Wall Street Journal, July 18,
2013. See also Zhang, Yongjin, “ ‘China Anxiety’: Discourse and Intellectual Challenges,”
Development and Change, 44, 2013, 1407–1425.
6 Lampton, David, The Three Faces of Chinese Power: Might, Money, and Mind, Berkeley:
University of California Press, 2008; Bergsten, C. Fred, Charles Freeman, Nicholas R. Lardy,
and Derek J. Mitchell, China’s Rise: Challenges and Opportunities, Washington, D.C.: Peterson
Institute for International Economics and Center for Strategic and International Studies,
September 2008; Ross, Robert S. and Zhu Feng, (eds), China’s Ascent: Power, Security, and the
Future of International Politics, Ithaca and London: Cornell University Press, 2009; Halper,
Stefan, The Beijing Consensus: How China’s Authoritarian Model will Dominate the Twenty-
First Century, New York: Basic Books, 2010; Dittmer, Lowell and George T. Yu (eds), China,
the Developing World, and the New Global Dynamic, Boulder and London: Lynne Rienner
Publishers, 2010.
7 Measheimer, John, The Tragedy of Great Power Politics, New York: W.W. Norton, 2001;
Gilpin, Robert, War and Change in World Politics, Cambridge: Cambridge University Press,
1981; Organski, A.F.K. and Jacek Kugler, The War Ledger, Chicago: University of Chicago
Press, 1980.
 8 Johnston, Alastair Iain, Social States: China in International Institutions, 1980–2000, Princeton:
Princeton University Press, 2008.
9 Johnston, Social States; Ikenberry, G. John, Liberal Leviathan: The Origins, Crisis, and
Transformation of the American World Order, Princeton: Princeton University Press, 2011.
10 Economy, Elizabeth and Michel Oksenberg (eds), China Joins the World, New York: Council on
Foreign Relations, 1999; Gill, Bates and Chin-hao Huang, China’s Expanding Peacekeeping
Role: Its Significance and Policy Implications, SIPRI Policy Brief, Stockholm: Stockholm
International Peace Research Institute, February 2009; Snyder, Scott, China’s Rise and the Two
Koreas, Boulder and London: Lynne Rienner Publishers, 2009.
11 See, for example, Fravel, M. Taylor, “International Relations Theory and China’s Rise:
Assessing China’s Potential for Territorial Expansion,” International Studies Review, 12, 2010,
505–532; Kirshner, Jonathan, “The Tragedy of Offensive Realism: Classical Realism and the
Rise of China,” European Journal of International Relations, August 2010, 1–23.
12 Johnston, Alstair Iain, Cultural Realism, Princeton: Princeton University Press, 1995; Lai,
Hongyi, The Domestic Sources of China’s Foreign Policy: Regimes, Leadership, Priorities and
Process, London: Routledge, 2010.
13 Jacques, Martin, When China Rules the World; Kang, David C., China Rising: Peace, Power,
and Order in East Asia, New York: Columbia University Press, 2007.
14 Friedberg, Aaron L., A Contest for Supremacy: China, America, and the Struggle for Mastery in
Asia, New York: W.W. Norton, 2011; Swaine, Michael D., America’s Challenge: Engaging a
Rising China in the Twenty-First Century, Washington, D.C.: Carnegie Endowment for
International Peace, 2011; Shambaugh, David (ed.), Tangled Titans: The United States and
China, Lanham, MD: Rowman & Littlefield, 2013.
15 Shirk, Susan, China: Fragile Superpower, New York: Oxford University Press, 2007; Nathan,
Andrew J. and Andrew Scobell, China’s Search for Security, New York: Columbia University
Press, 2012.
16 Hachigian, Nina with Winny Chen and Christopher Beddor, China’s New Engagement in the
International System: In the Ring, but Punching below Its Weight, Washington, D.C.: Center for
American Progress, November 2010; Shambaugh, David, China Goes Global: The Partial
Power, New York: Oxford University Press, 2013.
17 Gurtov, Mel, Will This be China’s Century? A Skeptic’s View, Boulder and London: Lynne
Rienner, 2013; Beckley, Michael, “China’s Century? Why America’s Edge will Endure,”
International Security, 36:1, Winter 2011–12, 41–78.
18 Gregory and Thakur, “Will China Change the Rule of Global Order?”; Breslin, Shaun, “China
and the Global Order: Signaling Threat or Friendship?” International Affairs, 89:3, May 2013,
615–634.
19 See the series reports on China’s assertiveness provided by Swaine, Michael D., in China
Leadership Monitor, various issues; Special issue, “The Rise of China and the Regional
Responses in the Asia-Pacific,” Journal of Contemporary China, 21:73, 2012. See also,
Friedberg, A Contest for Supremacy.
20 Luttwak, Edward N., The Rise of China vs. the Logic of Strategy, Cambridge, MA: The Belknap
Press of Harvard University Press, 2012.
21 Nathan, Andrew J. and Andrew Scobell, China’s Search for Security, New York: Columbia
University Press, 2012, quote on p. 3.
22 Holslag, Jonathan, “China’s Vulnerability Trap,” Survival, 53:2, April–May 2011, 77–88;
Dannreuther, Roland, “China and Global Oil: Vulnerability and Opportunity,” International
Affairs, 87:6, November/December 2011, 1345–1364.
23 Yan, Xuetong, “The Rise of China and its Power Status,” Chinese Journal of International
Politics, 1, 2006, 5–33; Wang, Jisi, “China’s Search for a Grand Strategy,” 68–79.
24 Economy, Elizabeth and Michel Oksenberg (eds), China Joins the World, New York: Council on
Foreign Relations, 1999; Gill, Bates, Rising Star: China’s New Security Diplomacy,
Washington, D.C.: Brookings Institution Press, 2007.
25 Kucharski, Milosz, “China in the Age of American Primacy,” International Relations, 26:1,
2011, 60–77; Wang, Yuan-kang, “China’s Response to the Unipolar World: The Strategic Logic
of Peaceful Development,” Journal of Asian and African Studies, 45:5, 2010, 554–567; Fingar,
Thomas, “China’s Vision of World Order,” in Ashley J. Tellis and Travis Tanner (eds), Strategic
Asia 2012–13: China’s Military Challenge, Seattle and Washington, D.C.: National Bureau of
Asian Research, 2012, 343–373.
26 Zhu, Liqun, China’s Foreign Policy Debates, Chailott Papers, Paris: Institute of Security
Studies/European Union, September 2010.
27 Chan, Steve, China, the U.S., and the Power Transition Theory: A Critique, New York:
Routledge, 2008.
28 Liu, Zhongguo meng; Zhang, Weiwei, The Chinese Wave: Rise of a Civilizational State, World
Century Publishing Corporation, 2012; Chen, Dingding and Jianwei Wang, “Lying Low No
More? China’s New Thinking on the Tao Guang Yang Hui Strategy,” China: An International
Journal, 9:2, 2011, 195–216.
29 Wuthnow, Jeol, Xin Li, and Lingling Qi, “Diverse Multilateralism: Four Strategies in China’s
Multilateral Diplomacy,” Journal of Chinese Political Science, 17, 2012, 269–290; Li,
Mingjiang, Soft Power: China’s Emerging Strategy in International Politics, Lexington:
Lexington Books, 2009; Li, Mingjiang and Chen Gang, “China’s Search for a Multilateral
World: Dilemmas and Desires,” The International Spectator, 45:4, December 2010, 13–25;
Zhang, Feng, “China’s New Thinking on Alliances,” Survival, 54:5, October/November 2012,
129–148.
30 Scobell, Andrew and Scott W. Harold, “An ‘Assertive’ China? Insights from Interviews,” Asian
Security, 9:2, 2013, 111–131; Chubb, Andrew, “Propaganda, Not Policy: Explaining the PLA’s
‘Hawkish Faction’,” China Brief, XIII:15, July 26, 2013, 6–11; Zhao, Suisheng, “Foreign Policy
Implications of Chinese Nationalism Revisited: the Strident Turn,” Journal of Contemporary
China, 22:82, 2013, 535–553.
31 Dai, Bingguo, “Adhere to the Path of Peaceful Development,” December 6, 2010,
www.gov.cn/ldhd/2010–12/06/content_1760381.htm.
32 Stuart, Douglas, “San Francisco 2.0: Military Aspects of the U.S. Pivot toward Asia,” Asian
Affairs: An American Review, 39:4, 2012, 202–218; Gordon, Bernard K., “Trading Up in Asia:
Why the United States Needs the Trans-Pacific Partnership,” Foreign Affairs, 91:4, July/August
2012, 17–22; “Roundtable: Regional Perspectives on U.S. Strategic Rebalancing,” Asia Policy,
January 2013; “Cover Story: U.S. ‘Pivot to Asia’,” Global Asia, 7:4, Winter 2012.
33 Heath, Timothy R. “What Does China Want? Discerning the PRC’s National Strategy,” Asian
Security, 8:1, 2012, 54–72; Zhang, Feng, “Rethinking China’s Grand Strategy: Beijing’s
Evolving National Interests and Strategic Ideas in the Reform Era,” International Politics, 49:3,
2012, 318–345.
34 Hoehler, Mark, “The Effects of 9/11 on China’s Strategic Environment: Illusive Gains and
Tangible Setbacks,” Joint Forces Quarterly, 68:1, January 2013, 91–98; Babones, Salvatore,
“The Middle Kingdom: The Hype and the Reality of China’s Rise,” Foreign Affairs, 90:5,
September/October 2011; Coonen, Steve, “The Empire’s Newest Clothes: Overrating China,”
Joint Forces Quarterly, 63:4, 2011, 84–91; Scobell, Andrew and Andrew Nathan, “China’s
Overstretched Military,” The Washington Quarterly, 35:4, Fall 2012, 135–148.
35 Zhao, Quansheng, “Managed Great Power Relations: Do We See ‘One-Up and One-Down’?”
Journal of Strategic Studies, 30:4–5, August/October 2007, 609–637.
36 Cabestan, Jean-Pierre, “China’s Foreign-and Security-policy Decision-making Processes under
Hu Jintao,” Journal of Current Chinese Affairs, 38:3, 2009, 63–97.
37 Gill and Huang, China’s Expanding Role in Peacekeeping; Lin-Greenberg, Erik, “Dragon Boats:
Assessing China’s Anti-Piracy Operations in the Gulf of Aden,” Defence and Security Analysis,
26:2, June 2010, 213–230.
38 Lampton, David M., The Making of Chinese Foreign and Security Policy in the Era of Reform,
Stanford: Stanford University Press, 2001.
39 Legro, Jeffrey W., “What China will Want: The Future Intentions of a Rising Power,”
Perspectives on Politics, 5:3, September 2007, 515–533; Hart, Andrew F. and Bruce D. Jones,
“How do Rising Powers Rise?” Survival, 52:6, December 2010/January 2011, 63–88.
40 Jakobson, Linda and Dean Know, New Foreign Policy Actors in China, SIPRI Policy Paper 26,
Stockholm: SIPRI, September 2010; Shambaugh, David, “Coping with a Conflicted China,” The
Washington Quarterly, 34:1, Winter 2011, 7–27; Su, Changhe, “Understanding Chinese
Diplomatic Transformation: A Multi-Actor’s Perspective,” The Hague Journal of Diplomacy, 5,
2010, 313–329; Chen, Zhemin, Jian Junbo, and Chen Diyu, “The Provinces and China’s Multi-
Layered Diplomacy: The Cases of GMS and Africa,” The Hague Journal of Diplomacy, 5, 2010,
331–356; Lai, Hongyi and Su-jeong Kang, “Domestic Bureaucratic Politics and Chinese
Foreign Policy,” forthcoming, Journal of Contemporary China, 2013,
doi.org/10.1080/10670564.2013. 832531.
41 These developments have been described in studies undertaken by the U.S. National Defense
University’s National Institute of Strategic Studies, Center for Naval Analysis, U.S. Army War
College’s Strategic Studies Institute, Congressional Research Service, and the National Bureau
of Asian Research, including, most recently, Tellis and Tanner, China’s Military Challenge.
42 Michael Swaine’s 1998 study, The Role of the Chinese Military in National Security
Policymaking (revised edn, Santa Monica: RAND), remains the classic in this regard. A regular
and timely analysis is provided by James Mulvenon in his quarterly analysis of the PLA in the
Hoover Institute’s China Leadership Monitor.
43 You, Ji, “The PLA and Diplomacy: Unraveling Myths about the Military Role in Foreign Policy
Making,” Journal of Contemporary China, 22, 2013, doi.org/10.1080/10670564.2013.832526;
Li, Nan, Chinese Civil-Military Relations in the Post-Deng Era: Implications for Crisis
Management and Naval Modernization, CMSI Study No. 4, New Port, RI: China Maritime
Studies Institute, U.S. Naval War College, January 2010.
44 Liu, Yawei and Justine Zheng Ren, “An Emerging Consensus on the US Threat: the United
States according to PLA Officers,” Journal of Contemporary China, 23, 2014,
doi.org/10.1080/10670564.2013.832527.
45 Erickson, Andrew S. and Austin M. Strange, No Substitute for Experience: Chinese Anti-Piracy
Operations in the Gulf of Aden, CMSI China Maritime Study No. 10, New Port, RI: Chinese
 Maritime Studies Institute, Naval War College, November 2013; Erickson, Andrew S. and Gabe
Collins, “China Carrier Demo Module Highlights Surging Navy,” The National Interest, August
6, 2013, http://nationalinterest.org/commentary/china-carrier-demo-module-highlights-surging-
navy-8842; Tellis, Ashley J. and Travis Tanner, eds, Strategic Asia 2012–13: China’s Military
Challenge, Seattle, WA: National Bureau for Asian Research, October 2012.
46 Baum, Matthew A. and Philip B.K. Potter, “The Relationships between Mass Media, Public
Opinion, and Foreign Policy: Toward a Theoretical Synthesis,” Annual Review of Political
Science, 11, June 2008, 39–59.
47 Wang, Jianwei and Xiaojie Wang, “Media and Chinese Foreign Policy,” Journal of
Contemporary China, 23, 2014, doi.org/10.1080/10670564.2013.832523; Shirk, Susan L.,
“Changing Media, Changing Foreign Policy,” in Susan L. Shirk (ed.), Changing Media,
Changing China, New York: Oxford University Press, 2011, 225–252.
48 Weiss, Jessica Chen, “Authoritarian Signaling, Mass Audiences, and Nationalist Protests in
China,” International Organization, 67:1, January 2013, 1–35; Stockmann, Daniela, “Who
Believes Propaganda? Media Effects During the Anti-Japanese Protests in Beijing,” The China
Quarterly, 202, June 2010, 269–289.
49 Xinhua, “Xi Jinping Makes Important Speech at Meeting on Periphery Diplomacy,” October 25,
2013, http://news.xinhuanet.com/politics/2013–10/25/c_117878897.htm.
50 Raine, Sarah and Christian Le Mière, “Regional Disorder: the South China Sea Dispute,”
Adelphi Papers, 53:436–437, London: Routledge, for the International Institute for Strategic
Studies, 2013; Yahuda, Michael, “China’s New Assertiveness in the South China Sea,” Journal
of Contemporary China, 22, 2013, 446–459; Special issue, Shijie Zhishi [World Affairs], 2,
2013, 14–25.
51 Interview with Chinese security analyst, Shanghai, June 2013.
52 Mastro, Oriana Skylar, “Signaling and Military Provocation in Chinese National Security
Strategy: A Closer Look at the Impeccable Incident,” Journal of Strategic Studies, 34:2, April
2011, 219–244.
53 Holmes, James, “China’s New Normal in the South China Sea,” China-US Focus, July 4, 2013;
Chellaney, Brahma, “China’s Salami-Slice Strategy,” Japan Times, July 25, 2013.
54 You, Ji, Deciphering Beijing’s Maritime Security Policy and Strategy in Managing Sovereignty
Disputes in the China Seas, Policy Brief, Singapore: S. Rajaratnam School of International
Studies, Nanyang Technological University, October 2013.
55 Harlan, Chico, “China Creates New Air Defense Zone in East China Sea amid Dispute with
Japan,” Washington Post, November 23, 2013.
56 He, Kai and Feng Huiyun, “Xi Jinping’s Operational Code Beliefs and China’s Foreign Policy,”
The Chinese Journal of International Politics, 6, 2013, 209–231; François Godement, Xi
Jinping’s China, Essay No. 85, Brussels: European Council on Foreign Relations, July 2013.
57 See, for example, Goldstein, Lyle J., Five Dragons Stirring up the Sea: Challenges and
Opportunities in China’s Improving Maritime Enforcement Capabilities, Newport, RI: China
Maritime Studies Institute, U.S. Naval War College, 2010; Perlez, Jane, “Chinese, with
Revamped Force, Make Presence Known in East China Sea,” New York Times, July 27, 2013.
58 Krugman, Paul, “Rare and Foolish,” New York Times, October 17, 2010; Hurst, Cindy A.,
“China’s Ace in the Hole: Rare Earth Elements,” Joint Forces Quarterly, 59:4, 2010, 121–126.
59 Johnston, Alastair Iain, “How New and Assertive Is China’s New Assertiveness?” International
Security, 37:4, Spring 2013, 7–48; Shambaugh, China Goes Global.
3 China’s military buildup
Regional repercussions
Richard A. Bitzinger

Beijing may tout its continued military buildup as part of its “peaceful rise”
or “peaceful development,” but reactions outside of China have been
anything but sanguine. There is genuine concern throughout the Asia and the
Pacific Rim that this expansion of military power is a prelude to a more
aggressively assertive China – and one that is prepared to use its growing
armed might to press its national interests and back up its various
geopolitical claims. This unease is reinforced by the increasingly volatile
rhetoric coming out of Beijing – for example, when it comes to claims of
“indisputable sovereignty” over much of the South China Sea1 – as well as
its ostensibly provocative activities in adjacent seas and airspaces, such as
harassing the USNS Impeccable in March 2009, sending warplanes over the
median line with Taiwan, or establishing the Sansha administrative
prefecture within the Paracel and Spratly islands.
Consequently, several nations that are the most directly affected by a more
militarily capable and assertive China have reacted in kind: by undertaking
their own military responses to this buildup. In particular, Japan, India, and
several nations in Southeast Asia are beginning to at least partially justify
their current military modernization programs as a hedge against Chinese
aggression; these arming actions, in turn, have led some to fear that the Asia-
Pacific is in the midst – or on the brink – of some kind of destabilizing “arms
race” that could undermine regional security and stability. At the same time,
it is also possible to interpret the United States’ so-called “pivot toward
Asia” and its preliminary embrace of the so-called “AirSea Battle”
warfighting concept as two direct responses to rising Chinese military power
– a tit-for-tat ratcheting up of great power confrontation that could also have
serious negative repercussions for regional tensions.

Chinese military modernization and regional counter-arming

The modernization of the Chinese People’s Liberation Army (PLA) and the
subsequent expansion of Chinese military power in the Asia-Pacific region
have been well-documented and need not be repeated here in great detail.
Suffice it to say that, for over a decade, the Chinese have put considerable
resources and effort into acquiring new capabilities for force projection,
mobility and precision strike. In particular, this has meant de-emphasizing
ground forces in favour of building up the PLA’s naval, air and missile
forces. The PLA Navy (PLAN), for example, has greatly increased its
procurement of large-surface combatants and submarines. The PLAN is
currently acquiring 12 Kilo-class submarines and four Sovremennyy-class
destroyers (armed with supersonic SS-N-22 anti-ship cruise missiles) from
Russia, as well as a navalized version of the Russian Su-30 fighter-bomber.
Just as important, there has been a significant expansion in Chinese naval
shipbuilding since the turn of the century. Since 2000, China has begun
construction of several new classes of destroyers, frigates, amphibious
landing craft and diesel-electric and nuclear-powered submarines. As a
crowning achievement, the PLAN in 2011 commissioned its first aircraft
carrier, the ex-Soviet Varyag, acquired unfinished from Ukraine and then
rebuilt and christened the Liaoning.
During this same timeframe, the PLA Air Force (PLAAF) has acquired at
least 700 “fourth-generation-plus” combat aircraft: 300 Su-27 and Su-
30MKK fighters from Russia; 100 J-11s, a locally built, reverse-engineered
version of the Su-27; and 300 J-10s, an indigenously developed fighter jet.
These fighters are being equipped with new standoff air-to-air and air-to-
ground munitions. The PLAAF is also buying additional transport and air-to-
air refuelling aircraft and strengthening its airborne assault forces.2 In
addition, China is purportedly working on two “fifth-generation” combat
aircraft, the J-20 and J-31. While details surrounding both aircraft programs
are sketchy, their existence demonstrates China’s ambitions to enter the
vanguard of advanced fighter-jet producers. Finally, the PLA has greatly
expanded its fleet of tactical missile systems; of particular interest is the DF-
21D anti-ship ballistic missile (ASBM), which has been described as a
“carrier-killer.”3
Finally, the PLA is building up – both quantitatively and qualitatively – its
arsenal of conventional missile systems, including the 600-kilometre-range
CSS-6 and 300-kilometre-range CSS-7 short-range ballistic missiles, and, in
particular, adding a new category of land-attack cruise missile. Additionally,
many of these missile systems are being fitted with satellite-navigation
guidance for improved accuracy, and with new types of warheads (such as
cluster sub-munitions and fuel-air explosives) for higher lethality.4
At the same time, the PLA is increasingly focused on the future military
potential of the information technologies-led revolution in military affairs
(RMA). According to several Western analysts, Beijing is currently engaged
in a determined effort to transform the PLA from a force based on Mao
Zedong’s principles of “People’s War” to one capable of fighting and
winning “Limited Local Wars under High-Tech Conditions,” or, more
recently, “Limited Local Wars under Conditions of ‘Informatization.’ ” This
new doctrine revolves around what some have termed “rapid war, rapid
resolution,” which entails short-duration, high-intensity conflicts
characterized by mobility, speed and long-range attack, employing joint
operations fought simultaneously throughout the entire air, land, sea, space
and electromagnetic battlespace, and relying heavily on extremely lethal
high-technology weapons. The PLA operational doctrine is also increasingly
emphasizing pre-emption, surprise and shock value, given that the earliest
stages of conflict may be crucial to the outcome of a war.5 Consequently, the
PLA is currently engaged – as part of an ambitious “generation-leap”
strategy – in a “double construction” transformational effort of
simultaneously pursuing both the mechanization and informatization of its
armed forces.6 Initially, the PLA is attempting to digitize and upgrade its
current arsenal of conventional “industrial age” weapons, i.e. through
improved communications systems, new sensors and seekers, greater
precision, night-vision capabilities, etc.7
To pay for all this, Beijing has more than quintupled Chinese defense
spending in real terms since the mid 1990s. The official 2013 defense budget
of the People’s Republic of China (PRC) is ¥741 billion, or US$119 billion –
an increase of nearly 11 percent over the previous year, and continuing a 15-
year-long trend of near-double-digit real (i.e. after taking inflation into
account) increases in Chinese military spending. China, in fact, is now the
second largest defense spender in the world, after the U.S. The annual
procurement budget alone has increased from US$3.1 billion to an estimated
US$40 billion between 1997 and 2013 – and this may or may not include
extra-budgetary spending on research and development (R&D) and arms
imports, which could add another few billion dollars to the total.
As a result of such spending and acquisitions, the military potential of the
PRC has expanded considerably over the past decade, and the PLA’s recent
modernization activities have fuelled speculation that China is developing a
new military strategy based on power projection and precision strike.
China’s 2006 defense white paper states that the PLAN “aims at gradual
extension of the strategic depth for offshore defensive operations and
enhancing its capabilities in integrated maritime operations,” while the
PLAAF “aims at speeding up its transition from territorial air defence to
both offensive and defensive operations, and increasing its capabilities in the
areas of air strike, air and missile defence, early warning and reconnaissance,
and strategic projection.”8 Some may interpret these efforts as an indicator
of a more aggressive and expansionist China, or at least a PRC more likely
to assert its role in the Asia-Pacific region and use its growing military might
to back up its national interests and national security goals.9
While such an expanding military capability will mostly likely be used to
attack and defeat Taiwan in the event that Taipei declares independence,
while also deterring or denying U.S. intervention on Taiwan’s behalf, these
capacities can also be applied to other areas where the PRC has strong
strategic interests, particularly Southeast Asia. This region is one of growing
and increasingly diversified significance to Beijing, and China has several
territorial, economic, and political and diplomatic concerns that touch on
Southeast Asia. These include (i) addressing longstanding disputes over
sovereignty issues in the South China Sea, especially the Spratly Islands; (ii)
securing sea lines of communication to the Indian Ocean and the Middle
East; (iii) increasing economic ties with Southeast Asia (particularly trade
and investment); and (iv) legitimizing its own regional security role (and
also limiting U.S. influence) through a process of multilateral forums and
negotiations.10
 Consequently, Chinese military assertiveness has been felt as much in
Southeast Asia as in other parts of the Asia Pacific. The Chinese have
expanded their naval and air presence in the South China Sea and begun to
extend naval patrols beyond, into the Indian Ocean. For example, the PLA
has built a military airstrip on Woody Island in the Paracel Islands in the
South China Sea, and it is reportedly constructing a new nuclear submarine
base on Hainan Island.11 The PLAN is also building naval facilities in
Myanmar and negotiating port access rights with Pakistan. These and other
actions have caused some to speculate that the PRC is attempting to develop
a network of bases and alliances stretching from southern China to the
Middle East, a strategy often termed the “string of pearls.”12
Overall, the PRC’s “creeping assertiveness” or “creeping expansion” in
the East and South China seas and beyond has been cause for considerable
concern among the countries of Northeast and Southeast Asia.13 Regarding
the South China Sea disputes, for example, Beijing’s competing territorial
claims with several Southeast Asian countries over the ownership or control
in the Spratly Islands has led China to be military engaged and active in this
area for many decades, and this has often led to tension, if not outright
clashes. The Spratlys, a chain of coral reefs that barely break the ocean’s
surface, are adjacent both to major sea lanes of communication (SLOCs) and
to potentially lucrative maritime natural resources (fisheries, oil and gas
deposits). Consequently, several countries in addition to the PRC – including
Brunei, Malaysia, the Philippines and Vietnam – have laid claim to various
parts of the Spratlys, and nearly all have attempted to enforce these claims
by establishing garrisons and other structures on the islands. This has on
occasion led to actual conflict, such as when China occupied and began
building on the Philippines-claimed Mischief Reef in the mid-1990s, and
when Chinese and Vietnamese naval vessels clashed in Johnson Reef.14
In addition, as China’s economy continues both to grow and to globalize –
with the PRC emerging as a global hub not only for manufacturing but also
for research and development and for outward direct investments – trade and
energy security have become paramount concerns for Beijing. China is now
the world’s second largest oil importer (after the United States), and 60
percent (expected to rise to 75 percent by 2015) of its crude oil imports come
from the Middle East, much of it passing through the Malacca and Singapore
Straits or the Lombok and Makkasar Straits. In addition, a quarter of the
world’s trade also transits through these waterways. Consequently, Beijing is
extremely concerned about the continuing openness, safety and security of
these vital SLOCs, which could be disrupted or impeded during an
international crisis, by terrorist action or by piracy.15 At the same time, the
PRC is uncomfortable with external powers, such as the United States or
Japan, maintaining a permanent military presence in these straits. While the
PLAN is currently unable to project sufficient and sustainable sea power into
the straits to protect its interests in these waterways, it is certainly a long-
range goal of the Chinese to develop such capabilities, which can set up
these areas as potential zones of conflict.
Much of the rest of Asia has looked upon the expansion and
modernization of the PLA with considerable trepidation, although this has
not typically been explicitly averred. While individuals, nongovernmental
institutions and even businesses16 may complain about an increasingly
aggressive and belligerent China, most countries in the region have been
officially loath to identify China as an unambiguous threat or adversary, or to
overtly link their military acquisitions to any growing Chinese military
challenge. Australia, for example, in its 2013 White Paper stated that it “does
not approach China as an adversary,” and that it “welcomes China’s rise.”17
Similarly, the United States declared in its 2010 Quadrennial Defense
Review that it welcomed “a strong, prosperous, and successful China that
plays a greater global role.”18 Even the governments of Japan, the
Philippines and Vietnam, three countries that have openly clashed with
China over conflicting territorial claims, have refused to label the PRC as
“the enemy.” For example, in its 2012 defense white paper, Japan only made
the following rather tepid observation:

China has been expanding and intensifying its activities in waters close
to Japan. These moves, together with the lack of transparency in its
military and security affairs, are a matter of concern for the region and
the international community including Japan, which should require
prudent analysis.19

Despite their adversarial relations with China, both Manila and Hanoi have
pursued “multiple strategies” with Beijing that stop short of full military
responses. These countries have attempted to use statecraft, particularly with
ASEAN mechanisms, in order to engage China and to lessen their tense
relationships with the PRC.20
Consequently, most recent regional re-arming, if it is being undertaken in
order to counter any growing Chinese military “threat,” must be more
inferred than candidly articulated. Obviously, countries throughout Asia are
visibly disturbed by what they perceive to be an increasing Chinese
aggressiveness in such areas as the East and South China Seas. Without
explicitly referring to China as a “threat,” they are nevertheless reacting in
ways that certainly signal their concern about a China that is both a growing
military power and is increasingly predisposed to using this power (or the
threat of use) to press its national goals and objectives.
Consequently, many regional militaries have attempted to match the
Chinese build-up, in intensity at least, if not in comparable numbers (see
Table 3.1). Consequently, over the past decade the pace of advanced arms
acquisitions has picked up throughout much of the Asia-Pacific. Japan, for
example, is in the process of buying four new destroyers (capable of
shooting down incoming missile threats), a new class of submarines
(outfitted with air-independent propulsion (AIP) for extended submerged
patrolling), and two new helicopter carriers; it is also the first country in Asia
to order the F-35 stealth fighter jet. South Korea is adding three large
indigenous destroyers (and may buy more) to its fleet, as well as three
Dokdo-class amphibious assault ships and up to nine new AIP-equipped
submarines; additionally, Seoul is buying F-15K combat aircraft and
developing its own long-range cruise missiles. Australia is acquiring three
new Aegis-equipped air warfare destroyers and two large amphibious assault
vessels; it will likely also order the F-35 fighter. India is at the moment
acquiring two new aircraft carriers (one ex-Russian, the other through
indigenous construction), as well as six to twelve new submarines, and it
recently signed an order for 126 French-made Rafale combat aircraft.
Southeast Asia has experienced a similar buying spree. Almost every navy
within ASEAN is acquiring new surface combatants, ranging from corvettes
to frigates, while nearly every local air force has bought at least some
modern fighter jets, such as the Russian Su-30, the Swedish Gripen, or the
US F-15 and F-16. More significantly, perhaps, several Southeast Asian
nations are either expanding their submarine fleets or creating such forces
where none previously existed: Singapore has acquired six ex-Swedish navy
submarines; Vietnam is in the process of buying six Kilo-class boats from
Russia; Malaysia has taken delivery of two Franco-Spanish Scorpene-class
submarines; and Indonesia recently announced that it would buy three used
boats from South Korea.

A regional arms race?

Obviously, a considerable amount of arms has flowed into the Asia-Pacific
over the past 15 years, and will continue to do so. This raises the question of
whether China is the primary cause of this regional arming, and, if so, could
this process of tit-for-tat arms acquisition ignite a regional arms race?
Arms races can seriously disturb or even exacerbate regional or bilateral
military balances, leading to more insecurity and instability in the region. In
this regard, the spread of the most advanced conventional weapons could
have an adverse effect on regional security environments where tensions are
already high. Illustrative of this process is the arms race between China and
Taiwan. Beijing’s growing arsenal of modern warships, submarines, fighter
aircraft and precision-guided munitions has certainly increased Taiwan’s
threat perceptions of China, and subsequently it has fuelled Taipei’s counter-
acquisition of new air and missile defenses, anti-submarine and anti-surface
warfare systems, and counter-landing weapons. For example, Taiwan is in
the process of acquiring, through indigenous development, both
intermediate-range ballistic missiles and a land-attack cruise missile (Hsiung
Feng IIE).21 Yet, as these militaries become more capable, the situation
across the Taiwan Straits has not necessarily become less tense – just the
opposite, in fact, as the armed forces on both sides continue to test each
other’s strengths and weaknesses in the straits. Such concerns are only
multiplied when one considers the types of military systems being acquired
– transformational weapons that promise to fundamentally change the
conduct of warfare and which could greatly increase its destructiveness.
Table 3.1 Recent major Asian-Pacific arms acquisitions
Source: Compiled by author.
Notes
AAM: air-to-air missile
AGM: air-to-ground munition
ASCM: antiship cruise missile
DDH: helicopter destroyer
LACM: land-attack cruise missile
LHD: landing helicopter dock
LPD: land platform dock
MD: missile defense
MRL: multiple-rocket launcher
SSM: surface-to-surface missile
STOVL: short takeoff/vertical landing.

The same can be said of the Sino-Japanese tit-for-tat arming relationship.

Without explicitly naming China as an adversary, recent Japanese arms
acquisitions and other military-related activities (“nationalizing” the
Senkaku/Daioyu islands, the planned redeployment of Japanese forces from
the north to its southwestern territories and islands) underscore the fact that
Tokyo is increasingly concerned about Chinese military power, and it is
taking actions to counter these developments. Japan’s new prime minister,
Shinzo Abe, is talking about boosting defense spending for the first time in
over a decade, mostly to increase surveillance and intelligence-gathering
against China in the East China Sea.22 Additionally, over the past decade
Japan has progressively deemphasized its ground forces (traditionally
arrayed to defend against a Soviet invasion in the north) in favor of its air
and especially naval forces; accordingly, the Maritime Self-Defense Force
will over the next decade add six new submarines and several new
destroyers – including a 19,000-ton “flat-top” helicopter destroyer, which
could conceivably be converted to a fixed-wing aircraft carrier – to its
inventories.
At the same time, it is very difficult to conclusively demonstrate that
Chinese arming has been the direct cause of arms acquisitions by other Asian
militaries. However, while China has certainly been a catalyst when it comes
to many Asian military modernization efforts over the past decade, it is
certainly not the sole – or in some cases, even the major – cause behind this
regional re-arming. Asia does not appear to need any additional reasons to
buy arms, and besides the apparent “China threat,” other strategic
motivations abound in the region. Southeast Asian nations, in particular,
have as many geopolitical disputes with each other as they do with China;
these include unresolved territorial squabbles and overlapping claims over
maritime boundaries and exclusive economic zones (EEZs) in the South
China Sea. Korean arms purchases seem to be driven more by a perceived
strategic competition with Japan (as highlighted by the Dokdo/Takashima
sovereignty dispute) than any concerns about a rising China. In addition,
national pride and prestige have also been powerful incentives to acquire
arms, aided by tremendous economic growth (this has been particularly true
in the case of Southeast Asia). Finally, the highly competitive state of the
current global arms market has meant that there are a lot of motivated sellers
on the supply side of the arms business. Nearly every leading arms
manufacturing country has come to depend heavily on overseas sales to bulk
up their business and for many arms producers, weapons exports are a matter
of sheer survival.
At the same time, it should be noted that arms races per se are tricky
things. Many observers are all too quick to describe the current round of
arms buying in the Asia-Pacific as an “arms race,” but they fail to explain
what they mean by an arms race in the first place. Arms races are not self-
explanatory; rather they must conform to a specific set of circumstances.
They are, for the most part, explicit competitions: countries openly designate
each other to be adversaries, and their military expenditures and arms
acquisitions are undertaken specifically in reaction to the actions of their
particular competitors. If we apply such criteria to recent arms acquisitions
in the Asia-Pacific, then very few can be described as an arms race.23
It could be argued, that, as opposed to an arms race, Asian militaries are
simply engaged in the normal, cyclical process of replacing older and worn-
out equipment in their arsenals. Aging weapons systems have to be replaced
as they reach obsolescence or when their usage constitutes a danger to their
operators (e.g. pilots dying in plane crashes, due to equipment failure).
Furthermore, if this recapitalization seems “bunched up” enough to have the
appearance of an arms race, then it is only because these countries are finally
getting around to arms acquisitions they have put off for many years. And
considering that most of these countries are hardly replacing their older
equipment on a one-for-one basis, one could even admire their restraint in
arms purchases.
Nevertheless, the kind of tit-for-tat arms acquisitions we are seeing in
Asia are still worrisome and potentially destabilizing. In particular, they may
contribute to a classic “security dilemma” – a situation whereby such
arming, ostensibly undertaken to maintain regional stability, could actually
undermine that very security due to misperception and over-reaction. In the
long run, therefore, it may not matter much to the Asia-Pacific whether the
current arms buildup is a classic arms race or not.
In particular, the Asia-Pacific is engaged in something far beyond the
mere modernization of its regional armed forces. Militaries in the region
have added capabilities over the past decade that they did not possess earlier,
including stand-off precision-strike, long-range airborne and undersea
attack, stealth, mobility and expeditionary warfare, and greatly improved
command, control, communications, computing, intelligence, surveillance
and reconnaissance (C4ISR) networks. Fourth generation-plus fighter
aircraft, modern main battle tanks, cruise missiles, multiple rocket launchers
and stand-off precision-guided weapons, as well as active radar-guided air-
to-air missiles, have greatly increased combat firepower and effectiveness.
Submarines (some outfitted with AIP) and modern surface combatants,
amphibious assault ships, air-refueled combat aircraft and transport aircraft
have extended the theoretical range of action of armed forces in the region.
Surveillance aircraft, satellites and unmanned aerial vehicles have
considerably expanded their capacity to “look out” over the horizon and in
all three dimensions.
Overall, therefore, Asian militaries are acquiring greater lethality and
accuracy at greater ranges, improved battlefield knowledge and command
and control, and increased operational maneuverability and speed. These
expanded capabilities, in turn, promise to significantly alter and upgrade the
manner of war fighting in the region. Above all, conflict in the region,
should it occur, is likely going to be more high-tech – that is, faster, more
long-distance and yet more precise, and perhaps more devastating in its
effect.
Finally, few regional militaries can seriously compete with China, either
in terms of quantity but also, increasingly, in terms of quality. Not only has
the PLA been able to acquire advanced military systems – such as air-
defense destroyers, modern diesel-electric and nuclear-powered attack
submarines, fourth-generation fighter aircraft, tactical ballistic missiles, and
even an aircraft carrier – it has done so in numbers that far outstrip any of its
rivals (more than 400 fourth-generation fighters, 20-plus attack submarines,
dozens of new fast missile boats, etc.). Ultimately, China can bring much
more firepower to bear in such areas as the South China Sea than any of its
rivals, individually or (although highly doubtful) cooperatively, even.

The U.S. response: the pivot toward Asia and AirSea Battle24
At the beginning of 2012, the administration of U.S. President Barack
Obama formally promulgated its new “pivot” to the Asia-Pacific region.
Many hailed this move, later rechristened a “rebalancing,” as a significant,
even consequential, realignment of U.S. global power. After a decade-long
preoccupation with fighting ground-based counter-insurgency wars in the
Middle East, the U.S. military now plans to emphasize air-and sea-based
operations in an “arc extending from the Western Pacific and East Asia into
the Indian Ocean region and South Asia.”25
In particular, this rebalancing involves the redeployment of U.S. forces
from other parts of the world. The U.S. Navy (USN) plans to position 60
percent of its fleet in the Pacific Ocean compared to a current 50:50 split
between the Pacific and Atlantic. In addition, 2,500 U.S. Marines are to be
based in Darwin, Australia, while Singapore has agreed to “host” up to four
of the new USN Littoral Combat Ships. Finally, the U.S. is seeking to
expand its access to ports and other facilities in the Philippines and Vietnam.
Of course, much of this supposed rebalancing is just old wine in new
bottles. The U.S. never really decoupled that much from the Asia-Pacific –
the region was simply eclipsed by the overriding campaigns in Iraq and
Afghanistan and by the global war on terror. Already, six of the USN’s 11
aircraft carriers are based in the Pacific, as well as 31 of its 53 nuclear-
powered attack submarines. And there are more than 60,000 U.S. military
personnel based just in the Western Pacific, along with 42,500 uniformed
service members in Hawaii and 13,600 more afloat.
Yet, this rebalancing is significant because it symbolizes Washington’s
renewed focus on China and its growing concern over the growth of Chinese
military power in the Asia-Pacific. The strategic pivot is not merely a
diplomatic re-engagement with Asia – it is a decidedly military effort by the
U.S. to counterbalance Beijing’s growing strength and influence in the
region. In addition, this pivot must be viewed through the lens of the
Pentagon’s nascent AirSea Battle (ASB) concept, an ambitious war-fighting
model that anticipates massive counterstrikes against an enemy’s home
territory, incapacitating the adversary by taking out its military surveillance
and communications systems, while also targeting the enemy’s missile
bases, airfields, and naval facilities. In the Asia-Pacific, that perceived
adversary is, increasingly, China.
In September 2009, the U.S. Navy and Air Force signed a classified memo
to initiate an inter-service effort to develop a new joint operational concept,
dubbed AirSea Battle. Emulating intellectual transitions in military doctrine
along the lines of the AirLand Battle (ALB) warfighting concept developed
in the early 1980s to counter advances in Soviet operational art, ASB has
been designed, at the strategic level, to preserve stability and to sustain U.S.
power projection and freedom of action, and, at the operational level, to
offset current and anticipated asymmetric threats through a novel integration
of U.S. Air Force and Navy’s concepts, assets, and capabilities.
Central to the ASB concept is overcoming the purportedly emerging “anti-
access/area denial challenge” that challenges the operational freedom of U.S.
military forces. Advocates of ASB frequently emphasize the growing
abilities of potential adversaries (China, Iran, North Korea) to deny U.S.
forces the ability to enter or operate in maritime territories adjacent to these
countries. A2/AD is seen as especially crucial in deterring or countering
third-party interventions – for example, efforts on the part of the U.S.
military to come to the aid of Taiwan in the case of a cross-Strait crisis, or
Saudi Arabia and neighboring states in the case of attacks on shipping in the
Persian Gulf.26 According to the Center for Strategic and Budgetary Affairs
(CSBA), “anti-access (A2) strategies aim to prevent U.S. forces from
operating from fixed land bases in a theater of operations,” while “area-
denial (AD) operations aim to prevent the freedom of action of maritime
forces operating in the theater.”27 CSBA defines the “A2/AD” threat as
strikes by ballistic and cruise missiles (both land-attack and anti-ship),
artillery and rocket barrages, submarine operations and long-range air
strikes. Cyber-attacks, anti-satellite warfare, and even coastal mines are also
usually characteristic of A2/AD.
To counter a hypothetical crisis scenario or conflict in which an adversary
employs an A2/AD strategy, ASB in turn envisions a pre-emptive, stand-off,
precision-strike – or “Networked, Integrated Attack-in-Depth” – initiated
and carried out by U.S. forces alone, in three distinct phases: (1) by striking
the enemy’s intelligence, surveillance and reconnaissance (ISR) assets from
afar through a “blinding campaign” in order to deny their situational
awareness; by reducing the adversary’s ability to “see deep,” U.S. aircraft
carrier groups would thereby gain access to the battlespace; (2) by carrying
out a “missile suppression campaign” to disrupt the enemy’s air-defense
networks, using stealthy long-range platforms, and supported by submarine-
launched weapons and sensors; through this destruction or degradation of the
enemy’s critical air-defense assets and the consequent achievement of air
superiority, U.S. forces would be able to attack the adversary’s land-based
missile launchers, surface-to-surface missiles and their supporting
infrastructure; (3) by conducting diverse follow-on operations, such as
“distant blockades,” in order to seize the operational initiative and to ensure
protracted U.S. freedom of action in the region.
While details surrounding ASB are sketchy, AirSea Battle has significant
repercussions for security in the Asia-Pacific, because it is an essential
component of Washington’s response to the growth of Chinese military
power. This is because China, above all other potential adversaries, is
regarded as the most critical potential employer of an A2/AD strategy, and
therefore the main object of an ASB-based response. The People’s Liberation
Army’s (PLA) strategic priorities have shifted since the Taiwan Strait crisis
of 1996 toward adopting a diverse portfolio of A2/AD capabilities for air,
sea and land operations designed to deter, delay and prevent external (i.e.
U.S.) entry into specific areas deemed vital to China’s “core interests.” To
this end, the PLA has been gradually upgrading its existing weapons systems
and platforms, while experimenting with the next generation of design
concepts. This can be seen in the comprehensive modernization of China’s
nuclear and conventional ballistic missiles; integrated air-, missile-and early-
warning defense systems; electronic and cyber-warfare capabilities;
submarines; surface combat vessels; and the introduction of the fourth and
fifth generations of multi-role combat aircraft.
Alongside the qualitative shifts in “hardware,” the PLA has also been
revamping its “software,” including its military doctrine, organizational
force structure and operational concepts, which are now conceptualized in
the context of “Local Wars under Conditions of Informationization.” In
particular, China’s military doctrine envisions future conflicts as being short
in duration, limited to its coastal periphery or “near seas” (the Yellow, East
and South China Seas), and involving integrated or joint military operations
across the air, sea, land, space and cyberspace domains. The shifting
character of the future battlefield in turn alters the PLA’s operational
requirements and compels the Chinese military to adopt innovative concepts
and capabilities that would constrain the strategic advantage and freedom of
action of the U.S. in the region. These include A2/AD-oriented “attack and
defense” concepts that aim to offset the military effectiveness of U.S.
forward-deployed bases, mobile forces and their supporting infrastructure.
In a range of conventional potential crisis scenarios on the Korean
Peninsula, for example, China could take measures to disrupt the build-up of
U.S. combat power in terms of size, location and timeframes. Specifically,
the PLA could delineate clear air, sea and land buffer zones (conflict limit
lines) beyond which U.S.-South Korean forces could not operate. In such a
case, the U.S. would need to construct alternative points of entry for its
reinforcements, which could effectively delay its initial and follow-on
responses. Similarly, in a scenario involving a Chinese attack on Taiwan, the
use of anti-ship cruise and ballistic missiles would impede the use of aircraft
carriers around the island. Finally, depending on the modalities of China’s
A2/AD strategies, the U.S. could potentially have to adjust the scope of its
involvement in the region, limiting its operational conduct and freedom of
action, particularly with regard to its naval deployments in the South China
Sea.
Interestingly, while ASB appears to be inherently designed to limit
China’s emerging A2/AD systems and capabilities, its proponents go out of
their way to deny that ASB specifically targets China. CSBA, for example,
has explicitly stated in a 2010 briefing that “ASB is NOT about war with
China or containment of China” but rather “part of a larger ‘offsetting
strategy’ aimed at preserving a stable military balance and maintaining crisis
stability in East Asia.” Nevertheless, the briefing also describes the PLA’s
acquisition of A2/AD capabilities as the “most stressful case” for an ASB
strategy. It then goes on to describe, in excruciating detail, how ASB would
be employed to fight a war against China, including attacks on the Chinese
mainland.28
Regional responses to AirSea Battle
The political and military establishment in the U.S. emphasizes the growing
importance and complexity of East Asia’s security challenges, including the
strategic and operational consequences of China’s ongoing military
modernization. U.S. allies in East Asia, however, have not fully embraced
the ASB concept or the rationale behind it. Indeed, South Korea, Japan,
Australia and other U.S. partners in the region have been relatively quiet on
the implications of ASB, largely because they do not possess the full extent
of the planned operational details, which remain classified. Such hesitance is
also attributable to concerns, from the allied perspective, over the extent to
which ASB provides strategic reassurance as opposed to representing
abandonment by the U.S. Indeed, the U.S. DoD has not clarified the link
between the ASB concept and its “rebalancing strategy” in the Asia-Pacific
region, nor what particular aspects of ASB will be relevant for future allied
interoperability requirements and involvement. Moreover, at the operational
level, U.S. allies question whether implementing ASB would actually
mitigate military effectiveness and the defense of proximate U.S. allied
bases in the region.
At this point, no U.S. ally or potential military partner in Northeast or
Southeast Asia is anywhere near equipped at this point to make much of a
contribution to U.S. AirSea Battle operations. Japan is probably the most
concerned about a rising Chinese military threat, as reflected in its 2011
National Defense Program Guidelines and its embrace of a “dynamic
defense force.” This “dynamic defense” emphasizes high-mobility, an
expeditionary capacity (to specifically defend off-shore islands), jointness
(within the entire Japan Self Defense Forces (JSDF )) and interoperability
with U.S. forces.29 At the same time, the JSDF remains overwhelmingly a
defensively oriented military; its major potential contributions to ASB are in
providing secure forward basing to U.S. forces, missile defense, and a small
but growing capacity for power projection (e.g. new helicopter carriers, an
expanding submarine force, additional sea-and airlift). According to
Benjamin Schreer: “Japan’s defense planning has thus started to shift toward
complementarity in a possible ‘Allied AirSea Battle’ concept. Militarily, it’s
increasingly well placed to ‘plug and play’ in a future Sino-US conflict.”30
On the other hand, Japan remains militarily and strategically hamstrung by
an extremely tight defense budget that limits the acquisition of ASB-
supporting equipment or infrastructure, and a continuing pacifist streak that
runs through the general populace; its ability to make a substantial
contribution to ASB operations is still limited, therefore.
For their part, most other countries in the region are even less prepared,
either militarily or politically (or both) to support ASB. Most Southeast
Asian militaries, for instance, possess little in the way of area denial
capabilities – especially sea denial – when it comes to countering China.
Even more importantly, it is highly unlikely that Southeast Asia countries –
even Singapore, a close partner with the U.S. military which possesses the
resources to play a “supporting role in an AirSea Battle concept” – are
prepared to commit themselves to “an operational concept that could see
[them] involved in a major war with China.”31 Embracing ASB would also
place them too explicitly in the U.S. camp, violating most of these countries’
nonalignment strategies and/or balanced approaches toward both U.S. and
Chinese relations; this would also likely undermine their priorities to engage
Beijing via statecraft and diplomacy in order to extract peaceable
concessions from China.
In this context, U.S. allies and partners in the region may even question
whether and to what extent ASB foresees active multinational participation
in the envisioned “deep-strike missions” targeting China’s military
infrastructure on the mainland. This operational uncertainty in turn translates
into broader strategic uncertainty, in which future alliance credibility may be
compromised. Consequently, if ASB indeed comes to shape U.S. operational
conduct, U.S. allies and partners in the region may feel the need to devise
alternative defense strategies, and rethink the pace, direction and character of
their military modernization, including their resource allocation and
weapons acquisition priorities.

Conclusion
China’s emergence as an economic, geopolitical, and perhaps even cultural
great power is inevitable. Its military rise is probably equally inexorable.
Beijing has, for at least a decade and a half, invested considerable resources,
in terms of both money and human capital, into building up its armed forces
– and it is paying off. The PLA is a much more capable force, relative to its
neighbors, than it was 20 years ago. This modernized and revitalized
military force is being matched by (or perhaps this modernization process
has even enabled) a new assertiveness, obstinacy and obduracy in
international affairs. When coupled with the country’s long-standing – and
perhaps even growing – sense of “victimhood” and the need to “reclaim lost
status,”32 the result is a more militarily capable China that may be much less
inclined to negotiation and compromise, and instead may be more prone to
use force or the threat of force to achieve its goals.
This heady brew of a more militarily competent and more intransigent
China is an obvious goad for countries in the region to arm and balance
against Beijing. Recapitalizing and improving their armed forces is a
sensible hedge against the prospect of growing Chinese military power. So,
too, is it sensible for countries in the region to keep the United States
engaged militarily in the Asia-Pacific, by offering new forward operating
opportunities (e.g. Singapore’s hosting of USN Littoral Combat Ships) and
new bases (e.g. Australia’s agreement to having U.S. Marines in Darwin).
Similar arguments might be used to justify the United States’ “pivot” back
toward Asia and even its preliminary experimentation with AirSea Battle
concepts. And certainly one might infer from such actions that they have
been the direct result of increasing uncertainties about Chinese international
behavior and the relative “benign-ness” of Beijing’s intentions, especially in
light of growing Chinese military power.
Interestingly, however, there has been little by the way of overt or explicit
references to growing Chinese military power on the part of governments
when it has come to explaining regional military re-arming or even for
rationalizing the U.S. rebalancing and ASB. Most countries in the Asia-
Pacific are still loath to officially refer to China as an outright threat and
therefore the catalyst behind their military modernization activities,
preferring instead oblique allusions to “matters of concern” or “legitimate
questions about [China’s] future conduct and intentions.”33 In addition,
engagement with China, rather than containment, is almost always stressed.
Consequently, it is difficult to establish categorically that such actions as the
arms buildup in Southeast Asia over the past decade or so, or Japan’s
acquisition of large helicopter carriers, or U.S. AirSea Battle are direct
responses to China’s growing status as a regional military great power.
Nevertheless, inferences can and should be made. Perhaps some of the
above military activities would have occurred even if China were not a rising
military force to be reckoned with; certainly, there exist other factors that
have driven regional arming.34 But at the time it is irrefutable that China’s
bad behavior when it has come to sovereignty claims in the East and South
China Sea, or Beijing’s refusal to rule out the use of force to secure the
reunification of Taiwan, or simply the continuing opacity surrounding
Chinese defense spending and arms acquisitions has had a chilling effect on
regional security. Such actions, coupled with an increasingly strident
Chinese national narrative that is more and more nationalistic and steeped in
victimhood and intransigence, are more than sufficient to give nations
around the Asia-Pacific considerable cause to doubt China’s peaceful and
harmonious intentions. Even in the absence of explicit referencing, the direct
causality between Chinese behavior and such reactions as regional re-
arming, the U.S. pivot toward Asia, and AirSea Battle is readily apparent.

Notes
1 “Ambassador: China has indisputable sovereignty over S. China Sea islands,” Xinhua, January
23, 2013.
2 Dennis J. Blasko, The Chinese Army Today: Tradition and Transformation for the 21st Century.
London: Routledge, 2006, pp. 69–70, 160–162.
3 Tony Capaccio, “China has ‘workable’ anti-ship missile design, Pentagon says,” Bloomberg,
August 26, 2011, www.bloomberg.com/news/2011-;08-;25/china-has-workable-anti-ship-missile-
design-pentagon-says.html.
4 Timothy Hu, “Country briefing—China: Ready, steady, go . . . ,” in Jane’s Defence Weekly, April
13, 2005.
5 U.S. Department of Defence (DoD), Annual Report to Congress: Military Power of the People’s
Republic of China 2006; Jason E. Bruzdzinski, Briefing: China’s Military Transformation for the
New Era. Washington, D.C.: MITRE Corp., 2005; Garret Albert, Michael Chase, Kevin Pollpeter
and Eric Valko, “China’s preliminary assessment of Operation Iraqi Freedom,” in RUSI Chinese
Military Update, July 2003; Nan Li., “Chinese Views of the U.S. War in Iraq: War-fighting
Lessons” in RUSI Chinese Military Update, July 2003.
6 You Ji, “China’s emerging National Defence Strategy,” in China Brief, November 24, 2004.
7 DoD, Office of the Secretary of Defense, Annual Report to Congress: Military Power of the
People’s Republic of China 2006. Washington, D.C.: Office of the Secretary of Defense, 2006,
pp. 35–36; You Ji, “Learning and catching up: China’s Revolution in Military Affairs initiative,”
in Emily O. Goldman and Thomas G. Mahnken (eds), The Information Revolution in Military
Affairs in Asia. New York: Palgrave MacMillan, 2004, pp. 97–123.
8 China’s National Defense in 2006, released December 29, 2006,
www.chinadaily.com.cn/china/2006-;12/29/content_771191.htm.
9 Christopher Griffin and Dan Blumenthal, “China’s Defence White Paper: What it does (and
doesn’t) tell us,” in China Brief, January 24, 2007.
10 “China, America, and Southeast Asia: Hedge and tack,” in Strategic Comments. London:
International Institute for Strategic Studies, February 2005, p. 1.
11 Office of Naval Intelligence, China’s Navy 2007. Washington, D.C.: Office of Naval Intelligence,
2007, pp. 31–32.
12 Bill Gertz, “China builds up strategic sea lanes,” in Washington Times, January 18, 2005.
13 See Benjamin Schreer, Planning the Unthinkable War: AirSea Battle and its Implications for
Australia. Canberra: Australian Strategic Policy Institute, 2013, pp. 22–30.
14 Ian Storey, “China and the Philippines: Moving beyond the South China Sea dispute,” in China
Brief, August 16, 2006.
15 Ian Storey, “China’s ‘Malacca Dilemma’,” in China Brief, April 12, 2006.
16 After Chinese vessels cut a seismic cable laid by a Vietnamese survey ship in 2012, PetroVietnam
labeled it “a blatant violation of Vietnamese waters.” Jon Rosamond, “Surface tension: Rivals
jostle in South China Sea,” Jane’s Navy International, May 2013, p. 32.
17 2013 Defence White Paper. Canberra: Department of Defence, 2013, p. 11.
18 U.S. Department of Defense, Office of the Secretary of Defense, Quadrennial Defense Review
Report. Washington, D.C.: Office of the Secretary of Defense, February 2010, p, 60.
19 Defense of Japan 2012. Tokyo: Ministry of Defense, 2012, p. 3.
20 See Ian Storey, “Manila ups the ante in the South China Sea,” in China Brief, February 1, 2013;
Ian Storey, “ASEAN and the South China Sea: Movement in lieu of progress,” in China Brief,
April 26, 2012; Ian Storey, “China’s missteps in Southeast Asia: Less charm, more offensive,” in
China Brief, December 17, 2010.
21 Wendell Minnick, “Ex-Minister: Taiwan launched missile,” Defense News, May 23, 2011.
22 Kirk Spitzer, “Japan boosts defense spending, more or less,” Time, January 31, 2013.
23 For a longer discussion of this point about arms races, see Richard A. Bitzinger, “A new arms
race? Explaining recent Southeast Asian military acquisitions,” Contemporary Southeast Asia,
April 2010. See also Colin Gray, “The arms race phenomenon,” World Politics 24, no. 1 (1971),
and Grant Hammond, Plowshares into Swords: Arms Races in International Politics. Columbus:
University of South Carolina Press, 1993.
24 This section draws heavily upon Richard A. Bitzinger and Michael Raska, The AirSea Battle
Debate and the Future of Conflict in East Asia, RSIS Policy Brief. Singapore: S. Rajaratnam
School of International Studies, 2013.
25 Sustaining U.S. Global Leadership: Priorities for the 21st Century, U.S. Department of Defense,
January 2012, p. 2.
26 Office of the Secretary of Defense (OSD), 2011 Report to Congress: Military and Security
Developments Involving the People’s Republic of China. Washington, D.C.: U.S. Department of
Defense, August 2011, p. 2.
27 See Andrew F. Krepinevich, Why AirSea Battle? Washington, D.C.: Center for Strategic and
Budgetary Assessments, 2010.
28 Jan Van Tol et al., AirSea Battle (powerpoint briefing). Washington, D.C.: Center for Strategic
and Budgetary Assessments, May 18, 2010.
29 National Defense Program Guidelines for FY2011 and Beyond. Tokyo: Ministry of Defense,
December 17, 2010, www.mod.go.jp/e/d_act/d_policy/pdf/guidelinesFY2011.pdf.
30 Schreer, Planning the Unthinkable War, p. 25.
31 Schreer, Planning the Unthinkable War, p. 29.
32 Evan S. Medeiros, China’s International Behavior: Activism, Opportunism, and Diversification.
Santa Monica, CA: RAND, 2009, pp. 10–11.
33 U.S. Department of Defense, Quadrennial Defense Review Report 2010, p. 60.
34 See Richard Bitzinger, The China Syndrome: Chinese Military Modernization and the Rearming
of Southeast Asia, RSIS Working Paper No. 126. Singapore: S. Rajaratnam School of
International Studies, May 2007, pp. 22–28.
Part II
China’s power and US strategic
rebalance
Chinese and American perspectives
4 China’s assessments of U.S.
rebalancing/pivot to Asia
Wang Dong and Yin Chengzhi

During U.S. President Barack Obama’s first term, the U.S. government had
initiated a shift in U.S. strategy toward East Asia. The new strategy, which
was first dubbed as “returning to Asia,” later labeled “pivot,” and then
“rebalancing” to the Asia Pacific, became one of Obama’s most definitive
foreign policy initiatives that has re-shaped and is still rewriting not only
the dynamics of U.S.– China relations, but also the regional strategic
landscape.
Underlying the U.S. pivot/rebalancing strategy is, in the words of former
assistant secretary of state Kurt M. Campbell, one of the main architects of
U.S. pivot to Asia, the conviction of U.S. policy makers that “the center of
strategic gravity” is being “realigned and shifting toward Asia,” and that
“U.S. strategy and priorities need to be adjusted accordingly.”1 The U.S.
pivot/rebalancing strategy was designed to address the challenges and
opportunities brought by the rapid rise of China, reassure U.S. allies and
partners throughout the region, and, above all, “sustain American leadership
in Asia.”2
As the U.S. implements its “rebalancing strategy to Asia” strategy, China
heatedly debates the nature and implications of the American strategy.3
How do Chinese strategic analysts assess U.S. pivot/rebalancing to Asia?
What are the policy prescriptions strategic and policy circles provide to the
Chinese leadership? To what extent are Chinese reactions to U.S.
pivot/rebalancing indicative of the Chinese perceptions of its rising power
in the wake of the global financial crisis? The Chinese perspective will be
crucial for our better understanding of the implications of U.S.
pivot/rebalancing as well as for making more informed analysis of and
prediction about the ongoing reconfiguration of the strategic landscape in
the Asia Pacific. In this chapter, we will try to outline the scholarly and
policy debates in China regarding U.S. pivot/rebalancing strategy. We will
show that whereas Chinese policy makers largely remain sober-minded and
stress the importance of cooperative, non-adversarial relations with the
United States, U.S. pivot/rebalancing strategy has nevertheless increased
the sentiment of insecurity and sense of being threatened among Chinese
elites and the public. As a result, U.S. pivot/rebalancing has ironically
contributed to the emerging security dilemma between China and the
United States.

U.S.’s “return to Asia” and China’s initial reactions

On July 21, 2009, U.S. Secretary of State Hillary Rodham Clinton, upon
arriving in Bangkok to attend the Association of Southeast Asian Nations
(ASEAN) Summit, declared that “the United States is back.”4 In the next a
few days, Clinton repeated the message that the United States was “back to
Southeast Asia,” both at the Summit and on the sidelines.5 When asked
about the main differences between George W. Bush’s and Barack Obama’s
policies in Asia, Clinton stated that the Obama administration “will
demonstrate that America is back.”6 Four months later, when taking his first
trip to Asia after inauguration, President Obama declared that “as America’s
first Pacific president,” he would promise that the United States, as a
“Pacific nation,” would “strengthen and sustain our leadership in this vitally
important part of the world.”7
The U.S. message of “returning to Asia” had instantly generated concerns
among Chinese strategic analysts. Within a few days of Clinton declaring
the U.S.’s “back to Asia,” Global Times, an influential international affairs
newspaper in China, published on July 22 an op-ed piece that called for
vigilance against America’s “returning to Asia.” The commentary, authored
by Dai Qingcheng, an active journalist and commentator, interpreted Hillary
Clinton’s statement as an indication of an “important adjustment of the new
U.S. administration’s diplomatic strategy” and “a declaration that the
United States is prepared to compete with China for influence in East Asia.”
To make up for the relative decline of U.S. influence in Asia during the
Bush years, the Obama administration’s top priority was to “return to Asia
as soon as possible, repair the damaged U.S. state image, and restore the
U.S. leadership in the East Asian region.” Such an important adjustment in
“U.S. global strategy” was also a “Dai believed that the United States
would put up pressures of “encirclement and blockage” (weidu) through
enhancing alliance relations with Japan and South Korea, and that it would
try to “consume” (xiaohao) China’s power through “manipulating”
Southeast Asian countries to engage in territorial disputes with China.8
Dai’s analysis was among the first reactions to U.S. “returning to Asia”
from Chinese analysts. For Chinese analysts, who tend to observe U.S.–
China relations from the perspectives of hardcore realism and traditional
geopolitics, the high-profile “returning to Asia” of the U.S. is a
manifestation of the logic of classical power politics; that is, the United
States is bent on maintaining its hegemony in East Asia. These analysts tend
to interpret the Obama administration’s newly announced “returning to
Asia” policy through the lens of a zero-sum game, and their classic realist
reading of the American policy is also reflected in their policy prescriptions.
However, several days after Dai’s piece appeared, Shen Dingli, a
prominent international relations scholar and director of the Center for
American Studies at Fudan University, published another commentary in
Global Times that disputed Dai’s article head-on. Expressing a dose of
optimism, Shen disagreed with Dai that America’s “returning to Asia” was
aimed at “containing China.” Rather, Shen argued, China should
“welcome” the U.S. returning to Asia as long as it “behaves well” (shou
guiju). Even if the United States was “bent on restraining China” and
“balancing China’s growing influence in the region,” Shen suggested that
China should not be overly worried since as long as China “seeks to
develop peacefully,” China would be welcomed by ASEAN countries and
any U.S. attempt to “restrain” (qianzhi) China would fall flat.9
Immediately after the Obama administration announced America’s return
to Asia, there were both pessimistic and optimistic views within China’s
strategic community. Generally speaking, however, there was relatively less
attention paid to the subject of U.S. returning to Asia in 2009. Part of the
reason might be because when Obama first came to power, the U.S.
president took a number of initiatives to engage China and improve U.S.–
China relations. In April, the Obama administration announced the
establishment of the “Strategic and Economic Dialogue” (S&ED) between
China and the United States. In July 2009, the first S&ED was held in
Washington, D.C. In October 2009, U.S. President Obama took his first
state visit to China. It was not until the Beijing/Washington spat at the
Copenhagen summit on climate change in December 2009, U.S. arms sales
to Taiwan, Obama’s meeting with the Dalai Lama, the Google incident, and
the U.S. military exercises in the Yellow Sea, etc., that concerns about the
U.S. returning to Asia began to increase rapidly. This trend can be discerned
from the academic and public discourses in China. For instance, the number
of academic articles and newspaper stories that focus on the subject of
“U.S. returning to Asia” more than quadrupled between 2009 and 2010,
from 41 to 182; and the number more than doubled in 2011 to 459 (see
Table 4.1).
To some extent, China’s assessments of U.S. pivot/rebalancing to Asia
are also indicative of the Chinese perception of China’s rising power since
the 2008 global financial crisis. China’s stable economic growth despite the
global downturn, partly driven by the Chinese government’s massive
stimulus packages, apparently boosted the self-confidence of the Chinese
public and elites. According to a 2008 annual survey of the Chinese public’s
views of the world, conducted by Global Times, 55.8 percent of the
surveyed Chinese public believed that China’s economic strength had met
the conditions for becoming a “global major power” (shijiexing
qiangguo).10 The Chinese public’s optimism in China’s development was
also manifested in a 2010 poll conducted by a leading Chinese polling
company, Horizon, which showed that 51 percent of the surveyed Chinese
public believed that China would become a major global leading power in
the next decade.11 However, it is worth noting that the Chinese public’s
optimistic assessments of China’s comprehensive power have been
tempered with caution. For instance, the 2008 Global Times survey also
finds that only 26.8 percent of the Chinese public believed that China had
already become a global major power, whereas 20.1 percent were of the
opposite view and 43.7 percent believed that China had not yet become a
full-fledged global major power.12 The percentage of the Chinese public
who believed that China had become a global major power continued to
drop in the next few years. In fact, by 2011, the percentage of the Chinese
public who believed that China had become a global major power had
dropped to 14.1 percent, whereas the percentage of the Chinese public who
believed the opposite had risen to 33.4 percent.13 Moreover, between 2009
and 2011, the percentage of the Chinese public who believed the West
displayed “ostensible behavior of containment against China” had risen 14
percent, from 31.3 percent to 45.3 percent.14

Table 4.1 Academic and policy discourses in China regarding U.S. “returning/pivot/rebalancing”
to Asia, 2009–2012
2009 2010 2011 2012
Returning to Asia 41 182 459 84
Pivot to Asia 0 0 4 29
Strategic 0 0 0 111
rebalancing to
Asia
Source: Data collected from China Academic Journal Network Publishing Database, the largest
database of Chinese academic journals in the world: http://acad.cnki.net/Kns55/brief/result.aspx?
dbPrefix=CJFQ.
Note
Numbers calculated by counting articles with “returning to Asia,” “pivot to Asia,” or “strategic
rebalancing to Asia” as the key word.

It is clear that the Chinese public’s confidence in the growth of Chinese

power, after a spike in the wake of the global financial crisis, had decreased
over time. A similar moderate optimism on the part of the public and elites
was also manifested in the Chinese assessments of U.S. pivot/rebalancing to
Asia. Meanwhile, a more assertive U.S. posture in “returning to Asia,”
including U.S. inserting itself into the maritime disputes in the South China
Sea, increased Chinese public’s and elites’ perceptions of being threatened
by the United States.
U.S.–China “strategic collision” in 2010 and U.S. bolstering of
“returning to Asia”
In 2010, the United States undertook initiatives to further strengthen the
alliance relations and to bolster military cooperation with partners in the
Asia Pacific. Concomitantly, Washington also actively participated in
multilateral forums in the region.
Compared to 2009, Chinese analysts’ understanding of U.S. “returning to
Asia” became more nuanced. On the one hand, Chinese strategic analysts
came to acknowledge that the Obama administration’s rhetorical declaration
of “returning to Asia” does not mean a literal U.S. come-back to Asia.
Rather, it implies a U.S. strategic adjustment resulting from a perceived
shift of strategic gravity from the Middle East to the Asia Pacific region.
Interestingly, the discourse among U.S. strategic circles that “the United
States has never left Asia” was soon accepted by scholars and policy
analysts in China.15
On the other hand, some Chinese analysts also came to realize that one of
the main factors behind the shift in U.S. strategy was the rise of China, and
yet the shift was not completely “targeting against” (zhendui) China. For
instance, Yuan Zheng, a senior research fellow at the Institute for American
Studies, Chinese Academy of Social Sciences, argued that the Obama
administration’s strategic re-adjustment was a result of America’s “strategic
retrenchment” against the backdrop of economic recessions and strategic
blunders in the Middle East. Along with U.S. senior officials’ rhetoric of
“returning to Asia,” the Obama administration would “allocate more
resources to the Asia Pacific region,” improve U.S. military presence in the
Western Pacific, and strengthen relations with allies and partners in the
region. Nevertheless, Yuan held that the U.S. goals of returning to Asia
were two-fold: on the one hand, the strategic re-adjustment was aimed at
dealing with the challenges brought about by not only the rise of China, but
also potentially destabilizing regional issues such as the North Korea
nuclear challenge, as well as territorial disputes in the East China Sea and
the South China Sea; on the other hand, there was economic rationale for
pursuing a “returning to Asia.” Seeing the Asia Pacific region as the “most
dynamic region in the world,” the Obama administration believed that the
recovery of the U.S. economy, particularly the expansion of U.S. exports,
lies in the Asia Pacific countries.16

U.S. arms sales to Taiwan

On January 30, 2010, the Obama administration announced the sale of arms
of US$6.4 billion in total to Taiwan, including “Patriot-3” missile defense
packages, Black Hawk helicopters, and Osprey class minesweepers. The
Obama administration’s arms sales to Taiwan drew strong reactions from
China. The Chinese government, including both the Ministry of Foreign
Affairs (MFA) and the Ministry of Defense lodged strong protests against
the U.S. decision. Some outspoken Chinese senior military officers,
including major generals Luo Yuan of the Academy of Military Science and
Zhu Chenghu of the National Defense University, argued that the arms sale
decision was a hostile policy aiming at “disturbing” and “containing”
China’s rise.17 Seeing the U.S. move as damaging Chinese “core interests”
(hexin liyi), many Chinese analysts called for “strategic combination blow”
(zhanlue zuhe quan) as countermeasures, including imposing sanctions
against U.S. companies involved in the arms sales and taking a “non-
cooperation” approach to regional and global challenges.18

Chinese interpretation of U.S. military exercises

The sinking of the South Korean corvette Choenan on March 26, 2010
triggered tensions in Northeast Asia. In dealing with the perceived threat
from North Korea, the United States, along with South Korea and Japan,
staged a number of joint military exercises in the region. Unfortunately,
however, those exercises increased China’s sense of insecurity. In
responding to the U.S. announcement to stage a joint U.S.–South Korean
military exercise in July 2010 in the Yellow Sea, the Chinese MFA
expressed China’s “resolute opposition” and called the move “detrimental
to China’s security interests.”19 Chinese strategic analysts argued that the
Yellow Sea was the “strategic passage” of China’s heartland and military
exercises conducted by other countries in the region would bring “pressures
to China’s security.”20
 In addition to joint military exercises with South Korea, the United States
held many joint military drills with other regional allies and partners, which
also increased China’s sense of being threatened. In the wake of the China–
Japan standoff over the arrest of the captain of a Chinese fishing boat in
waters near the disputed Diaoyu/Senkaku Islands, the United States held a
joint military exercise with Japan in December 2010. The U.S.-led military
exercise was apparently aimed at reassuring its Japanese ally as well as
sending a deterrence message to China. However, it increased China’s sense
of being encircled. Bian Qingzhu, a senior strategic analyst and research
fellow affiliated with the Peace and Development Research Center under
the State Council, accused U.S. military exercises in sensitive areas in the
Asia Pacific region of being like “Xiang Zhuang performing the sword
dance as a cover for his attempt on Liu Bang’s life” (Xiangzhuan wujian,
yizai peigong).21 Similarly, a 2010 Global Times poll also found that 81.6
percent of the Chinese public believed that the United States either had the
intention or both had the intention and showed the behavior of containment
against China, an increase of about 3 percent as compared to the 2009
number.22
In responding to U.S. military exercises, the People’s Liberation Army
(PLA) also held a series of drills. Between the end of June and early August
of 2010, the PLA had held seven military exercises, including a live-fire
exercise near the Yellow Sea by the artillery troops of the Nanjing Military
Region, and a joint live-fire exercise by the destroyers from China’s three
major fleets, the East China Sea Fleet, the North China Sea Fleet, and the
South China Sea Fleet.23
Apparently, the military exercises conducted by both sides underlie the
deepening of strategic distrust as well as the emerging security dilemma
between Beijing and Washington.

U.S. intervention in the South China Sea disputes and China’s responses
On July 22, 2010, Secretary Clinton stated at the foreign ministerial
meeting of the ASEAN Regional Forum (ARF) in Hanoi that the United
States “has a national interest in freedom of navigation” in the South China
Sea. While declaring that the United States would not “take sides” on the
competing territorial disputes in the South China Sea, Clinton nevertheless
made no secret of the U.S. position of “oppos(ing) the use or threat to use
force by any claimant” and urged all the claimants to engage in a
“collaborative diplomatic process” for resolving the various disputes
“without coercion.”24 Clinton’s statement concerning the South China Sea
was partly a “push back” to the perceived growing Chinese assertiveness in
maritime disputes and the presumed Chinese assertion of the South China
Sea as China’s “core interest” earlier in the year.25 The U.S. putting its
diplomatic weight behind the South China Sea disputes did put pressure on
China. In fact, enraged by Clinton’s remarks at the ministerial meeting,
Chinese Foreign Minister Yang Jiechi quickly made a strongly worded
seven-point rebuttal following Clinton’s speech, accusing that “the
seemingly impartial remarks were in effect an attack on China,” a “scheme .
. . to internationalize the South China Sea issue,” and were “designed to
give the international community a wrong impression that the situation in
the South China Sea is a cause for grave concern.” Arguing that the
situation in the South China Sea is “peaceful and stable” and navigational
freedom and safety had not been hindered, Foreign Minister Yang stated
that the non-claimant countries resented the fact that the United States tried
to “coerce them into taking sides” in the South China Sea disputes and that
turning the issue into an “international or multilateral one” would “only
make matters worse or resolution more difficult.”26 Many in Chinese
foreign policy circles were more blunt in interpreting U.S. intervention in
the South China Sea disputes as part of a U.S. grand strategy to contain
China and to “meddle in the Asia Pacific regional affairs” by “fomenting”
tensions between China and other claimant countries.27 Nevertheless, a few
scholars hold a dissenting view. For instance, Pang Zhongying, a leading
international relations expert at Renmin University, argued that the U.S.
advocating a “multilateral” approach to the South China Sea could not be
simply equated to “taking the sides of Southeast Asian countries” and urged
China to adopt a more flexible attitude toward the multilateral approach
which he dubbed as “flexible multilateralism” (linghuo duobian zhuyi).28

Engagement, containment, or hedging (liangmian xiazhu)?

Most Chinese strategic analysts did hold a relatively reasonable view of
U.S.– China relations and indeed saw the coexistence of cooperative and
competitive elements in the bilateral relationship. Wu Xingtang, former
Director of the Research Institute of the International Department of the
Central Committee of the Communist Party of China (CCCPC), argued that
the U.S. “returning to Asia” was aimed at “encircling and blocking” (weidu)
China but meanwhile acknowledged that “cooperation and win-win remains
mainstream” of U.S.–China relations and the “areas of cooperation continue
to expand and deepen.”29 Liu Jianfei, Deputy Director of the Institute for
International Strategy at the Central Party School, argued that the
adjustment in U.S. policy toward China was meant to “take a precautionary
measure against (fangfan), pin down (qianzhi) and balance (zhiheng)
China,” but it also implied “enhancing cooperation with China.” Despite
some “negative elements” in China’s neighboring environment, including
the flare-up of territorial disputes between China and a few countries as
well as military drills partly targeting China, Liu believed that there was no
“fundamental reverse” in China’s peripheral environment (zhoubian
huangjing) and that China still faced an “important period of strategic
opportunity” (zhongyao zhanlue jiyu qi).30 Similarly, Zhu Feng, a
prominent international security expert and Deputy Director of the Center
for International and Strategic Studies at Peking University, argued that
while the Obama administration’s assertive “returning to Asia” strategy was
meant to “continue to consolidate its leadership” and essentially was a
“peaceful containment” strategy, the United States would continue to
maintain an “engagement policy” toward China and would not “seek a
direct strategic confrontation with China.”31 Without using the term
“hedging,” these analysts actually point to the hedging strategy the United
States is deploying toward China.
There are several other scholars and strategic analysts who actually took
note of U.S. hedging strategy toward China. For instance, Jin Canrong, a
leading international relations scholar and Associate Dean of School of
International Studies at Renmin University, pointed out that U.S. strategy
can be called a strategy of “liangmian xiazhu” (“betting on both sides,” a
Chinese translation of “hedging”): the United States would “define China as
main partner in name, but in practice it remains vigilant against China; with
two-handed preparations (liangshou zhunbei), it is a strategy that combines
“pulls and pushes” (youla youda) or “pushes and pulls” (youda youla).”32
Jin’s view was shared by several other scholars. Wang Yizhou, another
prominent international relations (IR) scholar and Associate Dean of School
of International Studies at Peking University, agreed that U.S. strategy
toward China was one of “betting on both sides,” not simply one of
containment.33 Similarly, Yuan Zheng argued that U.S. “betting on both
sides” policy toward China was characterized by elements of both
engagement and fangfan (taking precautionary measures). While Yuan
believed U.S. “strategic layout” (zhanlue buju) in Asia was largely designed
with an eye on China, yet both sides had the “willingness and need for
cooperation.”34 Bian Qingzu noted that U.S. “betting on both sides”
strategy remained “unchanged” and the elements of cooperation and
competition co-existed in U.S.–China bilateral relations.35

Strategic pivot and China’s reactions

In November 2011, Sectretary Clinton published in Foreign Policy an
article that unveiled the U.S. “strategic pivot” to Asia. Claiming that a
“strategic turn” to the Asia Pacific “fits logically our overall global efforts
to secure and sustain America’s global leadership,” Clinton argued that U.S.
military alliances with Japan, South Korea, Australia, the Philippines, and
Thailand would remain “the fulcrum for our strategic turn to the Asia
Pacific.”36
During his visit to Australia following the declaration of U.S. “strategic
pivot,” U.S. President Obama announced that the United States would begin
“rotating” up to 2,500 U.S. Marines at Darwin, Australia in a permanent
military presence. Coinciding with Obama’s visit to Australia, Clinton paid
a visit to the Philippines and gave strong support to Manila. During a joint
press appearance with the Philippine Foreign Secretary Albert Del Rosario,
Clinton stated that she “strongly” held the view that the disputes between
China and the Philippines over the disputed “West Philippine Sea”—using
Manila’s reference to the South China Sea—should be resolved peacefully.
Earlier in the day, Clinton, when boarding the U.S. navy destroyer USS
Fitzgerald and at the conclusion of the signing of a declaration marking the
sixtieth anniversary of the U.S.–Philippines Mutual Defense Treaty, vowed
to “provide for greater support for external defense” and “always stand and
fight with” America’s Philippine ally.37
 Not surprisingly, the U.S. moves were taken by Chinese strategic analysts
as aiming at restraining China. Liu Jiangping, a noted military expert and
associate editor of Modern Navy, a military magazine affiliated with the
Political Department of the PLA Navy, suggested that a “containment
circle” (ezhi quan), consisting of U.S. military bases along China’s
periphery ranging from Japan to South Korea, Australia, Guam, and all the
way to the Indian Ocean, was “tightening up.”38
As the tensions in the South China Sea rose, the United States
increasingly asserted its position through diplomatic and military moves
with the aim of reassuring its allies and deterring the perceived increasing
assertiveness of China. In the midst of U.S. Secretary of Defense John
Panetta’s visit to Asia in October 2011, the U.S. military held a large-scale
joint exercise with the Philippine military, which was interpreted by the
Chinese media as an attempt to “intimidate” China.39 Major General Luo
Yuan insisted that “China has always held that disputes should be resolved
through negotiations,” and yet if some countries “flaunt their forces,” it
would only “intensify contradictions.” Luo warned, bluntly, that if China
were to be forced to “draw the sword” (liangjian), it would “probably carry
more serious consequences than ‘flexing muscles’.”40 The nationalistic-
leaning Global Times also warned some claimants to prepare for “the
sounds of cannons” if they did not change their alleged provocative way of
dealing with China.41
When Lieutant General Burton Field, Commander of U.S. Forces in
Japan, demanded at a press conference in Tokyo in March 2012, that China
“respect freedom of navigation and take responsible actions” in the South
China Sea, the People’s Daily, the official newspaper of the CCCPC,
responded by accusing the United States of being irresponsible for
“frequently holding military drills with the countries around the sea clearly
targeting against China” and of “forcing Asian countries to take sides
between the United States and China and even deliberately smearing
normal cooperation between China and its surrounding countries.” It
alleged that the United States “deliberately blurs the issue of the freedom of
navigation and the issue of territorial sovereignty” as a step to “implement
its ‘returning to Asia’ strategy.”42
 Meanwhile, there are scholars and analysts who hold moderate views.
Wu Jianmin, former Chinese Ambassador to France and Member of the
Policy Consultative Committee of the MFA, was among them. Ambassador
Wu criticized the radical idea—shared by some Chinese—of using force to
resolve maritime disputes: “many people believe that everything will be
fine if a war is won. Such a view is utterly wrong. Using force in the South
China Sea will cause China’s periphery to slide into chaos.”43 Similarly, Qu
Xing, President of the China Institute for International Studies affiliated
with the MFA, argued that tensions in the South China Sea were detrimental
to every country’s national interest and “joint development will be a very
pragmatic path going forward.”44

China and the Trans-Pacific Partnership agreement

During his November 2009 trip to Asia, U.S. President Obama announced
the U.S. intention to take part in the Trans-Pacific Partnership (TPP)
negotiations. By reviving the once-stalled TPP negotiation process, the
Obama administration aimed at boosting U.S. exports and economic growth
through the conclusion of a high-standard, ambitious, next-generation Asia
Pacific free trade agreement. The TPP has since then become the
cornerstone of the Obama administration’s economic policy in the Asia
Pacific.45 U.S. entry into and active promotion of the TPP negotiations has
generated heated debate in China as to what the real intentions of the U.S.
move were as well as what the implications would be for China.
Unsurprisingly, Chinese analysts widely believed that the United States
intended to “maintain its dominant position in the Asia Pacific region.”46
Seeing the TPP as an integral part of U.S. strategy to “pivot” to Asia, most
Chinese analysts held that the implementation of the TPP would weaken
China’s economic cooperation with Asia Pacific countries, negatively affect
China’s strategy of promoting regional integration, and pose a serious
challenge to China’s rise.47 There are also scholars, however, who are less
worried about the TPP. For instance, Yang Jiemian, a prominent
international relations scholar and President of the Shanghai Institute for
International Studies, argues that U.S. advocacy of the TPP was intended to
weaken China’s influence in the Asia Pacific region, but not to contain
China. Therefore, it should be regarded as “soft confrontation” rather than
containment.48 Still others, likening the TPP to an “Empty Fortress”
(kongcheng ji), believe that it is uncertain whether the TPP negotiations will
succeed and thus China does not need to overly worry about the U.S.
rhetoric.49
The Chinese government, however, has refrained from directly criticizing
the TPP, and has thus taken a wary attitude toward it. It was not until
recently that the Chinese government has taken a more proactive attitude
toward the TPP. In May 2013, the Ministry of Commerce (MOFCOM)
spokesperson acknowledged that the Chinese government had been closely
“following” the progress of the TPP negotiations and “studying” the pros
and cons as well as the possibility of joining the TPP negotiations. And the
MFA spokesperson followed suit by stating that China took an “open
attitude” toward the TPP.50 The Chinese government’s change in tone has
sparked speculation among Western analysts as to whether or not China
would consider joining the TPP negotiations. Indeed, a number of Chinese
analysts, including researchers who are affiliated with the MOFCOM, and
presumably wield some influence in China’s policy making, have argued
that China should take a more open and active attitude toward the TPP and
have urged China to take part in the TPP negotiations so as to help push
forward critical domestic economic reforms and economic growth. For
instance, citing China’s experience of joining the World Trade Organization
(WTO), Wang Zhile, a senior researcher at the Chinese Academy of
International Trade and Economic Cooperation affiliated with the
MOFCOM, argues that China’s active involvement in the TPP process
would help “lock-in” China’s reform momentum and provide a “new and
bigger driving force” for pushing forward “deeper economic institutional
reforms.” Moreover, unlike the WTO process, Wang points out, joining the
TPP talks at an early stage would help China “avoid marginalization” and
“gain a say” in the making of international economic and trade rules.51
The Chinese government’s proactive attitude was further manifested in
an important speech delivered by Chinese Premier Li Keqiang at the tenth
China-ASEAN Expo on September 5, 2013. During his remarks, Li pointed
out that China would work together with ASEAN to promote the Regional
Comprehensive Economic Partnership (RCEP), and facilitate interactions
between the RCEP and other regional cooperative mechanisms such as the
TPP. Likening the RCEP and the TPP as the “two wheels” of regional
cooperation and trade arrangements, Li emphasized that we should ensure
that “the wheels will roll in tandem.”52

Rebalancing, U.S. strategic guidance, and China’s reactions

The term “pivot to Asia”, however, was soon criticized after its unveiling by
U.S. analysts for implying that the United States was “disengaging” from
other parts of the world, ranging from Europe to the Middle East and,
worse, that U.S. global influence was “eroding.”53 Secretary Clinton had to
come out and dispel the doubt that the United States was retreating from
Europe, stating that U.S. “pivot to Asia is not a pivot away from Europe.”54
And U.S. strategic analysts warned that the United States “can’t pivot away
from the Middle East.”55 The Obama administration later substituted the
term “pivot” with the less controversial “rebalance,” as the Pentagon
revealed in the new strategic guidance issued in January 2012 that the
United States would “of necessity rebalance toward the Asia Pacific
region.”56 Nevertheless, the term “pivot” persisted among policy circles
despite the Obama administration’s changing the label of its Asia strategy.

“Structural contradictions” (jiegouxing maodun)?

As the strategic competition between China and the United States grew
tense, some Chinese strategic analysts pointed to the “structural
contradictions” between the two countries and began to worry that “the
China–U.S. strategic confrontation is inevitable.” Wang Jisi, one of the
most prominent IR scholars in China and Dean of Peking University’s
School of International Studies, wrote that the “perception gap on important
international issues between the two is increasing rather than narrowing”
and predicted that “the space for future strategic cooperation between the
two countries will be squeezed, and big confrontations will be difficult to
avoid.”57 Yuan Peng, a leading U.S. specialist at China Institute of
Contemporary International Relations affiliated with the Ministry of
National Security, attributed the origins of the “structural contradictions” to
the change in the relative power between China and the United States
caused by China’s “over-expectation-rise” and U.S.’ serious injury inflicted
by the unexpected financial crisis, as well as the “perceptual dislocation” of
the change in each other’s power position.58 Wang Yizhou held a more
cautiously optimistic view. While agreeing that the “structural
contradictions” between China and the United States would continue to
unfold in issue areas ranging from trade to human rights, outer space,
maritime security, and cyber-space, Wang Yizhou nevertheless believed that
the high degree of interdependence and shared common interests between
Beijing and Washington would prevent U.S.–China frictions from
developing into “comprehensive confrontation.”59

Taking the long view

While the hardliners in China perceived U.S. pivot/rebalancing to Asia as
encircling and containing China, quite a number of moderate analysts held
that the U.S. returning to Asia would not necessarily render China and the
United States “strategic rivals.”
Wang Fan, a leading U.S. specialist and Assistant President of the
Foreign Affairs University affiliated with the MFA, argued that U.S.
returning to Asia did not mean a fundamental shift in U.S. strategy toward
East Asia. Moreover, Wang Fan believed that the frictions between China
and the United States did not amount to “great power strategic
competition,” and “strategic coordination and cooperation” would remain
possible even after U.S. “returning to Asia.”60
In the eyes of moderate analysts, the shift in U.S. strategy toward East
Asia does have the intent of “fangfan” (taking a precautionary measure
against) China, and yet it should be distinguished from a containment
strategy.61 Moreover, some analysts believed that the readjustment in U.S.
East Asia strategy at the same time brought certain opportunities for
promoting regional economic and security cooperation.62 Ambassador Wu
Jianmin offered a typical moderate view, arguing that China’s own choices
actually determine whether or not the U.S. pivot to Asia would lead to a
deterioration of China’s peripheral environment.63
There were also moderate voices in the mainstream media. One month
after the announcement of U.S. pivot to Asia, the People’s Daily published a
set of commentaries that suggested China should take a long view. Quoting
a line from one of Mao Zedong’s poems, the commentaries held that China
should “range far your eye for long vistas” (fengwu changyi fangyan liang).
Authored by senior correspondents of the newspaper, the commentaries
argued that Southeast Asian countries did not want to choose between
China and the United States and that U.S. policy in the region was, in fact,
in the words of Harvard Professor Joseph Nye, one of “prudent hedging
strategy.”64
Taking the long view, some Chinese strategists have put forth more
sophisticated strategic ideas in dealing with the U.S. rebalancing. For
instance, in October 2012, the preeminent scholar Wang Jisi proposed the
strategy of “marching westwards” (xijin zhanlue) as a way to “rebalance”
China’s geo-strategy, deflect increasing tensions in U.S.–China relations,
and extricate China from the complex regional quagmire it has been trapped
in partly due to U.S. rebalancing to Asia.65 The idea has generated debate in
China and drawn attention from the Chinese government. Reportedly, the
idea has gone beyond an academic proposal and has been embraced by the
relevant agencies of the Chinese government.66

Conclusion
Since the U.S. announcement of “returning to Asia” in 2009, the shift in
U.S. strategy towards Asia has generated heated debate among strategic
circles in China. Hardliners perceive U.S. pivot or rebalancing as a
containment strategy, whereas moderates argue that China should not
“overly worry” and there could be “co-existence of competition and
cooperation” in U.S.–China relations.
Despite the hardliners’ dire and pessimistic analyses of U.S. pivot or
rebalancing to Asia, the moderates’ more optimistic assessments are largely
shared by Chinese policy makers. Rejecting the hardliners’ prescription of a
more confrontational approach to U.S.–China relations, Chinese policy
makers stressed the importance of “constructive, non-adversarial ties” with
the United States.67 Chinese leaders’ sober-mined approach also underlies
the confidence that time is on China’s side as long as it is committed to
peaceful development. Such a belief is best expounded in an influential
long essay authored by Dai Bingguo, China’s State Councilor in charge of
the foreign affairs portfolio, first published at the MFA website and then
leading Chinese news outlets such as China Daily and Beijing Review.
Calling the assertion that China intends to displace the United States and
dominate the world as “a myth,” Dai went on to discuss, among other
things, the definition, imperative of and conditions for China’s peaceful
development strategy.68 Dai’s ideas were further developed and manifested
in the White Paper on China’s Peaceful Development, released by the State
Council on September 6, 2011.69 Immediately after the release of the white
paper, Dai published a series of essays elaborating on China’s peaceful
development in media outlets both at home and abroad.70
Preceding President Hu Jintao’s state visit to the United States in January
2011, Dai’s essay set the tone for China’s official policy toward the United
States. Equally, if not more, important is the moderate stance on security
issues by most of the top military leaders in China, albeit occasional
hardline remarks by some military officers’ regarding U.S. rebalancing. For
instance, General Liang Guanlie, China’s Defense Minister, spoke about the
imperative of inclusive security cooperation at the tenth Shangri La
Dialogue, held in Singapore in June 2011. Rejecting the zero-sum concept
and cold-war mentality, General Liang argued that “trust starts with
engagement” and countries should “read each other’s strategic intentions
rationally and objectively.”71
In December 2011, Assistant Foreign Minister Le Yucheng called for a
“cooperative” rather than “confrontational” approach to U.S.–China
relations at a conference held at Foreign Affairs University. Noting that the
United States “has never left the Asia Pacific,” Le argued that China “has
neither desire nor capability to push the United States out of ” the region.
“The Pacific Ocean is vast enough to accommodate the co-existence and
cooperation” between the two big powers of China and the United States,
Le noted.72 Similarly, ahead of his visit to the United States in January
2012, then Chinese Vice President Xi Jinping told The Washington Post that
“the vast Pacific Ocean has ample space for both China and the United
States,” adding, “we welcome a constructive role by the United States in
promoting peace, stability and prosperity in the region. We also hope that
the United States will fully respect and accommodate the major interests
and legitimate concerns of Asia-Pacific countries.”73 At the summit
meetings with U.S. President Obama held at Sunnylands, California in June
2013, Chinese President Xi Jinping reiterated his belief that “the vast
Pacific Ocean has enough room to accommodate” the development of two
major powers, the United States and China.74 The Chinese comment,
sometimes misconstrued by Western analysts as implying for a division of
sphere of influence in the region, in fact reflects Chinese leaders’ conviction
that China – as the rising power–does not need to be on a collision course
with the United States, the established dominant power. Rhetoric aside,
these statements and remarks show that Chinese leaders are trying to avoid
the emerging security dilemma between China and the United States, and
thus seeking a non-zero-sum path forward for U.S.–China relations.75
Moreover, Chinese leaders have been actively advocating building a “new
type of great power relationship” (xinxing daguo guanxi) between China
and the United States as a way to break the “old pattern” of great power
conflict, and thus to avoid the so-called “Thucydides trap.”76
It is worth noting that such positions of the Chinese leaders echo the
views of U.S. officials. As U.S. Secretary Clinton pointed out in a speech at
the U.S. Institute of Peace in March 2012, “We are now trying to find an
answer, a new answer to the ancient question of what happens when an
established power and a rising power meet.”77
Interestingly, quite a number of prominent American analysts have
become critical of the Obama administration’s handling of the U.S. pivot or
rebalancing to Asia, particularly of the way it was rolled out.78 Even the
administration officials have now acknowledged that too much emphasis
had been initially put on the military and security aspects of the pivot.79 In
fact, the second Obama administration has taken steps to recalibrate its
approach to pivot/rebalancing—one could call it “rebalancing the
rebalancing strategy”—by emphasizing that engagement with China would
be one of the pillars of U.S. rebalancing to Asia. In a major foreign policy
speech delivered at the Asia Society in March 2013, U.S. National Security
Advisor Thomas Donilon stressed that “building a stable, productive, and
constructive relationship with China” would be one of the pillars of U.S.
rebalancing strategy.80 Moreover, after some initial wariness and hesitation,
U.S. leaders have become increasingly more receptive to the Chinese
proposal of building a new type of great power relations, apparently with an
attempt to solicit or encourage more Chinese cooperation on a wide range
of regional and global challenges. At the Sunnylands summit meetings, U.S.
President Obama responded positively to the idea.81 Again, in her first
major Asia policy speech given in November 2013, newly appointed U.S.
National Security Advisor Susan Rice made clear the U.S. desire to
“operationalize a new model of major power relations” between the U.S.
and China.82
Predictably, U.S. pivot/rebalancing to Asia will continue to generate
debates in China’s scholarly and policy communities. Going forward, China
and the United States have to take steps to address the emerging security
dilemma between the two countries. Only by doing so can the two avoid the
self-fulfilling prophecy of strategic rivalry and pave the way for not only a
cooperative and positive bilateral relationship, but also a more peaceful and
prosperous region in the years and decades to come.

Notes
1 Yoichi Kato, “Interview with Kurt Campbell: China Should Accept U.S. Enduring Leadership
Role in Asia,” Asahi Shimbun, February 9, 2013,
http://ajw.asahi.com/article/views/opinion/AJ201302090016; Mark E. Manyin, Stephen Daggett,
Ben Dolven, Susan V. Lawrence, Michael F. Martin, Ronald O’Rourke, and Bruce Vaughn,
“Pivot to the Pacific? The Obama Administration’s ‘Rebalancing’ toward Asia,” Congressional
Research Service (CRS) Report R42448, Summary.
2 Kato, “Interview with Kurt Campbell”; Manyin et al., “Pivot to the Pacific,” Summary.
3 For useful analyses of China’s reactions to U.S. pivot/rebalancing strategy, see Michael D.
Swaine, “Chinese Leadership and Elite Responses to the U.S. Pacific Pivot,” Chinese
Leadership Monitor, No. 38, Hoover Institution, August 6, 2012; Zhu Feng, “U.S. Rebalancing
in the Asia-Pacific: China’s Response and the Future Regional Order,” Discussion Paper No. 12,
2012, published by Center for Strategic Studies, New Zealand and Victoria University of
Wellington.
4 “U.S. is ‘Back In’ Asia, U.S. Secretary of State Hillary Clinton Declares,” Associated Press, July
21, 2009.
5 U.S. Secretary of State Hillary Rodham Clinton, “Press Availability at the ASEAN Summit,”
Sheraton Grande Laguna, Laguna Phuket, Thailand, July 22, 2009,
www.state.gov/secretary/rm/2009a/july/126320.htm.
6 “U.S. Returning to Asia for the Long Haul: Clinton,” Exclusive interview by the Nation, July
22, 2010, www.nationmultimedia.com/2009/07/23/politics/politics_30108155.php.
7 Remarks by President Barack Obama at Suntory Hall, Tokyo, Japan, November 14, 2009,
www.whitehouse.gov/the-press-office/remarks-president-barack-obamasuntory-hall.
8 Dai Qingcheng, “Gaodu jingjue meiguo ‘chongfan’ yazhou” (Highly Vigilant against U.S.
“Returning” to Asia), Huanqiu shibao (Global Times), July 24, 2009, p. 14.
 9 Shen Dingli, “Huangying Meiguo shou guiju de chongfan yazhou” (Welcome U.S. Return to
Asia When It Behaves Well), Huanqiu shibao, July 28, 2009, p. 14.
10 Huanqiu shibao, “Zhongguoren ruhe kan shijie (2008)” (How the Chinese View the World
(2008)), www.huanqiu.com/2008ending/ending-1.html.
11 The Horizon, “Rentong yu qiwang: Zhongguo gongzhong he zaihua waiguoren yanzhong de
Zhongguo guojia diwei diaocha” (Identity and Expectations: Survey on Perspectives of China’s
National Status by the Chinese Public and Foreigners Residing in China),
www.horizonkey.com/c/cn/news/2010-03/17/news_914.html.
12 Huanqiu shibao, “Zhongguoren ruhe kan shijie (2008).”
13 Huanqiu shibao, “Zhongguoren ruhe kan shijie (2011)” (How the Chinese View the World
(2011)), http://world.huanqiu.com/roll/2011-12/2318045.html.
14 Ibid.
15 See, for instance, Yuan Zheng et al., “Aobama zhengfu duiwai zhanlue de tiaozheng ji duiwo de
yingxiang” (The Re-adjustment of the Obama Administration’s External Strategy and Its
Implications for Our Country), in Huang Ping and Ni Feng, (eds), Meiguo wenti yanjiu baogao
(2011) (Report on American Studies 2011), Beijing: Shehui kexue wenxian chubanshe, 2011, p.
193; Zhao Minghao, “Chongfan haishi chonggou: shixi dangqian Meiguo yatai zhanlue
tiaozheng” (Returning or Reconstructing?—An Analysis of Current Re-adjustment of America’s
Asia Pacific Strategy), Dangdai shijie (The Contemporary World), December 2010, p. 55.
16 Yuan Zheng, “Meiguo duiwai zhanlue shousuo shizai biran” (The Retreat of U.S. External
Strategy is Inevitable), November 3, 2010, http://ias.cass.cn/show/show_project_ls.asp?
id=1520; Yuan Zheng, “ ‘Chongfan yazhou’: Ao’bama zhengfu dongya zhengce pingxi”
(“Returning to Asia”: An Analysis of the Obama Administration’s East Asia Policy), Dangdai
shijie, January 2011, p. 52.
17 Bian Qingzu, “Kunnan yinian de zhongmei guanxi” (China-U.S. Relations in a Difficult Year),
in Zhang Deguang, ed., Weiji, boyi, biange: 2010 nian guoji xingshi yu Zhongguo waijiao
(Crisis, Game, and Change: The International Situation and Chinese Diplomacy in 2010),
Beijing: Shijie zhishi chubanshe, 2011, p. 150; “Luo Yuan: Meiguo duitai junshou yizai ezhi
Zhongguo jueqi” (Luo Yuan: U.S. Arms Sales to Taiwan Aimed at Containing the Rise of
China,” February 1, 2010, The Xinhua Net, http://news.xinhuanet.com/mil/2010-
02/01/content_12912505.htm; “Luo Yuan: Mei duitai junshou bi women chuangshang ‘kaijia’ ”
(Luo Yuan: U.S. Arms Sales to Taiwan Force Us to Put on Armor), March 9, 2010, The Xinhua
Net, http://news.xinhuanet.com/mil/2010-03/09/content_13132651_1.htm.
18 Yuan Yuan and Li Zhenzhen, “Yi zhanlue zuhequan fanzhi mei guitai junshou” (Using Strategic
Combination Blow to Counter U.S. Arms Sales to Taiwan), Liaowang xinwen zhoukan
(Liaowang News Weekly), February 8, 2010, No. 6, pp. 35–36.
19 “Waijiaobu fayanren Qing Gang jiu Han Mei xuanbu jiang juxing lianhe junyan da jizhe wen”
(MFA Spokesman Qing Gang’s Answer to Journalists’ Questions Concerning the ROK-U.S.
Announcement of Joint Military Exercise), July 21, 2010, MFA, Beijing,
www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/dhdw/t718562.htm.
20 “Luo Yuan shaojiang shendu poxi Zhongguo fandui Mei Han huanghai junyan de wudian yiju”
(Major General Luo Yuan’s In-depth Anatomy of the Five Points of China’s Opposition to U.S.-
ROK Military Exercise in the Yellow Sea), July 13, 2010,
http://military.people.com.cn/GB/42969/58519/12132612.html.
21 Bian Qingzu, “Kunnan yinian de zhongmei guanxi,” p. 151.
22 Huanqiu shibao, “Zhongguoren kan shijie” (Chinese View the World), January 4, 2011,
http://poll.huanqiu.com/dc/2011-01/1395647_12.html.
23 Li Shaojun, “Daguo guanxi yu shijie geju xinbianhua” (Great Power Relations and New
Changes in the World Landscape), in Li Shenming and Zhang Yuyan, (eds), Quangqiu zhengzhi
yu anquan baogao 2011 (Annual Report on International Politics and Security 2011), Beijing:
Shehui kexue wenxian chubanshe, 2011, pp. 30–31.
24 Secretary of State Hillary Rodham Clinton’s Remarks at Press Availability, Hanoi, Vietnam, July
23, 2010, www.state.gov/secretary/rm/2010/07/145095.htm; “Offering to Aid Talk, U.S.
Challenge China on Disputed Islands,” The New York Times, July 23, 2010,
www.nytimes.com/2010/07/24/world/asia/24diplo.html.
25 Author’s interview with U.S. Department of State officials, September 2010, Beijing, China. For
the controversial story of China’s alleged declaration of the South China Sea as its “core
interest,” see “China Hedges over Whether South China Sea is a Core Interest,” The New York
Times, March 30, 2010, www.nytimes.com/2011/03/31/world/asia/31beijing.html. Michael
Swaine’s careful documentation of the episode reveals that Chinese leaders actually had never
made such an assertion and the narrative might just be the result of media mis-representation or
misunderstanding. See Michael Swaine, “China’s Assertive Behavior: On ‘Core Interest’,”
China Leadership Monitor, No. 34, 2010, http://media.hoover.org/documents/CLM34MS.pdf.
26 “Foreign Minister Yang Jiechi Refutes Fallacies on the South China Sea Issue,” Ministry of
Foreign Affairs, China, July 26, 2010, www.fmprc.gov.cn/eng/zxxx/t719460.htm.
27 Yang Yuejin et al., eds, 2010 nian Zhongguo guojia anquan gailan (Review of China’s National
Security in 2010), Beijing: Shishi chubanshe, 2011, pp. 402–405; Qu Xing, (ed.), Guoji xingshi
he Zhongguo waijiao lanpishu (2010/2011) (The Bluebook on the International Situation and
China’s Diplomacy, 2010/2011), Beijing: Shishi chubanshe, 2011, pp. 5–6; Bian Qingzu,
“Kunnan yinian de zhongmei guanxi,” pp. 151–152.
28 Pang Zhongying, “Nanhai wenti, bufang huange silu” (Why Not Change a Way of Thinking on
the South China Sea Issue), Huanqiu shibao, August 2, 2010, p. 14.
29 Wu Xingtang, “Zhongmei guanxi fengyun duobian quzhe qianjin” (With Clouds Hanging over,
U.S.-China Relations Zigzag), Hongqi wengao (Red Flag Manuscripts), October 2010,
http://theory.people.com.cn/GB/13067695.html.
30 Liu Jianfei, “Zhongguo zhoubian huanjing bingwei gengben nizhuan” (There Is No
Fundamental Reverse in China’s Neighboring Environment), Liaowang xinwen zhoukan (The
Outlook News Weekly), November 15, 2010, No. 46, p. 63.
31 Zhu Feng, “ ‘Chongfan dongya zhanlue’ yu Ao’bama zhengfu de dongya qiangshi waijiao”
(“Returning to Asia Strategy” and the Obama Administration’s Assertive Diplomacy in East
Asia), Guoji zhanlue yanjiu jianbao (International and Strategic Studies Report), No. 49,
October 31, 2010.
32 “Xilali fawen cheng meilai 10 nian Meiguo zhanlue zhongxin jiang zhuanxiang yatai” (Hillary
Publishes Article Claiming that the U.S. Strategic Gravity will Shift to the Asia Pacific in the
Next 10 Years), Renminwang (The People’s Net), October 15, 2011,
http://news.xinhuanet.com/world/2011-10/15/c_122160772.htm.
33 Ye Yu, “Wang Zyizhou: yingdui tiaozhan, Zhongguo yao xiahao ‘xianshouqi’ ” (Wang Yizhou:
In Dealing with Challenges, China Should Play Well “Offensive Move”), 21 shiji jingji baogao
(21st Century Economic Report), March 20, 2010, www.21cbh.com/HTML/2012-3-
20/4MMDY5XzQxMTE4MA.html.
34 Yuan Zheng et al., “Ao’bama zhengfu duiwai zhanlue de tiaozheng yi dui woguo de yingxiang,”
pp. 197–200.
35 Bian Qingzu, “Kun’nan yinian de Zhong Mei guanxi,” pp. 156–157.
36 Hillary Clinton, “America’s Pacific Century,” Foreign Policy, November 2011,
www.foreignpolicy.com/articles/2011/10/11/americas_pacific_century?page=full.
37 “Remarks by Secretary of State Hillary Clinton at the Presentation of the Order of Lakandula,
Signing of the Partnership for Growth and Joint Press Availability with Philippines Foreign
Secretary Albert Del Rosario,” Manila, Philippines, November 16, 2011,
www.state.gov/secretary/rm/2011/11/177234.htm; Christine O. Avandeno, “Clinton Vows
Greater Support for Philippine Defense,” Philippine Daily Inquirer, November 17, 2011,
http://globalnation.inquirer.net/18437/clinton-vows-greater-support-for-ph-defense.
38 Han Shuang et al., “Ao’bama jiangfang Aobei jidi, ‘ezhi lian’ zhishuo youtian xuetou” (Obama
Will Visit Base in Northern Australia, More Gimmick Added to the “Containtment Chain”
Thesis), Huanqiu shibao, October 29, 2011, p. 8.
39 Ji Peijuan and Wang Xiaoxiong, “Mei Fei zai Nanhai junyan xiahu Zhongguo” (The U.S. and
the Philippines Hold Military Exercise in the South China Sea to Intimidate China), Huanqiu
shibao, October 25, 2011, p. 3.
40 “Luo Yuan: Zhongguo re’ai heping, bujupa weixie” (Luo Yuan: China Loves Peace but is Not
Afraid of Threat), Huanqiu shibao, June 15, 2011, p. 3.
41 Editorial, “Don’t Take Peaceful Approach for Granted,” Global Times, October 25, 2011,
www.globaltimes.cn/NEWS/tabid/99/ID/680694/Dont-take-peaceful-approachfor-granted.aspx.
42 Zhong Sheng, “The U.S. should Not Muddy the Waters over South China Sea,” The People’s
Daily, March 20, 2012, http://english.peopledaily.com.cn/90780/7762712.html.
43 “Jiejue nanhai wenti ruo kaoda, zhoubian jushi fan xianru hunluan” (If Force is Used to Resolve
the South China Sea, China’s Periphery will Slide into Chaos), Nanfang ribao (Southern Daily),
March 24, p. A04.
44 “Qu Xing: nanhai diqu jinzhang buliyu geguo guojia liyi” (Qu Xing: Tensions in the South
China Sea Detrimental to Every Country’s National Interests), Phoenix TV, July 22, 2011,
http://news.ifeng.com/mainland/special/nanhaizhengduan/content-
1/detail_2011_07/22/7875825_0.shtml.
45 Office of the United States Trade Representative, “The United States in the Trans-Pacific
Partnership,” www.ustr.gov/about-us/press-office/fact-sheets/2011/november/united-states-
trans-pacific-partnership.
46 Ding Gang, “Zhongguo ying jinkuai jiaru TPP tanpan” (China Should Participate in the TPP
Negotiations as Soon as Possible), Huanqiu shibao, November 15, 2011, p. 15.
47 Shen Minghui, “TPP de chengben shouyi fenxi” (The Cost-Benefit Analysis of TPP), Dangdai
yatai (Contemporary Asia Pacific), No. 1, 2012, p. 34; Li Xiangyang, “Kua taipingyang huoban
guanxi xieding: Zhongguo jueqi guocheng zhong de zhongda tiaozhan” (The Trans-Pacific
Partnership: A Major Challenge in the Process of China’s Rise), Guoji jingji pinglun
(International Economic Review), No. 2, 2012, pp. 18–27.
48 Yang Jiemian, “Meiguo shili bianhua yu guoji tixi chongzu” (Changes in U.S. Power and the
Re-ordering of the International System), Guoji wenti yanjiu (Studies of International Issues),
No. 2, 2012, p. 57.
49 Pang Zhongying, “TPP jiushi yichu ‘kongcheng ji’ ” (TPP is an Empty Fortress), Huanqiu
shibao, November 19, 2011, p. 7.
50 Ma Tianyun and Wang Jianhua, “Zhongguo duanqi nei jiaru Meiguo zhudao de TPP tanpan
kenengxing buda” (The Possibility is Low that China will Join the TPP Negotiations Led by the
U.S.), June 7, 2013, The Xinhua Net,
http://news.xinhuanet.com/world/2013–;06/07/c_116076208.htm.
51 Ding Gang, “Zhongguo ying jinkuai jiaru TPP tanpan”; Wang Li, “TPP tanpan, Zhongguo
yaoduo zhudaoquan” (China Should Compete for the Leading Role of the TPP Negotiations),
Huanqiu shibao, November 7, 2011, p. 15; Wang Zhile, “TPP Can Benefit China,” China Daily,
June 24, 2013, p. 8.
52 “Li Keqiang goule Zhongguo Dongmeng ‘zhuanshi’ shinian, dazao shengjiban” (Li Keqiang
Outlines the “Diamond Decade” between China and ASEAN”; Producing an Updated Version),
September 3, 2013, China News Agency, www.chinanews.com/gn/2013/09-04/5241294.shtml.
53 Manyin et al., “Pivot to the Pacific?” p. 9; Swaine, “Chinese Leadership and Elite Responses to
the U.S. Pacific Pivot,” p. 16, note 1.
54 Transcript of “The Transatlantic Partnership: A Statesman’s Forum with Secretary of State
Hillary Clinton,” November 29, 2012, The Brookings Institution, Washington, D.C., p. 10.
55 Robert Kagan, “United States Can’t Pivot away from the Middle East,” The Washington Post,
November 20, 2012, http://articles.washingtonpost.com/2012-11-
20/opinions/35510489_1_obama-administration-middle-east-obama-campaign.
56 U.S. Department of State, Sustaining U.S. Global Leadership: Priorities for 21st Century
Defense, January 2012, p. 2, www.defense.gov/news/defense_strategic_guidance.pdf.
57 Wang Jisi, “Zhongmei jiegouxing maodun shangsheng, zhanlue jiaoliang nanyi bimian” (China-
U.S. Structural Contradictions on the Rise, and Strategic Confrontations Hard to Avoid),
International and Strategic Report, Center for International and Strategic Studies, Peking
University, No. 47, July 23, 2010.
58 Yuan Peng, “Jiegouxing maodun yu zhaoluexing jiaolv: Zhong Mei guanxi de zhongda fengxian
jiqi pojie zhidao” (Structural Contradictions and Strategic Anxiety: The Significant Risks in
U.S.-China Relations and Its Solutions), China International Strategy Review 2001, Beijing:
Shijie zhishi chubanshe, 2011, pp. 99–105.
59 Ye Yu, “Wang Zyizhou: yingdui tiaozhan, Zhongguo yao xiahao ‘xianshouqi’ ”.
60 Wang Fan, “Meiguo de dongya zhanlue yu duihua zhanlue” (U.S. East Asia Strategy and China
Strategy), in Qu Xing, ed., Houweiji shiqi guoji geju yanbian yu Zhongguo de heping fazhan
huanjing (The Evolution in the International Structure and China’s Environment of Peaceful
Development in the Post-Crisis Period), Beijing: Shishi chubanshe, 2011, pp. 266–277; Wang
Fan, “Zhong Mei bushi zhanlue duishou” (China and the United States are Not Strategic
Rivals), Huanqiu shibao, June 27, 2011, p. 14.
61 Yuan Zheng et al., “Ao’bama zhengfu duiwai zhanlue de tiaozheng ji dui woguo de yingxiang,”
p. 199.
62 Sun Xuefeng, “Zhongguo ying zhuazhu Meiguo chongfan yazhou de jiyu” (China Should Seize
the Opportunity of U.S. Returning to Asia), Dongfang zaobao (Oriental Morning Post),
December 16, 2010, p. A12.
63 “Jiejue nanhai wenti ruo kaoda, zhoubian jushi fan xianru hunluan,” Nanfang ribao, p. A04.
64 Ding Gang et al., “Yatai geju, fengwu changyi fangyan liang: pingxi Meiguo chongfan yatai
zhanlue” (Range Far Your Eye for Long Vistas when It Comes to International Structure in the
Asia Pacific: Comments and Analysis of U.S. Strategy of Returning to Asia), The People’s
Daily, December 23, 2011.
65 Wang Jisi, “ ‘Marching Westwards’: The Rebalancing of China’s Geostrategy,” International and
Strategic Studies Report, Center for International and Strategic Studies, Peking University, No.
73, October 7, 2012; Wang Jisi, “Xijing: Zhongguo diyuan zhanlue de zaipingheng,” Huanqiu
shibao, October 17, 2012, http://opinion.huanqiu.com/opinion_world/2012-10/3193760.html.
66 Sun Yun, “March West: China’s Response to the U.S. Rebalancing,” January 31, 2013, The
Brookings Institution, www.brookings.edu/blogs/up-front/posts/2013/01/31-china-us-sun?
rssid=china&;utm_source=feedburner&;utm_medium=feed&;utm_campaign=Feed%3A+Brook
ingsRSS%2Fcenters%2Fchina+(Brookings+Centers+-+John+L.+Thornton+China+Center). For
a view that disputes Wang’s argument, see Rear Admiral Yang Yi, “Zhoubian anquan xuyao
quanfangwei zhanlue: jianyu Wang Jisi jiaoshou shangque” (China’s Security on the Periphery
Needs an All-around Strategy: In Response to Professor Wang Jisi), Huanqiu shibao, October
26, 2012, http://mil.huanqiu.com/observation/2012-10/3217416.html.
67 James B. Steinberg, “2012–A Watershed Year for East Asia?” Asia Policy, No. 14 (July 2012), p.
24.
68 Dai Bingguo, “We Must Stick to the Path of Peaceful Development,” December 6, 2010,
www.fmprc.gov.cn/eng/topics/cpop/t777704.htm; Dai Bingguo, “Stick to the Path of Peaceful
Development,” China Daily, December 13, 2010, www.chinadaily.com.cn/opinion/2010-
12/13/content_11690133.htm; Dai Bingguo, “Stick to the Path of Peaceful Development: Why
China has Chosen the Path of Peaceful Development?” Beijing Review, No. 51, December 23,
2010, www.bjreview.com.cn/quotes/txt/2010-12/27/content_320120.htm.
69 The Information Office of the State Council, China’s Peaceful Development, September 2011,
China, www.gov.cn/english/official/2011-09/06/content_1941354.htm.
70 “China Is Committed to the Path of Peaceful Development,” Remarks by Dai Bingguo at the
Symposium on China’s Peaceful Development White Paper, September 15, 2011,
www.fmprc.gov.cn/eng/zxxx/t860218.htm; “Dai Bingguo Publishes Signed Articles in French
and British Media Elaborating China’s Peaceful Development,” September 25, 2011,
www.mfa.gov.cn/eng/topics/daibingguo_uk/t863090.htm; Dai Bingguo, “China Chooses a
Peaceful Path,” The Sunday Telegraph, September 24, 2011,
www.telegraph.co.uk/news/worldnews/asia/china/8786934/Commentary-China-chooses-a-
peaceful-path.html.
71 “A Better Future through Security Cooperation,” Remarks by Gen. Liang Guanglie at the 2011
Shangri-La Dialogue (SLD), June 5, 2011, Singapore; Author’s notes of Gen. Liang Guanglie’s
remarks, the 2011 SLD, June 5, 2011, Singapore.
72 “The Rapid Development of China’s Diplomacy in a Volatile World,” Address by Assistant
Foreign Minister Le Yucheng at the Seminar on China’s Diplomacy in 2011 and Its Prospects,
December 27, 2011, www.fmprc.gov.cn/eng/zxxx/t890675.htm.
73 “Views from China’s Vice President,” Vice President Xi Jinping’s Written Interview with the
Washington Post, The Washington Post, February 12, 2012,
http://articles.washingtonpost.com/2012-02-12/world/35445241_1_amchamchina-mutual-
benefit-chinese-products/2; “Xi Jinping Accepts a Written Interview with the Washington Post
of the United States,” February 13, 2012, www.fmprc.gov.cn/eng/zxxx/t904674.htm.
74 “Xi, Obama Meet for First Summit,” Xinhuanet, June 8, 2013,
http://news.xinhuanet.com/english/china/2013-06/08/c_132440860.htm. For a post-Summit
assessment, see Wang Dong, “The Xi-Obama Moment: A Post-Summit Assessment,” The
National Bureau of Asian Research (NBR) Commentary, October 21, 2013, pp. 1–3.
75 Wang Dong, “Addressing the U.S.-China Security Dilemma,” Carnegie Endowment for
International Peace, January 17, 2013, http://carnegieendowment.org/2013/01/17/addressing-
u.s.-china-security-dilemma/f2rv.
76 Wang, “The Xi-Obama Moment: A Post-Summit Assessment”; Graham Allison, “Superpower
and Upstart: Sometimes It Ends Well,” The New York Times, January 22, 2011.
77 Remarks by U.S. Secretary of State Hillary Rodham Clinton at the U.S. Institute of Peace China
Conference, U.S. Institute of Peace, Washington, D.C., March 7, 2012,
www.state.gov/secretary/rm/2012/03/185402.htm.
78 Robert S. Ross, “The Problem with the Pivot,” Foreign Affairs, November/December 2012, Vol.
91, No. 6, pp. 70–82; Author’s interviews with U.S. think tank experts, November 2012,
Washington, D.C.
79 Author’s interviews with senior U.S. officials, November 2012, Washington, D.C.
80 Remarks by Thomas Donilon, National Security Advisor to the President, “The United States
and the Asia Pacific in 2013,” The Asia Society, New York, March 11, 2013,
www.whitehouse.gov/the-press-office/2013/03/11/remarks-tom-donilon-national-security-
advisory-president-united-states-a.
81 Press briefing by National Security Advisor Thomas Donilon, June 8, 2013,
www.whitehouse.gov/the-press-office/2013/06/08/press-briefing-national-security-advisor-tom-
donilon.
82 Remarks as prepared for delivery by National Security Advisor Susan E. Rice on “America’s
Future in Asia,” November 20, 2013, Washington, D.C., www.white-house.gov/the-press-
office/2013/11/21/remarks-prepared-delivery-national-security-advisor-susan-e-rice.
5 China’s rising power and the
U.S. rebalance to Asia
Implications for U.S.–China relations
Phillip C. Saunders1

Upon taking office in January 2009, Obama administration officials

proclaimed a U.S. “return to Asia.” This pronouncement was backed with
more frequent travel to the region by senior officials (Secretary of State
Hillary Clinton’s first trip was to Asia) and increased U.S. participation in
regional multilateral meetings, culminating in the decision to sign the
Association of Southeast Asian Nations (ASEAN) Treaty of Amity and
Cooperation and to participate in the East Asian Summit at the head of state
level. The strategic “rebalance to Asia” announced in November 2011 builds
on these earlier actions to deepen and institutionalize U.S. commitment to
the Asia-Pacific region.
Asia’s rapid growth and economic dynamism have greatly expanded the
region’s economic and strategic weight, elevating its importance for U.S.
interests and demanding an increased U.S. focus. This evolution has been
welcomed by America’s Asia specialists, who have long advocated greater
investment of resources and attention from high-level U.S. policymakers.2
At a time of often bitter partisanship in the United States, there is broad,
bipartisan consensus on Asia’s importance. Indeed, partisan criticism has
focused primarily on whether the administration in power is doing enough to
increase U.S. engagement in Asia and whether rhetorical commitment is
backed with sufficient resources.3
 While some initial comments about the U.S. “return to Asia” were cast in
terms of correcting alleged neglect of the region by the administration of
George W. Bush, senior Obama administration officials believed that the war
on terror and U.S. military commitments in Iraq and Afghanistan had
produced an imbalanced global footprint. The United States was
overweighted in the Middle East and underweighted in the Asia-Pacific.4
The phrase “rebalance to Asia” was intended to highlight the region’s
heightened priority within U.S. global policy. (The term “pivot to Asia”
initially used by some officials also suggested the transfer of resources and
strategic attention from the Middle East and Europe to Asia.)
The rebalance to Asia also reflected the need to articulate U.S. global
priorities in the wake of the withdrawal of American troops from Iraq and
the draw-down in Afghanistan, freeing diplomatic and military resources that
had been committed to the Middle East for the last decade. Anticipated
reductions in U.S. Federal spending and military budgets also called for a
clear statement of strategic priorities to guide cuts and reallocate limited
resources. For the U.S. military, this came in the form of the January 2012
Defense Strategic Guidance signed by President Barack Obama, which
declared “we will of necessity rebalance toward the Asia-Pacific region.”5
The term “rebalance” is not derived from “balance of power” thinking and
does not signal U.S. intent to balance against China or any other country.
Rather, the underlying logic is derived from the allocation of assets in a
financial portfolio. As market conditions shift and new opportunities emerge,
a portfolio is rebalanced to maximize return on investment. In this sense, the
rebalance to Asia is intended to bring commitments of U.S. global
diplomatic, economic, and military resources into balance with expanding
U.S. political, economic, and security interests in Asia.
One of the clearest articulations of the rationale and strategic logic behind
the rebalance is a November 2011 Foreign Policy article by Secretary of
State Hillary Clinton.6 In the context of withdrawal from Iraq and
Afghanistan, she argued that the United States needs “to be smart and
systematic about where we invest time and energy, so that we put ourselves
in the best position to sustain our leadership, secure our interests, and
advance our values.” The Secretary described the Asia-Pacific region’s
importance as “a key driver of global politics” that spans the Pacific and
Indian oceans, boasts half the world’s population, includes key engines of
the global economy, and is home to several key U.S. allies and “important
emerging powers like China, India, and Indonesia.” She argued that
“harnessing Asia’s growth and dynamism is central to American economic
and strategic interests” and that the United States has an opportunity to help
build “a more mature security and economic architecture to promote stability
and prosperity.” Given the importance of the Asia-Pacific region to
America’s future, “a strategic turn to the region fits logically into our overall
global effort to secure and sustain America’s global leadership.” She drew an
explicit parallel with U.S. efforts after World War II to build a
“comprehensive and lasting transatlantic network of institutions and
relations.”
In the article, Secretary Clinton called for “smart execution of a coherent
regional strategy that accounts for the global implications of our choices”
and a sustained U.S. commitment to “forward-deployed” diplomacy in the
Asia-Pacific. She outlined six key lines of action to implement the strategy:

1 Strengthening bilateral security alliances;

2 Deepening our working relationship with emerging powers, including
with China;
3 Engaging with regional multilateral institutions;
4 Expanding trade and investment;
5 Forging a broad-based military presence that modernizes traditional
basing arrangements in Northeast Asia while enhancing the U.S.
presence in Southeast Asia and into the Indian Ocean;
6 Advancing democracy and human rights.

A coherent regional strategy, as Secretary Clinton and other administration

officials have noted in public and private remarks, requires greater
integration of U.S. diplomatic, economic, and military actions across the
region to maximize their individual and collective impact. One area where
the Obama administration’s approach differs from past U.S. policy is in its
strong emphasis on the economic, transport, and strategic linkages between
the Indian Ocean and Pacific region.7
The Foreign Policy article not only explicates the strategic logic of the
U.S. rebalance to Asia, but also reflects a midcourse correction based on the
Obama administration’s experience implementing its Asia policy. Early Asia
policy speeches stressed three elements: sustaining and strengthening
bilateral ties with allies and partners; building a new era of cooperation with
emerging Asian powers China and India; and building multilateral structures
in the Asia-Pacific that facilitate regional and global cooperation.8 U.S.
officials acknowledged a tension between couching China policy within an
activist Asia policy focused on U.S. allies and partners (“getting China right
requires getting the region right”) and engaging China as a global actor in its
own right.9
Obama administration officials devoted significant early efforts to
broadening and deepening U.S.–China relations to better address regional
and global challenges. Although the political need to rebrand policy
precluded the use of the Bush administration’s “responsible stakeholder”
language, the administration’s view of China as a rising power, with
expanding global interests, that was succeeding within the existing
international system was very similar. Administration officials sought to
engage China in cooperation on regional and global issues, including efforts
to deal with North Korean and Iranian nuclear ambitions, address climate
change, and mitigate the impact of the global financial crisis. Their
expressed goal was a “positive, cooperative, and comprehensive
relationship” with China that allowed the two countries to work together on
an expanded set of common interests.
One of the instruments used to build this relationship was broadening the
bilateral U.S.–China Strategic and Economic Dialogue (S&ED) to address a
wider range of issues, improve U.S. policy coordination, and bring the right
actors to the table. Other mechanisms included holding regular meetings and
communications at the Presidential level, highlighting areas of cooperation
and praising positive Chinese contributions, encouraging a greater Chinese
role in global governance, seeking continuity in military–military relations to
help avoid crises and increase cooperation, and trying to avoid embarrassing
The Chinese leadership when taking actions such as meeting with the Dalai
Lama or arms sales to Taiwan.
These efforts to build a deeper partnership with China produced relatively
meager results. Despite formal engagements through the S&ED, reciprocal
summit visits, and periodic meetings on the margins of multilateral forums,
Chinese leaders remained suspicious and reluctant to expand cooperation
with Washington or take on more international responsibilities. For many
Obama administration officials, integrating China more fully in international
institutions was a means of giving Beijing a greater voice and spurring
Chinese leaders to make more international contributions. A more prominent
Chinese role could strengthen both the legitimacy and potential effectiveness
of international institutions, albeit at the cost of reduced U.S. dominance. In
this sense, U.S. endorsement of greater Chinese representation was a signal
of trust and confidence.
Chinese leaders, however, viewed enhanced multilateral cooperation as an
effort to sustain a U.S.-dominated global order and to lock China into
binding commitments on issues such as carbon emissions and a revalued
currency in ways that might hinder future Chinese growth. While Beijing
now participates in most major international and regional organizations,
Chinese leaders tend to view these as vehicles for pursuing or defending
Chinese national interests and remain wary of taking on international “costs,
risks, and commitments.”10 Chinese scholars spoke of “China responsibility
theory” as a Western plot to blame China for global economic problems and
to force it to take on international commitments beyond its limited
capacity.11 Moreover, in the context of the unfolding financial crisis that
damaged the U.S. (and then the global) economy, Chinese leaders may have
initially misinterpreted Obama administration efforts to increase cooperation
as a sign of U.S. weakness and an opportunity to press Washington for
concessions. The net result was intensified bilateral engagement, but one
characterized by lots of process and relatively few tangible results.
The period 2009–2010 also saw a more assertive Chinese posture on a
wide range of bilateral, regional, and global issues.12 From 1998 to 2008,
China achieved remarkable success in improving relations with its neighbors
in Asia through a combination of economic cooperation, diplomatic
outreach, and military restraint (even as it continued to increase its military
budget and modernize its forces). Within the space of 18 months, Chinese
bullying, assertiveness, and apparent lack of concern for Asian and
international reactions undid most of these gains. In particular, efforts to
advance Chinese maritime sovereignty claims in the South China Sea and
East China Sea did considerable damage to Beijing’s efforts to persuade
others of China’s peaceful rise. The May 2009 deadline for submissions to
the United Nations Convention on the Law of the Sea (UNCLOS) spurred
many countries to reinforce their claims to disputed islands and waters.
Sometimes China initiated contentious actions, such as increased patrolling
in disputed waters; other times Chinese nationalists clamored loudly for
strong reactions to actions by countries such as Vietnam, the Philippines, and
Japan that challenged Chinese sovereignty claims. Beijing employed
economic coercion in some sovereignty disputes, including a temporary ban
on exports of rare earths to Japan and import restrictions on Philippine
bananas.13 China also took a tough line on its interpretation of military
activities permitted in its exclusive economic zone, acting to interfere with
U.S. ships and aircraft (such as the March 2009 incident off Hainan Island
when Chinese paramilitary vessels attempted to snag the towed sonar array
of the USNS Impeccable).14
For a U.S. administration emphasizing the importance of unimpeded
access to the “global commons” for economic growth, Beijing’s actions in
the South China Sea represented a clear threat to freedom of navigation. For
China’s neighbors, Beijing’s assertive actions raised concerns about whether
Chinese restraint would disappear as its military capabilities improved and
its economic and diplomatic power increased relative to the United States.
These concerns found political expression in the July 2010 ASEAN
Regional Forum (ARF) meeting, when 11 states joined Secretary Clinton in
expressing concerns about freedom of navigation in the South China Sea,
despite the best efforts of Chinese diplomats to discourage them from raising
the issue. Chinese Foreign Minister Yang Jiechi gave an angry speech during
the meeting in which he wagged his finger at the Singapore representative
and pointedly stated that “China is a big country and other countries are
small countries, and that’s just a fact.”15 Public and private pleas from
countries in East and Southeast Asia urged the United States to take a more
active role in Asian security, including speaking out against efforts to use
threats and intimidation in territorial disputes. Countries also expressed a
willingness to engage in deeper security cooperation with the United States
via participation in bilateral and multilateral exercises and by providing base
and port access to U.S. forces for common security goals.
This political context—heightened concerns about Chinese behavior and
regional demands for a stepped up U.S. security role—is also a significant
part of the political rationale for the U.S. strategic rebalance to Asia.
However, this does not mean that the United States has abandoned efforts to
cooperate with China or to build a more stable Sino–U.S. relationship. The
broad U.S. strategy of seeking to integrate China more fully within the
current global order, while discouraging any efforts to reshape that order by
the use of force, remains in place. A key implementation challenge is making
the rebalance robust enough to reassure U.S. allies and partners of its
capability and will to maintain a presence in Asia over the long term while
not alarming Chinese leaders to the point where they forego cooperation
with Washington in favor of a more confrontational approach. Finding and
maintaining this sweet spot in U.S. policy poses a difficult challenge.

Implementation of the U.S. strategic rebalance

A common element in explications of the rebalance by U.S. officials is that it
encompasses diplomatic, economic, and military elements, all of which must
be applied in a coordinated manner for maximum effect. Because of the
considerable continuity between the “return to Asia” and the “strategic
rebalance to the Asia-Pacific,” this chapter assesses U.S. diplomatic,
economic, and military efforts from the beginning of the Obama
administration.

Diplomatic engagement
Perhaps the clearest success lies on the diplomatic front. The administration
proclaimed the importance of enhancing high-level diplomatic engagement
in the Asia-Pacific, and it has delivered on that promise. President Barack
Obama visited Asia five times in his first four years in office, with visits to
ten Asia-Pacific countries (including China) and participation in the Asia-
Pacific Economic Cooperation and East Asian summits.16 Secretary Clinton
visited Asia 14 times during her tenure in office, traveling to all of the
ASEAN member states and regularly participating in key regional meetings.
U.S. Secretaries of Defense Robert Gates and Leon Panetta traveled to Asia
13 times during President Obama’s first term in office. National Security
Advisor Tom Donilon, Chairmen of the Joint Chiefs of Staff Admiral
Michael Mullen and General Martin Dempsey, and several chiefs of the U.S.
military Services also traveled regularly to Asia-Pacific countries, including
China. This level of travel to the Asia-Pacific by senior Obama
administration officials was significantly more than that of the first
administration of George W. Bush. The number of trips was similar to the
second Bush administration but with more time spent in the region by
Secretary Clinton, many more trips and much more time spent in the region
by Secretaries of Defense Gates and Panetta, and a greater emphasis on
participation in regional multilateral meetings.17
This list of travel by senior administration officials does not include those
with specific responsibilities for the Asia-Pacific region, such as U.S. Pacific
Command commanders Admiral Robert F. Willard and Admiral Samuel J.
Locklear, Assistant Secretary of State Kurt Campbell, and Assistant
Secretary of Defense for Asia-Pacific Security Affairs Mark Lippert. Given
that the scarcest resource in government is high-level attention, the Obama
administration amply demonstrated the heightened priority of the Asia-
Pacific region. Moreover, the administration delivered on its commitment to
expand U.S. involvement in regional institutions by signing the ASEAN
Treaty of Amity and Cooperation and by participating in the East Asia
Summit.18 Concurrently, U.S. officials also demonstrated their ability to
mobilize regional opinion, most notably in effective U.S. bilateral and
multilateral diplomacy before and during the July 2010 ARF meeting.

Economic engagement
Asia’s economic dynamism and rapid economic growth are important to the
well-being of almost all countries in the region, and therefore to the stability
and legitimacy of their governments. Asia’s booming market is also
important to the United States, whose economy is still recovering from
recession. Fulfilling President Obama’s commitment to double U.S. exports
between 2010 and 2015 requires greater access to Asian markets. Enhanced
economic engagement is therefore a critical element of the U.S. rebalance.
American allies and partners in the region have advocated enhanced U.S.
economic engagement with Asia as a key means of demonstrating U.S.
staying power. The Obama administration has faced a number of obstacles in
increasing trade and investment ties with Asia. In addition to the demands
placed on senior economic officials by the global financial crisis, these
obstacles include the loss of U.S. jobs in the manufacturing sector, criticism
of China’s undervalued cur-rency, concern about labor conditions and
environmental pollution in Asia, and the current lack of trade negotiating
authority (that is, Trade Promotion Authority, formerly called “fast track”).
Trade expansion is always a difficult issue for Democratic Presidents whose
coalition includes significant support from labor unions and other groups
seeking protection from what they view as “unfair” competition. Moreover,
in the U.S. system most economic activity is performed by the private sector;
attracting more U.S. trade and investment requires Asian governments to
speed up the pace of domestic economic reform, which is often politically
difficult.
What the U.S. Government can do is enter into bilateral and regional
economic agreements with Asia-Pacific countries that facilitate trade and
investment. The Obama administration succeeded in securing congressional
approval of the Korea–U.S. Free Trade Agreement (“KORUS”), the most
significant agreement of its kind since the North American Free Trade
Agreement. Several other bilateral trade agreements dating from the Bush
administration were also approved.
The centerpiece of the administration’s regional trade efforts is the Trans-
Pacific Partnership (TPP), described as “an ambitious, next-generation Asia-
Pacific trade agreement that reflects U.S. economic priorities and values.”
The TPP is intended to be a “high-quality” trade agreement that sets high
standards for environmental and labor regulations, protection of intellectual
property, financial services, government procurement, and competition
policy. As of September 2014, 12 countries are participating in TPP
negotiations (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam).
TPP is an example of “open regionalism,” meaning that other Asia-Pacific
countries willing to meet TPP standards will eventually be able to join the
agreement.19
The empirical record indicates some success for the Obama
administration’s efforts to enhance U.S. trade, aid, and investment ties with
the Asia-Pacific region. Tables 5.1 and 5.2 show that despite the economic
headwinds caused by the global financial crisis, U.S. exports and overall
trade with Asia-Pacific countries increased from 2008 to 2012, and the Asia-
Pacific region’s share in U.S. exports and overall trade also increased. When
compared with China’s trade with the region, the 2012 data indicate that the
United States is still an extremely important market for Asian countries
(including China). Moreover, despite China’s nominal status as the number
one market for countries such as Japan and South Korea, a significant
percentage of Asian exports to China are components for assembly and re-
export to North American, European, and other third-country markets.
Similarly, data for the U.S. direct investment stock in Asia-Pacific
countries (Table 5.3) shows an increase from $477 billion in 2008 to $646
billion in 2012, an overall increase of almost $169 billion over a four-year
period. This compares with a total 2012 stock of Chinese investment in the
Asia-Pacific of about $351 billion, of which $306 billion is invested in Hong
Kong. (Some of this Chinese investment has stayed in Hong Kong; some has
returned to China disguised as “foreign” investment; and some is invested
elsewhere in Asia.)20
Table 5.1 U.S. and Chinese 2008 trade with Asia-Pacific countries (US$ million)

Table 5.2 U.S. and Chinese 2012 trade with Asia-Pacific countries (US$ million)
Table 5.3 U.S. direct investment stock in Asia-Pacific (US$ million)
2008 2012
NE Asia 234,248 284,704
SE Asia 223,945 332,287
SW Asia* 19,189 29,078
All Asia-Pacific* 477,382 646,069
TOTAL 3,232,493 4,453,307
% to Asia 14.8% 14.5%
Source: U.S. Direct Investment Abroad: www.bea.gov/international/di1usdbal.htm.
Note
* Does not include Afghanistan.

During the 2008–2011 period, U.S. foreign aid to Asia-Pacific countries

increased from $1.69 billion to $2.83 billion (not counting an additional $2.7
billion in aid to Afghanistan in 2011). The Asia-Pacific’s share in USAID
disbursements increased from 6.4 percent in 2008 to 9.1 percent in 2011,
with a shift toward Southeast and Southwest Asia.21 Although most of this
trade, investment, and aid data predate the formal announcement of the U.S.
strategic rebalance, the numbers indicate that efforts to increase U.S.
economic ties with the Asia-Pacific region have paid dividends.

Security engagement
Although much of the analysis of the military side of the U.S. rebalance to
Asia has focused on changes to deployments of U.S. forces within the Asia-
Pacific region, the rebalance also includes enhanced efforts to develop new
capabilities to maintain access to the region. These include targeted
initiatives to defeat “anti-access/area denial capabilities” and increased
emphasis on cyber-defense and the ability to sustain operations in a
competitive space environment. Military cuts focused on reducing ground
forces while seeking to minimize cuts in naval capabilities and to devote
more attention to the Indian Ocean as a strategic area linked to U.S. interests
in East Asia.22
In terms of deployments of U.S. forces, the goal is a stronger U.S. military
presence in Asia that is “geographically distributed, operationally resilient,
and politically sustainable.”23 This presence includes shifting of some of the
most advanced U.S. air and naval assets to the Asia-Pacific region or to U.S.
bases on the West Coast, in Hawaii, or on the territory of Guam (see Table
5.4). Within the Asia-Pacific region, there is less emphasis on permanent
bases, and more emphasis on access agreements and rotational deployments
that will allow the United States military to conduct exercises and operations
that demonstrate U.S. commitment to the region and help protect security of
U.S. allies and partners. Table 5.5 draws upon statements by U.S. officials to
illustrate several military dimensions of the rebalance.
Table 5.4 U.S. military rebalance to Asia by service
Army “The Army itself plans to align 70,000 troops to the Asia Pacific region as part of its new
general regional alignment, which heavily weights the Asia-Pacific region” (Carter).
Navy “We are moving more of our Navy to the Pacific Ocean than to the Atlantic Ocean, so that
in a few years, in fact it will be 60/40 and it will probably go further” (Carter).
Marines “The Marine Corps will have up to 2,500 Marines on rotation in Australia” (Carter).
“About 9,000 Marines will relocate from Okinawa, with about 5,000 moving to Guam and
the rest transferring to other locations in the Pacific such as Hawaii and Australia”
(Parrish).
Air “The U.S. Air Force has allocated 60 percent of its overseas-based forces to the Asia-
Force Pacific—including tactical aircraft and bomber forces from the continental United States.
The Air Force is focusing a similar percentage of its space and cyber capabilities on this
region. … [T]his region will see more of these capabilities as we prioritize deployments of
our most advanced platforms to the Pacific, including the F-22 Raptor and F-35 Joint
Strike Fighter deployments to Japan” (Hagel).
Sources: See Table 5.5.

In terms of implementing the security aspects of the rebalance, the U.S.

Pacific Command conducts a robust exercise and engagement program
focused on “maintaining a credible defense posture, strengthening
relationships with our allies, expanding our partner networks, and preparing
to accomplish the full range of military contingencies.”24 This includes 18
major exercises involving joint military forces, interagency activities, and 30
partner nations. U.S. military forces also participate in more than 150 service
exercises in the Asia-Pacific region annually. The United States has worked
to reinvigorate and modernize relations with its treaty allies in the region
(including increased emphasis on the Philippines and Thailand), while also
expanding military engagement with India, Indonesia, Vietnam, Singapore,
Malaysia, Brunei, and other partners.25 These efforts are supported by efforts
to shift U.S. military capacity and investments towards the Asia-Pacific
region, include air and ground capabilities, special operations forces, and
intelligence, surveillance, and reconnaissance assets. The U.S. Navy will
also base a fourth attack submarine in Guam in 2015 and shift six destroyers
from Europe to the Asia-Pacific, part of efforts to increase the U.S. naval
presence in the Pacific from 52 to 62 ships by 2020.26
Taken as a whole, these diplomatic, economic, and military measures
demonstrate a significant increase in U.S. strategic attention to the Asia-
Pacific region, which has been matched by significant commitments of
resources. The rebalance has not addressed all concerns of U.S. allies and
partners, with the issue of increased Chinese assertiveness on maritime
territorial disputes being a key concern for Japan and for Southeast Asian
states who are parties to the disputes with China in the East China Sea or the
South China Sea.27 Nevertheless, the rebalance has played an important role
in reassuring countries that the United States has the ability and will to fulfill
its commitments in the Asia-Pacific region for decades to come.
Table 5.5 U.S. military rebalance to Asia by partner
Australia Rotational deployments of 2,500 Marines; expanded cooperation on cyber security and
space situational awareness; agreement to deploy an Australian warship in a U.S. carrier
strike group (Hagel).
China Positive military-to-military developments include the “first-ever joint counter-piracy
exercise in the Gulf of Aden … U.S. invitation for China to participate in RIMPAC …
[and an] agreement to cohost a Pacific Army Chiefs Conference with China” (Hagel).
India “We’re deepening our security cooperation, technology sharing and defense trade with
India” (Carter).
Indonesia “Working together on humanitarian assistance and disaster response preparedness,
maritime security, international peacekeeping, and combating transnational threats”
(Hagel).
Japan “Over the past year, we reached major agreements with Japan to realign our forces and
jointly develop Guam as a strategic hub . . . locating our most advanced aircraft in the
Pacific, including new deployments of F-22s and the MV-22 Ospreys to Japan, and
laying the groundwork for the first overseas deployment of the F-35 Joint Strike Fighter
to Iwakuni in 2017” (Panetta).
Malaysia “We are expanding maritime cooperation, including the first-ever visit of a U.S. aircraft
carrier to Sabah” (Hagel).
Myanmar “We are beginning targeted, carefully calibrated military-to-military engagement aimed
at ensuring the military supports ongoing reforms, respects human rights, and a
professional force accountable to the country’s leadership” (Hagel).
New “The signing of the Washington Declaration and associated policy changes have opened
Zealand up new avenues for defense cooperation in areas such as maritime security cooperation,
humanitarian assistance and disaster relief” (Hagel).
Philippines “With the Philippines, we’re exploring options for rotational force deployments in
priority areas. We are focused on building the Philippines maritime security presence
and capabilities, and strengthening their maritime domain awareness” (Carter).
Singapore “We will have four Littoral Combat Ships stationed forward in Singapore” (Carter).
South “Strengthen cooperation with the Republic of Korea in space, in cyberspace, in
Korea intelligence” (Panetta).
Thailand Joint Vision Statement for alliance, “the first such bilateral document in over 50 years”
(Hagel).
Vietnam “We are expanding our cooperation—as set forth in a new memorandum of
understanding—in maritime security, training opportunities, search-and-rescue,
peacekeeping, military medical exchanges, and humanitarian assistance and disaster
relief” (Hagel).
Sources: Ashton B. Carter, “Remarks by Deputy Secretary Carter at the Von der Heyden Fellows
Program Endowment Fund Lecture Series at Duke University,” Durham, NC, November 29, 2012;
Ashton B. Carter, “Remarks by Deputy Secretary of Defense Carter at the Woodrow Wilson Center,”
Washington, D.C., October 3, 2012; Chuck Hagel, Speech at the International Institute for Strategic
Studies (Shangri-La Dialogue), Singapore, June 1, 2013; Leon Panetta, “Remarks by Secretary Panetta
at the National Press Club, Washington, D.C., December 18, 2012; Karen Parrish, “U.S., Japan Agree
on Okinawa Troop Relocation,” American Forces Press Service, April 27, 2012.

China’s perceptions of the U.S. rebalance

U.S. officials have used many of the mechanisms discussed above to explain
its new regional strategy to Beijing. These issues have been discussed
bilaterally at summits, through the annual S&ED (which includes Chinese
military representatives and a new Strategic Security Dialogue to discuss
issues such as nuclear, space, cyber, and maritime security), by reciprocal
bilateral visits by senior officials including the Secretary of Defense,
Secretary of State, and National Security Advisor, and through regular
security dialogues such as the Defense Consultative Talks (at the
Undersecretary of Defense level), Defense Policy Consultative Talks (at the
Deputy Assistant Secretary of Defense level), and at the working level
through the Military Maritime Consultative Agreement.
Increased U.S. engagement in multilateral meetings such as the East Asian
Summit, ARF summit, ARF Defense Ministers Meeting, and unofficial
meetings such as the Shangri-la dialogue in Singapore also provide frequent
opportunities for senior U.S. officials to meet Chinese officials and senior
People’s Liberation Army officers. These efforts are supplemented by formal
U.S.–China military– military ties (which have become somewhat less
susceptible to interruptions due to policy disagreements) and informal
interactions on a range of security issues (including nuclear, space, cyber,
and maritime security issues) in a variety of unofficial track 2 and semi-
official track 1.5 settings.28
U.S. officials have had ample opportunity to explain the U.S. regional
strategy to their Chinese counterparts. The explanations offered in these
meetings paralleled the public strategic rationale discussed above, namely
that the U.S. rebalance is based on pursuing expanding U.S. interests in Asia
as military engagement in the Middle East winds down; that it involves a
comprehensive diplomatic, economic, and military approach; that the timing
was dictated largely by the need to offer a clear statement of priorities to
guide force development in an era of declining spending; and that demand
by U.S. allies and partners for an increased U.S. security commitment to the
region played an important role in shaping the rebalance.
U.S. officials have been careful to stress that the rebalance is not “all
about China,” intended to contain China, or seeking to build an anti-China
coalition. However, they have noted that lack of transparency about Chinese
military capabilities and strategic intentions, and the more assertive Chinese
behavior discussed above, have heightened U.S. and regional concerns. U.S.
officials have also complained about intrusions into U.S. Government and
defense contractor computer systems, “some of which appear to be
attributable directly to the Chinese government and military.”29 The United
States has sought to expand the scope and depth of U.S.–China military
cooperation, including through regular high-level visits, exchanges of
student delegations, counterpiracy and humanitarian affairs and disaster
relief (HA/DR) exercises, an invitation for China to participate in the 2014
RIMPAC exercise, and an agreement to co-host a Pacific Army Chiefs
Conference.
U.S. understanding of China’s perceptions of the rebalance is based on a
variety of sources and interactions. These include official Chinese policy
statements, Chinese statements in formal meetings between senior U.S. and
Chinese civilian and military officials, authoritative commentary in the
Chinese media, unofficial interactions with Chinese officials, military
officers, and scholars in “track 2” and “track 1.5” meetings, analysis of
writings by Chinese commentators in newspapers and academic journals,
and inferences from changes in Chinese behavior.30
 Broadly speaking, the official Chinese reaction has been to express
concern and skepticism about the stated U.S. rationale for the rebalance to
Asia, lament the “lack of strategic trust” between Washington and Beijing,
urge greater respect for Chinese “core interests,” stress negative
consequences of the rebalance for Asian security (especially its supposed
role in emboldening U.S. allies and partners to challenge Chinese maritime
territorial claims), and redouble efforts to stabilize Sino-U.S. relations, most
notably through efforts to build a “new type of great power relations” with
Washington. Despite significant concerns about the impact of the U.S.
rebalance on Chinese interests, enhanced efforts to build a stable partnership
with Washington have arguably been the most important element of China’s
response. In its regional policy, Beijing appears to be balancing two partially
incompatible goals: maintaining a stable regional security environment
(which requires efforts to reassure its neighbors) and making progress on
strengthening its control over disputed maritime territories (which
aggravates relations with other claimants).31
However, in the Chinese narrative, Beijing has not changed its foreign
policy goals, expanded its territorial claims, or adopted a more assertive
attitude toward maritime territorial disputes. Rather, other countries,
emboldened by passive or active U.S. support, have stepped up their efforts
to challenge China’s long-established territorial claims, forcing China either
to allow them to trample on Chinese sovereignty or to take appropriate
measures in response. Chinese officials, academics, and military officers
stress that China’s policy environment has changed, and that leaders must
therefore be more responsive to the concerns of Chinese citizens, including
nationalists who advocate a tough line on sovereignty disputes.32 Chinese
officials have also argued that China has not taken any actions that violate
legitimate freedom of navigation and that its policies of seeking to resolve
territorial disputes through peaceful dialogue and its willingness to set aside
sovereignty and pursue joint exploitation of resources in disputed areas
remain unchanged.33 Chinese officials insist that sovereignty disputes must
be resolved on a bilateral basis and have urged Washington not to interfere
or take sides.
Although most mainstream Chinese scholars and analysts have adopted
significant elements of this official narrative, two divergent schools of
thought have emerged. One focuses on the relative balance of power
between China and the United States and questions the U.S. long-term
capability to implement the rebalance. This school highlights China’s
continued rapid growth, accumulation of comprehensive national power, and
development of much more capable military forces and contrasts this with
slower U.S. economic growth, large budget deficits, and challenges in
maintaining the size of current U.S. military forces. This group views the
United States as a power in relative decline and questions its ability to
maintain its regional power, influence, and alliance structure over the longer
term. This implies that China should not overreact to the U.S. rebalance
since Washington will be unable to sustain it over the long term.
A second viewpoint tends to view the U.S. rebalance in much more
alarmist terms. For this school, China is clearly the target of the U.S.
rebalance and American efforts to step up deployments of military
capabilities in the Asia-Pacific. The reinvigoration of U.S. alliances and
expansion of security partnerships in the Asia-Pacific reflect a strategy of
encircling and containing China. This group tends to focus heavily on the
military elements of the rebalance, especially U.S. military deployments,
development of new military capabilities, and expanded security cooperation
with allies and partners. All of these actions are viewed as aimed against
China. Some in this school even argue that the United States is using its
allies and partners as proxies to challenge Chinese sovereignty and provoke
China into military overreactions that would damage its strategic position in
Asia.34
Chinese officials and scholars have expressed specific complaints about
some aspects of the rebalance and associated U.S. policies. One complaint
involves the way the January 2012 Department of Defense Strategic
Guidance lumped China and Iran together in a discussion of the challenge
posed by the anti-access/area denial capabilities of potential adversaries:
“States such as China and Iran will continue to pursue asymmetric means to
counter our power projection capabilities, while the proliferation of
sophisticated weapons and technology will extend to non-state actors as
well.”35 Chinese officials complain about the implication that China is a
“potential adversary” and object to being lumped together with Iran.
China has also complained about the emerging U.S. Air/Sea Battle
concept, a set of ideas focused on how the U.S. Air Force and U.S. Navy can
work together to ensure the continued U.S. ability to project power in the
face of growing anti-access/area denial (A2/AD) capabilities. The services
were tasked to develop the concept by then-Defense Secretary Robert Gates
in 2009, and many details remain classified.36 Initial public debate focused
on publications by authors at the Center for Strategic and Budgetary
Assessments, a Washington D.C. think-tank with close ties to some Pentagon
officials.37 These clearly identified China as the motivation for efforts to
develop the concept, and speculated about its application in the Asia-Pacific
region.
Official U.S. statements and writings on the Air/Sea Battle concept have
focused on the strategic need to maintain the U.S. ability to project power
despite adversary capabilities and the budget-driven desire to improve Air
Force–Navy interoperability.38 U.S. officials have been careful to discuss
responses to anti-access/area denial capabilities in generic terms, citing
concerns about their potential employment by a number of countries and by
non-state actors. Nevertheless, China is clearly making significant
investments in developing and deploying systems such as conventional
attack submarines, conventional precision strike missiles, anti-satellite
weapons, and anti-ship ballistic missiles that appear to be aimed at
contingencies involving the United States.39 China refers to these as
“counter-intervention” capabilities and denies that they are aimed at “any
specific country.”
The current focus of regional tensions involves China’s maritime
territorial disputes in the South China Sea and East China Sea. As a matter of
policy, the United States does not take a position on the question of the
sovereignty of the various disputed islands. The United States does
recognize Japanese administrative control over the Diaoyu/Senkaku islands,
and U.S. officials have repeatedly stated that the islands fall under the scope
of the U.S.–Japan security treaty. U.S. officials have emphasized the
importance of handling the disputes in accordance with principles such as
peaceful resolution of disputes, compliance with relevant international law
(especially UNCLOS), and respect for freedom of navigation. U.S. officials
have also supported ASEAN efforts to negotiate a binding code of conduct
for the South China Sea and have urged China to deal with the disputes via
multilateral means.40
 When crises have flared, as in the April 2012 Scarborough Shoal incident,
U.S. officials reiterated these principles publicly and urged the parties
involved to act with restraint. U.S. officials have also sometimes played a
quiet diplomatic role in crafting face-saving ways for the parties to de-
escalate the crisis. In the Scarborough Shoal case, the United States
reportedly brokered an agreement for both China and the Philippines to
withdraw ships from the disputed area.41 When China subsequently
redeployed paramilitary ships to the Scarborough Shoal and acted to
reinforce administrative control over the area, a State Department
spokesman issued a public statement singling out Chinese behavior.42 When
China responded to the Japanese government purchase of some of the
Diaoyu/Senkaku islands from a private Japanese owner with increased air
and naval patrols, senior U.S. officials reiterated that the islands are covered
under the U.S.–Japan security treaty and warned that the United States
would oppose “any unilateral actions that would seek to undermine Japanese
administration” of the islands.43
While avoiding taking sides in maritime sovereignty disputes, the United
States has sought to reinforce the principles discussed above, promote
international rules and mechanisms for managing and resolving disputes, and
fulfill its alliance commitments (including by helping its allies improve
surveillance and naval capabilities). Secretary Hagel stated in June 2013 that
the United States.

stands firmly against any coercive attempts to alter the status quo. We
strongly believe that incidents and disputes should be settled in a
manner that maintains peace and security, adheres to international law,
and protects unimpeded lawful commerce, as well as freedom of
navigation and overflight.44

Conversely, China appears to be looking for opportunities to reinforce its

sovereignty claims and expand its effective control over the disputed
territories and waters, redefining the status quo in its favor via actions on the
ground and in disputed waters.45 Given the high domestic political costs of
abandoning maritime sovereignty claims, Japan and Southeast Asia countries
are unlikely to either give up their claims or reach an accommodation with
China. As a result, regional tensions over maritime sovereignty disputes and
associated regional concerns about Chinese military capabilities and actions
are likely to continue and potentially increase.
Given this situation, one must consider the U.S. rebalance in light of the
alternative policy of not responding to Chinese assertiveness. If the United
States remained passive, Chinese nationalists would likely be emboldened
and increase calls for China to use its military power to resolve outstanding
territorial disputes. U.S. allies and partners in the region, already wary of
China, would likely increase efforts to build their own military capabilities,
perhaps even reconsidering longstanding nonproliferation commitments. The
result might have been increased regional instability and a potential
unraveling of the U.S. alliance structure with nothing to replace it.

Conclusion: implications for U.S.–China relations

Despite China’s negative reaction, the U.S. rebalance has had a positive
impact on regional security dynamics by reaffirming U.S. commitment to
sustaining a long-term diplomatic, economic, and security presence in the
Asia-Pacific and raising the costs of potential Chinese efforts to resolve its
maritime sovereignty claims through the use of coercion or force.
The United States faces a number of challenges in implementing the
rebalance over time. One of the most pressing is sustaining U.S. military
capabilities and commitments in the face of budget pressures. This is why
the Obama administration has sought to wrap the different elements of the
rebalance in an integrated package. A second challenge is maintaining the
willingness of the President and senior officials to travel to Asia regularly to
participate in multilateral meetings. A third challenge is managing the
domestic politics of regional free-trade agreements in ways that help the
United States shape regional norms and are politically sustainable at home.
This challenge delayed the Obama administration’s efforts to formulate a
regional trade policy. A fourth challenge is matching U.S. military and
diplomatic commitments with increased private sector business activity. A
fifth challenge is ensuring that a stepped up U.S. security presence does not
encourage allies and partners to undertake destabilizing actions, especially
with respect to territorial disputes. A final challenge is limiting the
competitive dynamics of U.S.–China relations at global and regional levels.
 Although the Chinese media and potential scholars and military officers
have criticized the U.S. rebalance in Asia and point to heightened regional
security tensions, it is not clear that increased U.S. commitment to the Asia-
Pacific region is necessarily bad for Sino–U.S. relations, much less that it
signals the start to a new Cold War as some have argued.46 U.S.
policymakers have been careful to frame U.S. Asia policy in terms of U.S.
interests in the region, and not in terms of containing China or frustrating its
legitimate aspirations. Moreover, the two countries share many important
common interests, including a shared stake in an open global economic
system and a stable Asia-Pacific region within which both can prosper.
The United States has repeatedly provided assurances that it does not seek
to contain or break up China; China has repeatedly provided assurances that
it does not seek to expel the United States access to the Asia-Pacific region
or to challenge U.S. global leadership. The problem is that neither side fully
believes the other’s assurances or trusts that they will last as the balance of
relative power between the United States and China changes over time. The
lack of strategic trust between U.S. and Chinese leaders described by Ken
Lieberthal and Wang Jisi is certainly real.47
But strategic trust cannot be built by pretending that U.S. and Chinese
strategic interests are perfectly aligned, or by ignoring the competitive
element in U.S.–China relations. The United States and China certainly do
not have a zero-sum relationship, but strategic competition is increasingly
evident on a range of military and strategic issues. Each side is focused on
the other’s military modernization, deployments, and exercises.
Improvements in Chinese military capabilities (especially A2/AD
capabilities) are attracting significant attention from U.S. strategists; many
of these Chinese development programs have been in development for many
years and appear to be targeted specifically at U.S. military capabilities.
Ignoring these competitive dynamics will not make them go away.
What is important is for the two sides to find ways to expand and deepen
the scope of cooperation on common interests and to find ways to limit and
manage the competitive aspects of U.S.–China relations.48 Senior political
leaders on both sides need to remain actively engaged and make full use of
summits and other mechanisms to articulate common interests and areas for
expanded bilateral cooperation. Actions and statements by top leaders set the
overall tone for bilateral relations, especially in China. U.S. and Chinese
leaders should also consider decisions about military capabilities and
regional policies in light of the potential impact on bilateral relations.
In this light, the June 2013 Sunnylands summit meeting in California
between President Obama and President Xi Jinping is a significant and
encouraging sign. According to a U.S. official, the summit is intended to
provide a “wide-ranging, informal setting for discussions between the two
leaders” that will “allow them to cover the broadest possible agenda, but also
to forge a working relationship that we will be relying on very much in the
years to come.”49 As National Security Advisor Donilon put it,

We do not want our relationship to become defined by rivalry and

confrontation … a better outcome is possible. But it falls to both sides
—the United States and China—to build a new model of relations
between an existing power and an emerging one. Xi Jinping and
President Obama have both endorsed this goal.50

There are several specific measures the two sides could adopt to manage
the competitive aspects of bilateral relations:

• Keep the competitive dimensions of U.S.–China relations within the

context of a broader, generally cooperative relationship that is vital to
both countries. Both sides should be careful not to let concerns about
worst-case scenarios and unlikely contingencies drive the broader
relationship and limit cooperation on important issues.
• Avoid “zero-sum” conceptions of regional security and competition for
influence. Stated U.S. and Chinese regional goals are not necessarily
incompatible; a loss for China is not necessarily a gain for the United
States. Both countries should recognize that smaller countries want the
United States and China competing for their favor, which is not
necessarily in either’s interest.
• Place some limits on competition that might make both sides worse off.
Unrestrained nuclear competition or all-out efforts to weaponize space
would require huge investments that might ultimately produce no
strategic advantages once the other side’s response is factored in.51
• The United States should continue to encourage and support Chinese
efforts to take on more responsibility for sustaining and supporting the
 international system; China should look for opportunities where it can
contribute to shared goals even if this entails some domestic economic
sacrifices.
• Expand bilateral and multilateral security cooperation. Competitive
dynamics will limit cooperation in some areas, but there are important
opportunities in matters such as peacekeeping, humanitarian affairs and
disaster relief, infectious disease control, counter-piracy, and energy
security where both countries can make important contributions.
Cooperation on these issues could help balance the more competitive
aspects of relations.
• Prepare for the unexpected. Developments on the Korean peninsula or
elsewhere might require both the United States and China to respond
using military forces. The two militaries should find ways to discuss
potential contingencies and how they might share information,
deconflict operations, or work together in various scenarios.

Notes
1 Views expressed in this paper are those of the author and do not necessarily reflect the policies of
the National Defense University, the Department of Defense or the United States Government.
The author thanks Katrina Fung for research assistance throughout, Min Jie (Terry) Zeng for
research assistance on Chinese views of the rebalance, and Evelyn Goh and James Przystup for
insightful comments and suggestions.
2 Examples include the Asia Foundation’s reports on America’s Role in Asia from 1992, 2000,
2004, and 2008 and Cossa, Ralph A., Glosserman, Brad, McDevitt, Michael A., Patel, Nirav,
Przystup, James, and Roberts, Brad, The United States and the Asia-Pacific Region: Security
Strategy for the Obama Administration, Washington, D.C.: Center for a New American Security,
2009, www.cnas.org/files/documents/publications/CossaPatel_U.S._Asia-
Pacific_February2009.pdf.
3 The Obama administration’s effort to increase attention and resources focused on Asia extends a
trend dating back at least to the George H.W. Bush administration’s East Asia Strategy Initiative
in 1990. See the positive remarks about the George W. Bush administration’s Asia policy in
Bader, Jeffrey A., Obama and China’s Rise: An Insider’s Account of America’s Asia Strategy,
Washington, D.C.: Brookings Institution Press, 2012 and Feigenbaum, Evan A., Strengthening
the U.S. Role in Asia, Washington, D.C.: Council on Foreign Relations, 2011.
4 See National Security Advisor Tom Donilon, “The United States and the Asia-Pacific in 2013,”
speech to the Asia Society, New York, March 11, 2013.
5 Sustaining U.S. Global Leadership: Priorities for 21st Century Defense, Washington, D.C.:
Department of Defense, January 2012, 2, available at
www.defense.gov/news/defense_strategic_guidance.pdf.
 6 Clinton, Hillary, “America’s Pacific Century,” Foreign Policy 189, November/December 2011,
56–63. Also see Obama, Barack, “Remarks By President Obama to the Australian Parliament,”
November 17, 2011, Canberra, Australia, www.whitehouse.gov/the-press-
office/2011/11/17/remarks-president-obama-australian-parliament.
7 Manyin, Mark E., Daggett, Stephen, Dolven, Ben, Lawrence, Susan V., Martin, Michael F.,
O’Rourke, Ronald, and Bruce Vaughn, Bruce, Pivot to the Pacific? The Obama Administration’s
“Rebalancing” toward Asia, Washington, D.C.: Congressional Research Service, March 28,
2012.
8 See Steinberg, James B., “Remarks at National Bureau of Asian Research Conference Engaging
Asia 2009: Strategies for Success,” Washington, D.C., April 10, 2009 and Clinton, Hillary
Rodham, “Remarks on Regional Architecture in Asia: Principles and Priorities,” Honolulu,
Hawaii, January 12, 2010.
9 This phrase appeared in Armitage, Richard L. and Nye, Joseph, The U.S.-Japan Alliance: Getting
Asia Right through 2020, Washington, D.C.: Center for Strategic and International Studies
[CSIS], February 2007, but was used regularly by Assistant Secretary of State Kurt Campbell,
who was a member of the Armitage-Nye study group. The report outlines the findings of a
bipartisan panel of Asia specialists co-chaired by Armitage and Nye.
10 Lanteigne, Marc, China and International Institutions: Alternative Paths to Global Power, New
York: Routledge, 2005; the point about Chinese reluctance to take on “costs, risks, and
commitments” is from Sutter, Robert, U.S.-China Relations: Perilous Past, Pragmatic Present,
Lanham, MD: Rowman and Littlefield, 2010.
11 Xinhua, “Chinese experts lash out at ‘China responsibility’ theories,” August 20 2010; Zhang
Zhouxiang, “Onus not binding on China,” China Daily, February 17, 2011.
12 See Bader, Obama and China’s Rise, Chapter 7; and Swaine, Michael D., “China’s Assertive
Behavior–Part One: On ‘Core Interests’,” China Leadership Monitor No. 34 (Winter 2011),
http://media.hoover.org/documents/CLM34MS.pdf; Swaine, Michael D. and Fravel, M. Taylor,
“China’s Assertive Behavior–Part Two: The Maritime Periphery,” China Leadership Monitor No.
35 (Summer 2011), http://media.hoover.org/documents/CLM35MS.pdf; Swaine, Michael D.,
“China’s Assertive Behavior–Part Three: The Role of the Military in Foreign Policy,” China
Leadership Monitor No. 36 (Winter 2012), http://media.hoover.org/documents/CLM36MS.pdf;
and Swaine, Michael D., “China’s Assertive Behavior–Part Four: The Role of the Military in
Foreign Crises,” China Leadership Monitor No. 37 (Spring 2012),
http://media.hoover.org/documents/CLM37MS.pdf.
13 Glaser, Bonnie S., China’s Coercive Economic Diplomacy—A New and Worrying Trend, PacNet
Number 46 (Honolulu, HI: Pacific Forum CSIS, July 23, 2012), available at
http://csis.org/publication/pacnet-46-chinas-coercive-economic-diplomacynew-and-worrying-
trend.
14 See Redden, Mark and Saunders, Phillip C., “Managing Sino-U.S. Air and Naval Interactions:
Cold War Lessons and New Avenues of Approach,” INSS China Strategic Perspectives No. 5,
2012, available at www.ndu.edu/press/lib/pdf/china-perspectives/ChinaPerspectives-5.pdf.
15 Pomfret, John, “U.S. takes a tougher tone with China,” Washington Post, July 30, 2010.
16 All travel statistics in this paragraph omit travel to Afghanistan and Pakistan that was focused on
the conflict there.
17 In his second term, President George W. Bush spent 33 days in Asia on 6 trips, versus 27 days on
5 trips for President Barack Obama in his first term. Secretary Condoleezza Rice spent 73 days in
Asia on 14 trips, compared to 101 days on 14 trips for Secretary Hillary Clinton. President Bush’s
 Secretaries of Defense spent 33 days in the region on 7 trips, versus 58 days on 13 trips for
President Obama’s Secretaries of Defense. See Saunders, Phillip C. and Fung, Katrina, “Wheels
Up! Has Obama Really Pivoted to Asia?” The Diplomat, July 23, 2013,
http://thediplomat.com/2013/07/23/wheels-up-has-obama-really-pivoted-to-asia/.
18 Signing the Association of Southeast Asian Nations Treaty of Amity and Cooperation was a
prerequisite for joining the East Asian Summit.
19 See the fact sheets from the U.S. Trade Representative’s office, available at www.ustr.gov/tpp;
and Schott, Jeffrey J., Understanding the Trans-Pacific Partnership Washington, D.C.: Peterson
Institute for International Economics, 2013.
20 Data derived from Chinese Ministry of Commerce, accessed on May 8, 2013 through the China
Economic and Industry Data (CEIC) Database.
21 USAID Foreign Assistance: http://gbk.eads.usaidallnet.gov/data/country.html by country based
on Economic Assistance.
22 See the priorities enumerated in Department of Defense, Sustaining U.S. Global Leadership:
Priorities for 21st Century Defense, January 2012, p. 4,
www.defense.gov/news/defense_strategic_guidance.pdf.
23 See Helvey, David, Deputy Assistant Secretary for East Asia, U.S. Department of Defense,
Statement before the Senate Committee on Foreign Affairs, Subcommittee on East Asian and
Pacific Affairs, April 25, 2013, www.foreign.senate.gov/imo/media/doc/Helvey_Testimony.pdf
and Yun, Joseph Y., Acting Assistant Secretary, Bureau of East Asian and Pacific Affairs, U.S.
Department of State, Statement before the Senate Committee on Foreign Affairs, Subcommittee
on East Asian and Pacific Affairs, April 25, 2013,
www.foreign.senate.gov/imo/media/doc/Yun_Testimony2.pdf.
24 Locklear, Samuel J., Commander, U.S. Pacific Command, statement before the Senate Armed
Services Committee hearing on U.S. Pacific Command Posture, April 9 2013.
25 For details, see the Helvey and Yun statements before the Senate Committee on Foreign Affairs,
Subcommittee on East Asian and Pacific Affairs, April 25, 2013.
26 Cole, William, “Navy Vessels Due In Asia-Pacific Area,” Honolulu Star-Advertiser, April 10
2013, B1; De Luce, Dan, “US Shift to Asia on Track Despite Budget Cuts: Admiral,” Agence
France-Presse, May 6, 2013.
27 China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines all claim some islands in the
South China Sea; China, Taiwan, and Japan claim the Diaoyu/Senkaku islands.
28 Recent editions of the Office of Secretary of Defense annual report to Congress on Military and
Security Developments Involving the People’s Republic of China (Washington, D.C.: Office of
Secretary of Defense, 2013, www.defense.gov/pubs/2013_China_Report_FINAL.pdf) discuss
U.S.-China military-military contacts; also see Kan, Shirley A., U.S.-China Military Contacts:
Issues for Congress, RL32496 (Washington, D.C.: Congressional Research Service, April 7,
2013).
29 Military and Security Developments Involving the People’s Republic of China 2013, Washington,
D.C.: Office of the Secretary of Defense, May 2013, 36, available at
www.defense.gov/pubs/2013_China_Report_FINAL.pdf.
30 This section draws primarily upon official Chinese statements and the author’s interactions with
Chinese officials, military officers, and scholars in a variety of settings over the period 2009–
2012. Also see Swaine, Michael D., “Chinese Leadership and Elite Responses to the U.S. Pacific
 Pivot,” China Leadership Monitor 38 (Summer 2012),
http://media.hoover.org/documents/CLM38MS.pdf.
31 Saunders, Phillip C., “China’s Role in Asia,” in Shambaugh, David and Yahuda, Michael, eds,
International Relations in Asia (second edition), Lanham, MD: Rowman and Littlefield, 2014.
32 See Jakobson, Linda, and Knox, Dean, New Foreign Policy Actors in China, SIPRI Policy Paper
No. 26, September 2010, http://books.sipri.org/product_info?c_product_id=410.
33 China pursued joint seismic exploration with the Philippines and Vietnam from 2007–2009 and
reached an agreement with Japan on joint exploitation of natural gas in the East China Sea in
2008, but implementation of that agreement has stalled, largely due to domestic opposition in
China.
34 Interviews in Shanghai, May 2012.
35 Sustaining U.S. Global Leadership Priorities for 21st Century Defense, 4.
36 See DuPree, Philip, and Thomas, Jordan, “Air-Sea Battle: Clearing the Fog,” Armed Forces
Journal, May 2012, www.armedforcesjournal.com/2012/05/10318204 and Air-Sea Battle:
Service Collaboration to Address Anti-Access and Area Denial Challenges, Air-Sea Battle Office,
May 2013, available at http://navylive.dodlive.mil/2013/06/03/overview-of-the-air-sea-battle-
concept/.
37 Krepinevich, Andrew F., Why AirSea Battle?, Washington, D.C.: Center for Strategic and
Budgetary Assessments, February 19, 2010, www.csbaonline.org/publications/2010/02/why-
airsea-battle; and van Tol, Jan, Gunzinger, Mark, Krepinevich, Andrew F., and Thomas, Jim,
AirSea Battle: A Point-of-Departure Operational Concept, Washington, D.C.: Center for
Strategic and Budgetary Assessments, May 18 2010,
www.csbaonline.org/publications/2010/05/airsea-battle-concept/.
38 See the article by Air Force Chief of Staff General Norton A. Schwartz and Chief of Naval
Operations Admiral Jonathan W. Greenert, “Air-Sea Battle: Promoting Stability in an Era of
Uncertainty,” The American Interest, February 20, 2012, www.the-American-
interest.com/article.cfm?piece=1212.
39 See Military and Security Developments Involving the People’s Republic of China 2013.
40 See Campbell, Kurt, Assistant Secretary of State for East Asian and Pacific Affairs, Testimony
before the East Asian and Pacific Affairs Subcommittee of the Senate Foreign Relations
Committee hearing on “Maritime Territorial Disputes and Sovereignty Issues in Asia,” September
20, 2012 and the Joint Press Conference with Secretary of State Hillary Rodham Clinton,
Secretary of Defense Leon Panetta, Philippine Secretary of Foreign Affairs Albert del Rosario,
and Philippine Secretary of National Defense Voltaire Gazmin, April 30, 2012.
41 Perlez, Jane, “Philippines and China Ease Tensions in Rift at Sea,” New York Times, June 18,
2012; Campbell Testimony, September 20, 2012.
42 Ventrell, Patrick, Acting Deputy Spokesperson, State Department Office of Press Relations, Press
Statement “South China Sea,” Washington, D.C., August 3, 2012,
www.state.gov/r/pa/prs/ps/2012/08/196022.htm.
43 Perlez, Jane, “China Criticizes Clinton’s Remarks about Dispute with Japan over Islands,” New
York Times, January 20, 2013.
44 Karen Parrish, “U.S. Following through on Pacific Rebalance, Hagel Says,” American Forces
Press Service, June 1, 2013.
45 See Fravel, M. Taylor, “China’s Island Strategy: ‘Redefine the Status Quo’,” The Diplomat,
November 1, 2012, http://thediplomat.com/china-power/chinas-island-strategy-redefine-the-
status-quo/.
46 Xiang, Lanxin, “China and the ‘Pivot’,” Survival 54 (October/November 2012), 113–128.
47 Lieberthal, Kenneth, and Wang, Jisi, Addressing U.S.-China Strategic Distrust, Washington,
D.C.: Brookings Institution, March 30, 2012,
www.brookings.edu/~/media/research/files/papers/2012/3/30%20us%20china%20lieberthal/0330
_china_lieberthal.pdf.
48 Saunders, Phillip C., “Managing Strategic Competition with China,” INSS Strategic Forum 242,
July 2009, www.ndu.edu/inss/docuploaded/SF242China_Saunders.pdf.
49 The White House, “Background Conference Call by Senior Administration Officials on the
President’s Meetings with President Xi Jinping of China,” June 4, 2013.
50 Tom Donilon, “The United States and the Asia-Pacific in 2013,” Speech to Asia Society, New
York, March 11, 2013.
51 See Gompert, David C., and Saunders, Phillip C., The Paradox of Power: Sino American
Strategic Restraint in an Age of Vulnerability, Washington, D.C.: NDU Press, 2011,
www.ndu.edu/press/paradox-of-power.html.
Part III
China’s power
Security order in Asia
6 Peripheral South Asian
response to the growth of
Chinese power
A study in dichotomous continuity

Mahmud Ali

Discordant discourse: unity in diversity

With the exception of East Asia, few regional sub-systems have had closer
linkages to China than South Asia. The two have historically exchanged
ideas including religious beliefs, traded goods, and experienced cultural-
political interactions. China’s growing power-capabilities, catalysed by its
‘reform-and-opening’, and apparent since the late 1990s, triggered
transitional uncertainties born of systemic fluidity. The ‘Indo-Pacific’
regional strategic equilibrium1 has arguably been unsettled since the turn of
the century. However, South Asia’s relational dynamics vis-à-vis China
demonstrate a measure of dichotomous continuity, suggesting China’s
‘national renewal’ has deepened rather than transformed features forged
early in South Asia’s post-colonial era, with some modifications. Whereas
the region’s core-power, India, has had a long history of competitive
relations with China,2 Afghanistan, Pakistan, Sri Lanka and Bangladesh
have had friendly, even close, ties to Beijing for decades. This consistent
difference between the sub-systemic core and periphery vis-à-vis China is
dichotomous continuity. Peripheral South Asian (PSA) leadership remarks
are illustrative:
 Afghanistan is extremely grateful – China has been a steady partner in
providing stability to Afghanistan, in providing a fundamental support
to Afghanistan towards stabilisation and progress. China has been the
biggest investor in Afghanistan.3
(Hamid Karzai)

APakistan is committed to take the historical and time-tested all-

weather friendship with China to new heights and to continue working
hand-in-hand with China for peace and stability of the region and the
mutual benefit of the people of the two countries.4
(Asif Zardari)

AI must record here the deep gratitude of the people of Sri Lanka to
China for their commitment to support Sri Lanka in the battle against
terrorism that we concluded with success; and for the assistance given
for reconstruction and resettlement in the former conflict zone in our
country.5
(Mahinda Rajapaksa)

ALast year, during my visit to China, I requested the Chinese

Government to present two frigates with helicopters to the Bangladesh
Navy. The Government of China agreed… . Meanwhile, two ultra-
modern missile-armed large patrol craft are being built in China.6
(Sheikh Hasina)

National leaders, constrained by diplomatic propriety to operate within

circumscribed normative parameters, may not provide conclusive evidence.
However, as responsible representatives of respective state-parties, they
reflect official perspectives, preferences and priorities. These remarks by
PSA leaders underscore a strong congruence of interests. The Afghan and
Pakistani presidents note their states’ relations with China, specifically the
long-term, strategic, role China plays in shaping the security milieu. Sri
Lankan and Bangladeshi leaders, too, emphasise security links within the
framework of close ties. Rajapaksa gratefully acknowledges Beijing’s
support for Colombo’s campaign against the Liberation Tigers of Tamil
Eelam (LTTE) insurrection, and post-conflict reconstruction. The conflict’s
defining role in Lankan state-consolidation explains Colombo’s gratitude.
Sheikh Hasina focuses on Sino-Bangladeshi military-naval procurement
links. Few national leaders could request their foreign hosts for the gift –
presumably at ‘friendship prices’, or gratis – of helicopter-carrying frigates,
but Sheikh Hasina, criticised as overly sensitive to Indian sensibilities,7 felt
she could, and did. Her reference to two under-construction missile-boats
underscored long-standing military materiel bonds.8 Close Pakistani, Sri
Lankan and Bangladeshi links to Beijing, including security-collaboration,
long preceded China’s recent ‘rise’. This continuity reflects persistently
shared security perspectives.
Compare this to comments made by a former Chief of the Indian Army
Staff, representing the institution most closely associated with strategic
policy-formulation vis-à-vis China since the 1962 border war. That defeat
shook up India’s political-military establishment and civil-military
relations, revealing hitherto covert anti-Chinese Indo–US collaboration.9
Indian politicians have since been ‘making political comments’, ceding
significant autonomy in defence matters to military professionals.10

In a world where nationalism is at the core of international

relationships the possibility of [Sino-Indian] confrontation is not only
inherent but inbuilt. Unresolved boundary issues between the two
further enhance this possibility… . China’s ‘string of pearls’ policy, its
strategic relationship with Pakistan, the extensive infrastructure
development in Tibet, an increased footprint in the Indian Ocean and
the Pakistan-occupied Kashmir and its aid to fledgeling insurgent
movements in India are some of the irritants that are not conducive to
good relations.11
(General Deepak Kapoor)

General Kapoor’s tautological observation that ‘confrontation is not only

inherent but inbuilt’ is significant in that context. The contrast between that
perspective and PSA views indicates a profound dichotomy.12 Given South
Asia’s Indo-centricity,13 this tension reflects and reinforces intra-regional
insecurity dynamics. This analysis demonstrates that whereas India views
Chinese influence in South Asia as destabilising, its smaller regional
neighbours examined here not only do not share that view, but also pursue
close ties, including varying degrees of security collaboration, with China,
to assuage their own profound insecurities. While Afghanistan’s key
insecurity resides in its contention with Pakistan, India itself is the source of
much Pakistani, Sri Lankan and Bangladeshi anxiety.14 PSA security
discourses underscore another contrast. Leaders and most policy analysts
praise China’s role in their economic and security pursuits;15 others,
however, note difficulties with Chinese commercial entities and practices.16
Commentary acknowledges long-standing Chinese presence which
precipitated few dramatic policy shifts.
A third contrast resides in PSA states’ obsessive focus on India and
India’s focus on China and Pakistan, while other PSA states feature
marginally in Delhi’s strategic calculus.17 Indo-PSA dichotomy dramatises,
as General Kapoor noted, presumed Pakistani, Sri Lankan and Bangladeshi
roles in China’s ‘string of pearls’, notionally designed to resolve Beijing’s
‘Malacca dilemma’.18 An Office of Net Assessment (ONA)-sponsored 2004
study described China’s answer as a network of deep-sea ports: Gwadar,
Hambantota and Chittagong, providing access to Chinese vessels, with
‘string of pearls’ reflecting anxiety.19 While Pakistani, Sri Lankan and
Bangladeshi discourses ignore this formulation, concern over the alleged
naval necklace in Indo–US security literature triggered operational
responses.20 In the subsequent contention for Maldivian deep-water
facilities, India trumped China.21 Given the sub-system’s Indo-centricity,
Colombo, Male and Dhaka, conscious of their physical
contiguity/proximity, and dependence on Indian goodwill, could hardly
invite the PLA Navy (PLAN) to use their harbours for anti-Indian
operations. The military-centric formulation’s fallacy and escalatory risks
inherent in the presumed dialectics are known,22 but anxiety persists.

Testable hypotheses
• Afghanistan, Pakistan, Sri Lanka and Bangladesh have enjoyed close,
friendly ties with China.23
• None of these PSA states views China as a hostile power.
• China’s growing power has reinforced/modified their policies, not
transformed them.
• Continuity reflects stronger intra-sub-systemic insecurity dynamics
than the impact of external stimuli.
• External balancing and hedging against proximate adversaries appear
to be key policy drivers.
• South Asia’s structural Indo-centricity could help explain ‘consistently
dichotomous’ patterns.

Case studies
What explains the dichotomous pattern? Why do peripheral ‘soft states’24
praise Chinese economic and strategic support, while the power at the sub-
systemic core views China as a strategic adversary? Is this dichotomy
precipitated by China’s growing strength, and a function of China’s recent
‘rise’? The record suggests strong relations preceded the latter. As
indications of causal links between close ties and China’s ‘rejuvenation’ are
unclear, is the dichotomy explained by other factors defining the sub-
system? Answers lie in testing whether current relations began or
significantly changed since the 1990s, or when China’s enhanced stature led
Beijing to describe the process as ‘peaceful rise’, and ‘peaceful
development’.25 Analyses testing PSA responses to China’s growing power
follow.

Pakistan

The most substantial of the four, nuclear-armed but insecure, Pakistan26 has
enjoyed close relations with China for five decades. The two neighbours
have been formally allied only since 2005, but Sino-Pakistani strategic
collaboration has a long history. In 1959, Pakistan offered to negotiate an
agreement formalising the border between Gilgit-Baltistan and China’s
Xinjiang Uighur Autonomous Region. Sino-Indian tensions27 leading to
war contrasted sharply to the Sino-Pakistani border agreement of March
1963.28 Since then, through the September 1965 Indian–Pakistani war, East
Pakistan’s Indian-aided secession into Bangladesh in 1971, the 1980–89
Pakistan-based and US-led anti-Soviet covert campaign in Afghanistan,
Pakistan’s response to India’s 1998 nuclear tests, myriad domestic political
and economic crises, and the aftermath of the US-led Operation Enduring
Freedom (OEF) since October 2001, Sino-Pakistani relations, in contrast to
India’s relations with both,29 remained closely supportive.
China and Pakistan frequently eulogise their ‘all-weather friendship’.30
Since 1970–71, when domestic difficulties culminated in dismemberment,
Pakistani leaders have frequently visited China, seeking political, economic
and military assurances. China and America, brought together in a
clandestine diplomatic coup executed by the then-President, General Yahya
Khan, supported Pakistan in its internecine conflict-turned-regional war
over Bangladesh with the Soviet-ally India.31 Throughout residual
Pakistan’s diplomatic isolation in the 1970s, China remained a steadfast
partner. In the 1980s, Beijing provided funds and ordnance for the anti-
Soviet Jihad.32 However, after India described China as the trigger for its
1998 nuclear tests, and Pakistan’s covert occupation of Indian-controlled
Kashmiri peaks precipitated the potentially escalatory ‘Kargil conflict’ in
1999, Beijing conveyed its unease to Islamabad.33
General Pervez Musharraf restored normalcy but needed help. Five days
after Washington threatened Pakistan’s ‘strategic assets’, forcing Musharraf
to grant US forces secure access and airbases for OEF, a Chinese emissary
met Musharraf to endorse this new alignment.34 Musharraf had made a
wrenching, life-threatening decision, and Chinese support helped. Days
later, he made his first presidential visit to China.35 His successor, Asif
Zardari, visited China a month after taking office, returning frequently.36
Just as Indo-Pakistani insecurity dynamics are driven by asymmetric power-
relations, the countervailing Sino-Pakistani alliance, too, is asymmetric in
emphasis and substance. Pakistan’s need for Chinese aid is much more
profound than China’s need for Pakistani support. The asymmetric
triangular insecurity dynamics are thus explained: ‘For China, Pakistan is a
low-cost secondary deterrent to India. For Pakistan, China is a high-value
guarantor of security against India.’37 Islamabad acknowledges the contrast
between Pakistan’s relations with China, and other neighbours.38
Pakistan’s failure to assuage elemental insecurities vis-à-vis India39 with
intermittent external balancing alliances with the USA and Arab monarchies
deepened its dependence on China.40 ‘Until about 1990, Beijing clearly
sought to build up Pakistan to keep India off balance.’41 China’s role as a
provider of military matériel and technology expanded significantly after
Washington cut off aid in September 1990. Pakistani armed forces have
procured Chinese hardware, obtained technology for local fabrication, and
collaborated in joint-production. Pakistan’s order of battle offers
evidence:42 ballistic missiles43 and nuclear weapons-programmes,44 e.g. the
1994–95 transfer of 5,000 ring-magnets reportedly used in suspension-gears
on centrifuges enriching uranium.45 Nuclear aid ended in the late 1990s
when Washington certified Beijing’s Nuclear Non-Proliferation Treaty
(NPT) compliance. Conventional ordnance includes tanks, towed artillery,
mortars, HongYing-5 MANPADs,46 guided-missile frigates, anti-ship cruise
missiles,47 fighter aircraft, AWACs and missiles.48
The 2003 ‘Joint Declaration on Direction of Bilateral Relations’
formalised the post-1990 economic focus, inviting Chinese investments
including to militant-infested regions. By 2010, around 10,000 Chinese
workers were engaged in nearly 120 projects; investments approached $15
billion.49 Projects included Karakoram Highway (KKH) expansion, Gwadar
Port, Chashma nuclear power-plants, the Indus Highway, the Makran
Coastal highway, Thar coal mines, Saindak gold/copper mines, thermal
power projects and railway upgrades.50 During Hu Jintao’s November 2006
visit, 18 accords, including a free-trade agreement aiming to boost trade
from $4.26bn to $15 billion by 2011, were signed.51 In addition to disaster-
relief, China provided $1 billion in foreign reserves to help Pakistan
overcome post-2008 balance-of-payment challenges.52
The 2005 Treaty of Friendship and Cooperation, pledging ‘neither party
will join any alliance or bloc which infringed upon the sovereignty, security
and territorial integrity’ of either, and that they ‘would not conclude treaties
of this nature with any third party’, reinforced security collaboration.53
Abductions of Chinese workers in Pakistan triggered both commercial and
security concerns.54 The kidnapping of Chinese nationals by militants based
in Islamabad’s Red Mosque55 in 2007 led to bloody army action, with long-
term reverberations.56 Although militants have attacked Pakistani military
installations since November 2006, raids on the Gwadar port attracted
particular attention57 because of Chinese presence, and Gwadar’s
prominence as a ‘pearl’ in China’s strategic ‘string’. Whether militants
targeted Chinese presence, or the attacks were part of a Balochi insurrection
simmering since Islamabad crushed an episode in 1973–77, is unclear.
However, Gwadar’s locus as the southern terminus of a 1,000-mile
transport network linking Xinjiang with the Arabian Sea via the KKH and
the Rawalpindi-Quetta-Dalbandin-Gwadar road-rail network may explain
its strategic significance.58
In 2011, Pakistan asked China to erect a naval base at Gwadar for shared
use;59 Beijing declined.60 Islamabad’s failure to build a key service road
and transfer land promised to the port led PSA (Port of Singapore
Authority) to terminate its contract in August 2012 and begin transferring
port-management to a Chinese firm.61 While others discerned negative
strategic implications,62 the Sino–Pakistani discourse stressed mutual
economic-commercial gains.63 China’s ‘rise’ may have coloured this shift
but it would not have occurred without Pakistan’s elemental insecurity, a
need for external balancing and a tradition of strategic collaboration. A
more potent symbol of the latter, the KKH, built in 1959–79 and opened to
the public in 1986,64 established China’s physical stake in Pakistan’s
territorial status quo, especially in disputed Kashmir, and made possible
Gwadar’s probable role in China’s economic-diplomatic strategy.65

Afghanistan
Three decades of violent upheavals have eroded Afghanistan’s cohesion.
For years, Kabul’s writ barely ran beyond the capital. Even within its
‘secure’ precincts, militant attacks on state leadership and institutions
underscore state-fragility.66 As foreign military withdrawal approaches,
insecurity and uncertainty cloud Afghan prospects.67 Afghanistan’s sui
generis features demand caution in evaluating its response to China’s
growing power.
 China, a key player in the US-led 1980s anti-Soviet Jihad, shipped so
much ordnance to Mujahideen guerrillas via Pakistan’s Inter-Services
Intelligence Directorate (ISI),68 that 12 years after the Soviet withdrawal,
US forces recovered large caches from al-Qaeda’s Tora Bora bases.69
Profound sensitivities notwithstanding, Beijing allowed Uighur combatants
from Xinjiang to cross the Wakhan Strip to join the Jihad.70 However, after
Washington closed its Kabul embassy in 1989, China followed suit.
Following al-Qaeda’s September 2001 attacks on America, China offered
help with intelligence on Jihadi groups.71 As Operation Enduring Freedom
ousted the Taliban, forced al-Qaeda to flee, and established Hamid Karzai’s
interim administration, Sino–US cooperation reached ‘an unprecedented
extent’.72 Post-Taliban Afghanistan received non-assertive Chinese support
through high-level contacts.73 Exchanges focused on security concerns over
Uighur militants mounting attacks in Xinjiang from Afghan-Pakistani
highlands.74 Mineral and energy projects, too, received attention.

Afghans eye China

No official analyses openly attribute Beijing’s rising profile in Afghanistan
to China’s growing power. Afghanistan prioritised building ties with 14
‘Central Asian’ neighbours including China,75 seen as a model of un-aided
rapid development;76 China let the US-led coalition dominate Afghan
security and external affairs. Leadership visits reflected asymmetric
relations. Karzai visited Beijing in January 2002, shortly after assuming
office; China reopened its embassy in February, pledging $150 million in
reconstruction aid.77 In December, China signed the ‘Kabul Declaration on
Good Neighbourly Relations’, pledging to respect Afghan sovereignty and
territorial integrity, support the ‘peace process’ and assist reconstruction.
In 2007, Kabul accepted bids from the Metallurgical Corporation of
China (MCC) and Jiangxi Copper to develop the Aynak mines in Logar
Province. MCC paid an $808 million bonus to Afghanistan and invested
$2.8 billion in the mines.78 The project included a 400 MWe power-plant,
rail-road infrastructure, schools and hospitals. Karzai informed Islamabad
that China would build an Afghan-Pakistan railway link to boost trade.79
Beijing’s welcomed investments in the mining, energy, infrastructure and
communications sectors stirred some controversy.80 In his 2008 annual
address to parliament, Karzai nonetheless listed China first among
neighbours relations with whom were ‘acquiring strategic depth’.81 China
attended multilateral meetings on Afghan security, stability, drugs,
demining and development,82 urging national reconciliation among factions
and cooperation among regional actors to resolve the security impasse.
However, Beijing remained more active bilaterally.
Karzai’s March 2010 visit to China following his disputed 2009 re-
election reflected efforts to reduce reliance on the West.83 In December
2011, Kabul gave contracts worth $400 million to China National
Petroleum Corporation (CNPC) for hydrocarbon exploration in the Amu
Darya basin.84 In September 2012, during the visit of China’s domestic
security minister, Politburo Standing Committee (PBSC) member Zhou
Yongkang to Kabul, the neighbours signed economic and security
agreements including one aiming at ‘safeguarding Afghanistan’s national
stability’.85 Implementing a Hu–Karzai accord on anti-extremist
collaboration, Zhou pledged to ‘train, fund and equip Afghan police’.86
Karzai sought expanded cooperation; Zhou said: ‘It is in line with the
fundamental interests of the two nations for China and Afghanistan to
strengthen a strategic and cooperative partnership which is also conducive
to regional peace, stability and development.’87 That combination of
security and economic interests, shared goals and geospatial proximity
shaped Sino–Afghan relational dynamics, with China’s growing power
informing calculations of mutual benefit.88 However, tensions remained. In
June 2012, shortly after Karzai and Hu Jintao agreed on ‘strategic
cooperation’, China slashed the weekly quota of visas for Afghan nationals
to 50, requiring invitations from Chinese sponsors. Kabul-Urumqi direct
flights were stopped.89
Sino-Afghan relations were also informed by elemental Afghan-Pakistani
mutual insecurity90 bred by ethno-cultural bonds amongst Pashtun/Pakhtun
communities straddling the Durand Line, a border rejected by Kabul91 but
insisted on by Islamabad, unable to countenance irredentist Pashtunistan
demands.92 Afghanistan’s initial rejection of Pakistani independence and a
perceived threat to Pakistan’s territorial integrity,93 Pakistan’s covert
involvement in Afghan affairs seeking ‘strategic depth’ and precluding an
Indo-Afghan double-envelopment,94 and decades of line-crossing militant
violence have rendered ‘Af-Pak’ conjoined strategic twins struggling to
pursue mutually exclusive objectives free from each other’s poisoned
embrace.95 Afghans recognise they need Pakistan’s help in ending the
conflict ravaging their land, but distrust Pakistan.96 Fear and loathing drove
Kabul to embrace Delhi which partly pursued its Pakistan policies via
Afghan proxies.97 The Afghan–Pakistan–India triangle deepened mutual
insecurity.98
In contrast, Afghan reliance on China, given China’s locus in Pakistan’s
security firmament, and Beijing’s interest in post-2014 Afghan stability,
may have eased Pakistani movement towards reconciliation.99 China was
instrumental in persuading Pakistan and Afghanistan to pursue shared
security interests in addressing militant threats.100 President Obama himself
acknowledged Beijing’s contribution.101 In late 2012, Pakistan hosted the
Afghan Peace Council, releasing several Afghan-Taliban leaders at its
request, even proposing a strategic partnership. With Afghanistan’s security
milieu rapidly evolving, Kabul attributes increasing significance to its
China diplomacy. China’s growing power likely reinforces this trend, but
whether that alone explains Afghan policy is unclear.102

Sri Lanka
The LTTE’s violent terrorist-insurgent campaign had threatened Sri Lanka
since the late 1970s. Colombo finally vanquished the group in bloody
combat in 2009. This protracted conflict coloured perceptions, priorities and
policy-preferences of successive governments. China’s aid to Sri Lanka in
this crucial endeavour, and in post-conflict reconstruction, proved
gratifying.103 As Rajapaksa noted, this was a key definer of Sino–Sri
Lankan relations. However, Beijing had been helping Colombo for decades
before attaining its current status. In April 1971, when the Janatha Vimukthi
Peramuna (JVP, People’s Liberation Front) mounted a violent campaign,
Prime Minister Sirimavo Bandaranaike sought ‘non-aligned’ assistance,
crushing the rebellion with US, Soviet, Chinese, Indian and Pakistani
support.104 At the end of that turbulent year transforming South Asia,105
Bandaranaike pressed for UN General Assembly resolutions proclaiming an
Indian Oceanic ‘zone of peace’ and replacing Taipei with Beijing
representing ‘China’ at the UN. Both were passed. In June–July 1972,
months after India’s Bangladeshi victory over Sino-US ally Pakistan,
Bandaranaike paid a ten-day visit to China. Mutual appreciation aside,
Beijing pledged continued economic and diplomatic support for Sri Lanka’s
independence, territorial integrity and non-aligned policy.106
As Indian sponsorship of Tamil separatism in the 1970s–1980s marred
Indo-Sri Lankan ties,107 insecurity deepened Colombo’s reliance on
Beijing. India’s 1987 intervention and subsequent combat against the LTTE
transformed the dynamics,108 but as a non-interventionist patron, China’s
benign profile rose. Sri Lanka’s domestic security challenges and a quest
for autonomy by external balancing in a complex, competitive, geo-political
milieu shaped diplomacy. Four decades after 1971, Colombo secured
Chinese, Indian and Pakistani support in its anti-LTTE campaign.109
China’s role in that enterprise underscored a continuum in Colombo–
Beijing interactions as Sri Lanka drew on China’s growing ability and
willingness to provide ‘win-win’ economic and security assistance.
Perceptions of shared interests were formalised as an ‘all-round cooperative
partnership’110 during Premier Wen Jiabao’s April 2005 visit:

• Promoting traditional friendship and expanding exchanges between

governments, parliaments and parties;
• Exploring new areas of economic and commercial cooperation;
• Expanding cooperation in agriculture, fishery and tourism;
• Enhancing coordination on international and regional issues.

Four months later, Hu Jintao hosted President Chandrika Kumaratunga in

Beijing, fleshing out the partnership.111 Its biggest beneficiary was the
Hambantota Port. China’s Export-Import Bank paid 85 per cent of the
expansion project’s $361 million first phase in January 2008. China
Harbour Engineering and Sinohydro Corporation completed the 39-month
phase in 2011. Vessels of 100,000 DWT can berth on 600 metre-long quays
on a 17 metre-deep basin.112 China also built a $209 million airport, a $7.89
million sports stadium and other facilities. In 2012, Beijing added $240
million to infrastructure funding, building a transport hub around
Hambantota.113 One of Sri Lanka’s poorest regions, Hambantota is
Rajapaksa’s political base. Lankan discourse stresses the project’s
commercial, industrial and economic gains, attributing no role to the
PLAN.114

Bangladesh
China, aligned to US–Pakistani interests since 1970, recognised Bangladesh
in 1975. In 1976, General Ziaur Rahman ended Bangladesh’s Indo–Soviet
alignment with support from the USA, Muslim states and China for
political-economic reasons.115 Zia laid the foundations of security support
during his first visit to China in 1977. Ties were cemented during Vice-
Premier Li Hsien Nien’s and Foreign Minister Huang Hua’s 1978 visit to
Dhaka. China offered $58.3 million in economic aid;116 a five-year trade
agreement boosted commerce. By 1980, when Zia made his third trip to
Beijing, China had become the principal source of military hardware.117
Since then, Dhaka’s approach to Beijing alternated between warmth and
correctness although the party of ‘correct’ conduct, the Awami League, has
recently pursued friendship.118 In her first term as Prime Minister (1996–
2001), Hasina focused on ending an insurgency and securing vital water-
flows with Indian support. The largest defence procurement deals were for a
Korean-built frigate and Russian MiG-29s. However, Chinese infrastructure
projects, initiated by General H.M. Ershad in the 1980s, continued, and
trade expanded. Hasina’s successor, Khaleda Zia, restored the focus on
China, visiting Beijing in May 2004. In April 2005, Wen Jiabao
reciprocated, establishing a mainly economic ‘all-round cooperative
partnership’.119
When China and India opened the Nathu La trade route in September
2005, Beijing hoped Sino–Bangladeshi trade, via the Burimari landport,
200 km south, would benefit.120 Two months later, Beijing expanded the
Bangkok Agreement on preferential tariff into the Asia-Pacific Trade
Agreement with neighbours including Bangladesh.121 Ties deepened in
2006 as Bangladesh shipped apparels to China, now its top import source.
Dhaka also received counter-terrorism assistance, satellite-imagery
receivers, military matériel and agro-advisors. Chairing the South Asian
Association for Regional Cooperation (SAARC), Bangladesh welcomed
China as an observer, which increased post-graduate scholarships, and
began building a $400 million digital telecommunications network,
requested by Zia in 2004. Ministers signed an agreement on Bangladesh–
Myanmar–China road-links.122
Security concerns retained prominence.123 When Chief of Army Staff,
General Moeen Ahmed, sought to deepen ‘the Bangladesh-China all-round
partnership of cooperation’, Defence Minister Cao Guangchan replied:
‘China and Bangladesh have forged good cooperation and coordination on
international issues and China will make joint efforts with the Bangladeshi
side to safeguard regional and world peace and stability.’124 Under
Bangladesh’s 2007–08 military-led caretaker administration, when
Bangladesh–Myanmar tensions over maritime disputes escalated, Dhaka
sought Beijing’s mediation, and triangular diplomacy calmed the waters.125
Prime Minister Hasina followed up her January 2010 visit to India with one
to China, emphasising defence cooperation.126 Her rival, Khaleda Zia,
reversed the order, visiting Beijing before New Delhi, in October 2012.127
Shortly after her return from Beijing, PBSC member Li Changchun, visiting
Bangladesh, called on her after meeting Hasina, reiterating assurances of
continued support.128
Beijing also revealed offers to build a $5 billion deep-seaport on Sonadia
Island in the Bay of Bengal, and a $700 million multi-lane road tunnel
under the River Karnaphuli to boost Chittagong’s transport capacity.
Assuaging Dhaka’s anxiety over Indian, American or Japanese reactions,
Beijing agreed to collaborate with any of these countries in a consortium.129
Although Hasina’s government did not respond, it did confirm efforts to
procure Chinese submarines,130 demonstrating that within Bangladesh’s
deeply divided polity, a consensus on the benefits of economic and security
collaboration with China has long been apparent.
China–Indian–US ‘pivot’ dynamics vis-à-vis PSA states
America’s ‘rebalancing’ of ‘all-of-government’ efforts to restore its regional
preeminence across the Asia-Pacific may have transmuted into a widely
perceived enterprise aimed at constraining China.131 Sri Lanka and
Bangladesh, falling within the PACOM AoR132 and hence the pivot’s remit,
betray few policy shifts on that account. Their relations with China, India
and America appear to have gained a measure of autonomous consistency
with dialectic adjustments towards sub-systemic equilibrium. China has not
asserted its growing power in ideational or agenda-setting terms, limiting
overt responses to Washington’s ‘rebalancing’ vis-à-vis the PSA states to
angst-ridden rhetoric.133 China’s relations with the four actors have evolved
from a base-line shaped by factors which stretch further back than either
China’s ‘rise’ or America’s ‘pivot’.
Indian analysts acknowledge that ‘The negative perception of India in
most of the neighbouring countries … seems near constant’.134 Against that
backdrop, a Sino–Indian–US–Pakistani security complex135 provided the
strategic context in which China’s influence evolved.136 Anxiety over the
consequences of ‘1,000 Xinjiang Uighurs’ being ‘trained in Afghanistan by
Osama bin-Laden’s al-Qaida network’ has focused Beijing’s attention on
security cooperation with Afghanistan and Pakistan.137 China has not
applied its growing power to push PSA states towards radical policy
changes. However, pressed by Presidents Bill Clinton in 1998 and Barack
Obama in 2009, China encouraged moves to reduce regional tensions in
South Asia. There is some recognition that this led to efforts to stabilise
Pakistani–Indian, Pakistani–Afghan, and even Bangladeshi–Indian
relations, stressing an economic foundation for pacific interactions.138
Beijing’s increasing emphasis on stabilising Sino–Indian relations has been
a key factor.139 However, this does not automatically detract from powerful,
historical, non-benign mutual perceptions at both popular and elite levels in
China and India.140 This chapter has examined the consistent dichotomy on
stances towards China between PSA states on the one hand, and India on
the other. That dichotomy informs both policy, and perceptions of policy.
Analyses of the future of Afghanistan are no exception. Some influential
analysts see Pakistan as a problem facing Indo–US plans for
Afghanistan.141 Indian–Pakistani tensions142 pose major challenges to post-
2014 Afghanistan.143 Perceived Chinese backing of Pakistani unhelpfulness
could trigger countermeasures by US allies.
Afghans accused Pakistan of preventing trade expansion with India using
transit across Pakistani territory in breach of the 2010 Afghanistan-Pakistan
Transit Agreement.144 Pakistan accused Afghan and US-led forces of
allowing Pakistani Taliban militants to operate freely from Afghan
territory.145 These disputes notwithstanding, broader security dynamics are
changing. Parallel to Sino– Afghan–Pakistani exchanges,146 in a dramatic
shift, Pakistan extended a hand to Afghanistan’s hitherto hostile Northern
Alliance. Foreign Minister Hina Khar met Tajik, Uzbek and Hazara leaders
in Kabul in February 2012. Prime Minister Raja Pervaiz Ashraf did so in
July. Military and intelligence officers, too, made similar contacts.147
Pakistan has cooperated with America to identify Pashtun and non-Pashtun
Afghan politicians amenable to collaborating on fashioning Afghanistan’s
post-invasion future. America’s support for Pakistan’s claim of the Durand
Line border’s validity, Afghan anger notwithstanding,148 certainly
moderated Pakistani fears of a US-endorsed Afghan–Indian double-
envelopment, changing its security calculus.149 More than China’s growing
power, shared Pakistani, American, Indian and Chinese interests in future
Afghan stability may have encouraged this shift.150
Until recently, Afghan–Indian friendship counterbalanced Afghan–
Pakistan antipathy, long predating China’s ‘rise’. This dichotomy is
manifest in the ambivalence with which Pakistan views the late Pashtun
politician Abdul Ghaffar Khan, a pre-Partition Congress leader and Gandhi
acolyte, and his Khudai Khidmatgar organisation.151 While opposing
Pakistan’s UN-membership, Afghanistan signed a Treaty of Friendship with
India in September 1950. When Pakistan joined US-led alliances, India
opened consulates in Kandahar and Jalalabad. Many Afghan leaders
including Hamid Karzai were educated in India, while others went to
Pakistan. Pashtun polarisation over the Durand Line divide challenges
Pakistan with validational, even existential, insecurity. Karzai’s pursuit of
strong relations with Delhi attracted Indian investments worth $2 billion; in
2011, Afghanistan signed a Strategic Partnership agreement with India,
preceding one with America. In 2012, Karzai offered Indian investors ‘a
better platform’ than he did Chinese ones.152 Delhi countered Chinese
economic engagement with PSA states with its own investment plans.153
With NATO/ISAF withdrawal approaching,154 Afghan–US tensions155
are likely to colour the security milieu. However, Afghanistan is not the
driver of Indo–US,156 or Indo–US–Japanese,157 strategic collaboration;
China is.158 Sino– Indian competition and elemental Indo–Pakistani rivalry,
too, colour PSA diplomacy.159 Still, a consensus on Afghanistan is creating
space for Sino–US–Indian–Pakistani cooperation. Although Indo–US
collaboration, expanded to an Indo–US–East Asian strategic triangle in a
corollary of Washington’s ‘Asian pivot’, tacitly balances China,160
Washington’s PSA policy does not formally counter China’s influence.
Towards Pakistan, US policy ‘supports the core US national security
objective to disrupt, dismantle, and defeat Al Qaida, as well as to deny safe
haven to it and its affiliates in the region’.161 Notwithstanding diametrically
opposite stances towards China, and recrimination over a series of dramatic
incidents since January 2011, US–Pakistan security cooperation
continued.162 China did not figure in that discourse.
Pakistan was also looking to expand its strategic autonomy and extend
leverage by improving relations with Russia. During his 2011 visit to
Moscow, Zardari signed several Memoranda of Understanding on energy
and transport links, inviting President Putin to visit Pakistan. Although
Putin cancelled his trip citing a lack of progress in project-
implementation,163 Foreign Minister Sergei Lavrov and Pakistan’s Army
Chief, General Ashfaq Kayani, exchanged visits, symbolising active
engagement.164 Fluidity, triggering Indian anxiety,165 could grow.
US policy towards Sri Lanka stresses ‘respect for its independence,
sovereignty, and moderate nonaligned foreign policy; support for the
country’s unity, territorial integrity, and democratic institutions; and
encouragement of its social and economic development’.166 Following
Colombo’s 2009 victory over the LTTE, in a tacit critique of Colombo’s
Tamil policy, Washington urged ‘ethnic reconciliation’.167 America
suspended military training assistance over human-rights differences,168 but
in 2012, Washington and Colombo broached defence cooperation.169 It is
not clear if this shift was triggered by Defence Minister Liang Guanglie’s
visit to Colombo en route to Delhi; however, Western critique of Colombo’s
human-rights record did boost Sri Lanka’s interest in China.170 Liang
stressed the ‘great importance’ Beijing attached to developing military
relations with South Asian neighbours, pledging $100 million towards Sri
Lankan soldiers’ welfare, but denied targeting any ‘third party’.171
Indian anxiety related to Colombo’s efforts ‘to take advantage of the
prevailing [Sino–Indian] competition’,172 and Sino–Lankan cooperation.173
Indian strategists note, Sri Lankan fear ‘of India as a potential threat’ did
not abate ‘even in the post-LTTE scenario’.174 Analyses of triangular
relations exposed concerns that all three parties overplayed their hands175
while acknowledging Indo–US collaboration may have triggered Sino–PSA
cooperation.176 To assuage Indian anxiety, influential minister Basil
Rajapaksa refuted rumours that China might train Lankan military officers,
insisting Colombo looked to Delhi ‘in a much bigger way’ than it did
Beijing.177 Sri Lanka invited the Indian Army Chief, General Bikram Singh
to boost defence cooperation,178 but failed to resolve disputes.179
America considers Bangladesh ‘a key strategic partner in South Asia’,
with the focus on ‘development, countering violent extremism, assisting
international peacekeeping, and improving regional connectivity’.180 Keen
to advance ties, the two parties launched a ministerial-level ‘Partnership
Dialogue’,181 marking a possible shift in US stance established in April
2004.182 Since including Bangladesh in its Foreign Military Financing
Scheme in 2005, Washington has helped Bangladesh’s Air Force,
Coastguard and Special Operations Forces with non-lethal hardware.183
PACOM units have exercised with Bangladeshi armed forces on post-
disaster relief scenarios, and expanded training exchanges.184 Against the
backdrop of Bangladeshi elite polarisation over Sino–Indian dynamics,185
Indian media reported Secretary Clinton as asking Bangladesh for base-
facilities near Chittagong for the US 7th Fleet to counter growing Chinese
maritime influence.186 Official US denials did not end the controversy;
roiled waters were only calmed after the Commander of the 7th Fleet
himself denied any such US plans.187
 China, for its part, supplemented its military-supplier’s role with
infrastructure-support, investment and trade. In FY 2011/12, Bangladesh
exported goods worth $320 million to China, while imports totalled $5.9
billion.188 Partly to reduce this imbalance, China planned to boost
investments in Bangladesh. Hasina’s 2010 visit to New Delhi generated
much excitement as the governments pledged to dramatically improve
commercial, communications, energy and security cooperation. However,
her subsequent visit to China ‘dampened Indian enthusiasm’.189 Conscious
of the delicacy of Dhaka–Beijing– Delhi dynamics, Bangladeshis sought a
balanced stance which does ‘not pursue any policy for promoting its
friendly relations with India at the cost of its relations with China and vice
versa’.190 Delhi’s invitation to Khaleda Zia reflected efforts to build
bipartisan Bangladeshi consensus on stable Indo–Bangladeshi relations.191
However, in early 2013, when against the backdrop of violent protests
against the sentencing of senior Islamist leaders to death on war-crimes
charges, she declined to call on the visiting Indian president, media
commentaries in India underscored strongly dissonant undercurrents.192
As an academic exercise, it might be helpful to assess PSA relations with
China from a counterfactual perspective: what if the four states enjoyed
good relations with India? Afghanistan has traditionally enjoyed excellent
relations with India and has had serious differences with Pakistan since
1947. Its relationship with China is unconnected to its ties to India and this
particular premise is not applicable to Sino–Afghan interactions. For
Pakistan, balancing needs vis-à-vis India is a key driver of its approach to
China. Had Indo–Pakistani relations been friendly rather than adversarial,
pressures for fashioning countervailing linkages would have been absent.
Security ties formalised under the 2005 alliance would have been
unnecessary. Sri Lanka and Bangladesh, too, suffer from similar, if less
acute, insecurity vis-à-vis India shaping their relations with China.
However, their records are far more mixed. Colombo and Dhaka have had
treaty relations with Delhi involving security collaboration but these have
not mitigated more profound and lasting insecurities. Had India been
perceived as a friendly rather than an occasionally threatening neighbour,
they too might not have felt driven to fashion as strong security ties to
China as they actually have.
Conclusion
Facts challenge neat, linear, causal assertions of action–reaction dialectics
shaping PSA–China interactions. While Pakistan’s relations with China and
India have sharply contrasted since 1963, that is not the case with
Afghanistan, Sri Lanka and Bangladesh, whose relations with both powers
have often been close. If a pattern in Afghan, Bangladeshi, Pakistani and Sri
Lankan discourses on China is apparent, patterns are less clear in their
relations with India. The former’s China policies did not dramatically
change following China’s rapid growth, nor is there evidence that they have
good relations with China because of poor relations with India. Their
China-diplomacy is, therefore, neither explained solely as their response to
China’s recent ‘revitalisation’, nor to their assessments of self-interest vis-à-
vis Sino– Indian competition, although the latter did help shape Pakistani
policies.193
PSA states are weak actors at varied stages of state-consolidation, with
contending national mythologies still evolving competing narratives.
Domestic turbulence and elite-insecurity shape defence-diplomacy, security
affiliations and approaches to great powers. Power asymmetries among
regional and external actors and a history of covert collaboration colour
perceptions and policy. The global complicates the regional. Afghan fears of
Pakistan, Pakistani fears of India, Sri Lankan and Bangladeshi ambivalence
towards India, Indian anxiety over Chinese intentions, and Sino-centric
Indo–US tacit collaboration reinforce an insecurity complex. Sub-systemic
volatility is reinforced by systemic transitional fluidity, with a triangular
Sino–US–Indian power-hierarchy superimposing a dynamic overlay.
Linear, first-order, causality cannot fully explain PSA responses to
China’s growing power. Elites assess strategic threats and options through
the prism of acute and immediate insecurities. Challenges perceived as the
most urgent and basic colour perspectives and drive policy. As actions of
stronger powers alter the perceptual milieu, elites respond to defend and
advance their vulnerable interests. Sino–US–Indian relations have changed
cyclically since 1947–49,194 and PSA approaches to them have evolved
accordingly with a view to stabilising a local equilibrium.
PSA states have obtained varying types and scales of Chinese economic,
commercial and financial assistance, and security support and assurances,
using China in tacit external balancing against key insecurities, while
maintaining/improving relations with India and the USA. The process has
evolved over decades, being reinforced in recent years by China’s increased
capacity to help. China’s response to PSA concerns and regional fluidity has
combined strengthening PSA state-capacity-building, expanding
investments, deepening influence, and encouraging intra-regional
cooperation to address immediate anxieties. China has not led from the
front in ideational or agenda-setting terms, but has gradually consolidated
non-threatening influence.
Although PSA states enjoy mixed relations among themselves, Afghan–
Pakistani tensions being an extreme instance, their shared strategic
proximity to China is long-standing. That suggests relatively recent changes
to China’s stature may have enhanced China’s profile but not transformed
PSA views vis-à-vis China. Sri Lanka and Bangladesh, lying within the
PACOM AoR, have recently expanded security cooperation with both
America and India. Given relative weaknesses, neither has overtly
leveraged Sino-centric Indo–US anxieties to advance their strategic
interests.
China has modified its approach by encouraging Afghan–Pakistani,
Pakistani–Indian, and Indian–Bangladeshi rapprochement to reinforce
Sino–Indian relational stability. Recent Pakistani efforts vis-à-vis
Afghanistan and Russia indicate a measure of fluidity. The conjunction of
these trends may serve to ameliorate regional competitive tendencies as
PSA prepares for the partly unpredictable consequences of the US-led
military withdrawal from Afghanistan.
The above analysis suggests the following:

1 PSA states have sought to shape a relatively stable and predictable sub-
systemic strategic milieu; China’s growing power has encouraged
policy adjustments rather than trigger dramatic transformations.
2 South Asia’s sub-systemic strategic framework has been defined by an
asymmetric Indo–Pakistani bipolarity. While both countries have
engaged China overtly and covertly, their engagement was shaped by
each actor’s perception of China’s ability to redress/deepen its acutely
immediate insecurities.
3 South Asian states have fashioned and experienced an intra-regional
security dynamic stronger than the impact of China’s renascence.
China’s growing power has increased its attractions among PSA states,
without eradicating intra-sub-systemic insecurities.
4 The sub-system is geo-spatially/geo-politically Indo-centric, but in
terms of insecurity-perceptions, Pakistan, Bangladesh and Sri Lanka
often see India as a non-benign looming presence, the defining policy
driver.
5 China and the USA, pursuing both divergent and shared goals,
presented themselves as potential external balancers assuaging core
insecurities.
6 In 2012, Afghan–Pakistani and Indo–Pakistani tensions partly abated.
China’s active engagement with South Asia may have eased Afghan
and Pakistani unease vis-à-vis Pakistan and India respectively.
7 PSA states have drawn on Chinese economic-commercial, scientific-
technical and political-diplomatic support, and military matériel, to
pursue particular developmental and security objectives.
8 India has been a ‘linchpin’ in America’s Asian ‘pivot/rebalancing’;195
Sri Lanka and Bangladesh have played a marginal role in that exercise,
receiving increasing but still modest US attention.

Notes
1 Auslin, Michael, Security in the Indo-Pacific Commons: Toward a Regional Strategy,
Washington: American Enterprise Institute, 2010; Clinton, Hillary, Remarks at the Launch of the
Perth US-Asia Centre, Perth: Department of State (DoS), 13 November 2012; ‘Hillary Clinton
lauds India’s role in Indo-Pacific region, urges for (sic) increased participation’, India Today, 14
November 2012.
2 Sharma, Shriram, India-China Relations: Friendship Goes with Power, New Delhi: Discovery
Publishing, 1999; Mishra, Keshav, Rapprochement across the Himalayas, Delhi: Kalpaz
Publications, 2004, pp. 11–30; Athwal, Amardeep, China-India Relations: Contemporary
Dynamics, Abingdon: Routledge, 2008, pp. 1–14, 20–29; Sieff, Martin, Shifting Superpowers:
The New and Emerging Relationship between the United States, China, and India, Washington:
Cato Institute, 2009, pp. 77–93.
3 Karzai, Hamid, Address at the China University of Foreign Affairs, Beijing: Office of the
President, 10 June 2012.
 4 Zardari, Asif A., President’s meeting with Chinese Foreign Minister, New York: Office of the
President, 25 September 2012.
5 Rajapaksa, Mahinda, Speech made while accepting an honourary doctorate conferred on him by
the Foreign Studies University, Beijing: Office of the President, 11 August 2011.
6 Hasina, Sheikh, Address on the occasion of the commissioning of BNS Dhwaleswari and BNS
Bijoy, Khulna: Prime Minister’s Office, 5 March 2011.
7 ‘India and Bangladesh: Embraceable you’, The Economist, 30 July 2011; ‘Awami League
selling Bangladesh’s sovereignty to India, alleges BNP’, IBNLive, 23 December 2010; Malhotra,
Jyoti, ‘Last chance with Bangladesh’, Rediff News, 10 August 2012; Chakma, Bhumitra,
Bangladesh-India Relations: Sheikh Hasina’s India-Positive Policy Approach, Singapore: RSIS,
November 2012, pp. 7–18.
8 China Shipbuilding and Offshore International Corporation transferred technology for the
construction of five patrol-craft at the Bangladesh Navy’s Khulna Shipyard in 2010–13. Hackett,
James (ed.), The Military Balance, London: IISS, 2012, p. 294.
9 People’s Republic of China Foreign Office to the Counsellor, Embassy of India, Beijing, 10
July, 1958, in Notes, Memoranda, and Letters exchanged and Agreements signed between the
Governments of India and China, 1954–1959, White Paper No. 1, New Delhi: Ministry of
External Affairs, 1959, pp. 60–62; CIA, Review of Tibetan Operations, Langley, 25 April 1959,
Abilene: Eisenhower Library, Whitman File, Intelligence Matters, item-9.
10 Raghavan, Srinath, ‘Civil-military relations in India: The China crisis and after’, The Journal of
Strategic Studies, 2:1, February 2009, pp. 149–175.
11 Kapoor, Deepak, ‘India’s China concern’, Strategic Analysis, 36:4, July/August 2012, 663.
12 Indian national security discourse identifies China and Pakistan as parallel sources of threat. For
instance, ‘Given the security challenges posed by Pakistan, in particular, as well as by China, it
is but natural that Military Intelligence has devoted a disproportionate amount of focus to these
two countries’. IDSA, Net Security Provider: India’s Out-of-Area Contingency Operations, New
Delhi: Magnum Books, 2012, p. 43.
13 Pandyan, S.G., ‘Moving South Asia’s economies beyond the Indo-Pakistan paradigm in the
South Asian Regional Association for Cooperation’, Contemporary South Asia, 2:3, 2002, p.
332; Upreti, B.C., ‘Towards more meaningful cooperation’, Diplomatist, December 2011;
Durrani, Asad, ‘The agony of a subcontinent’, in Ahmad, Amjad and Pintsch, Norbert (eds), 50
Jahre Pakistan, Bonn: Deutsch-Pakistanische Forum, 1998, pp. 69–74.
14 Ali, Mahmud, The Fearful State: Power, People and Internal War in South Asia, London: Zed
Books, 1993, pp. 5–7, 191–197, 221–241.
15 Khan, Humayun, ‘President Zardari’s fourth trip to China’, Reflections, Islamabad: ISSI, 4,
2009; Rahman, Fazal-ur, ‘Traditional and emerging areas of strategic cooperation between
Pakistan and China’, Strategic Studies, XXIX: 2 and 3, 2009, p. 41–63; Khokhar, Amna,
‘Chinese Premier Wen Jiabao’s visits to Pakistan and India’, Reflections, Islamabad: ISSI, 4,
2011; Mahmood, Khalid, ‘Pakistan-China strategic relations’, Strategic Studies, XXXI: 1 and 2,
2011, pp. 9–15; Ranaweera, Charuni, Chinese Soft-Power and Implications for a Small State
such as Sri Lanka, Colombo: Lakshman Kadirgamar Institute for International Relations and
Strategic Studies, 1 January 2012; Vandergert, R.C.A., Future Directions of Sri Lanka-China
Relations Colombo: Lakshman Kadirgamar Institute for International Relations and Strategic
Studies, July 2002; Midford, Paul and de Soysa, Indra, Enter the Dragon! An Empirical
Analysis of Chinese versus US Arms Transfers to Autocrats and Violators of Human Rights,
 1989–2006, Colombo: Lakshman Kadirgamar Institute for International Relations and Strategic
Studies, October 2012; Sabur, Abdus, ‘Sino-South Asian relations: evolving trends’, BIISS
Journal, 26:3, July 2005; Hossain, Sharif and Selim, Ishtiaque, ‘Sino-Bangladesh economic
relations: prospects and challenges’, BIISS Journal, 27:4, October 2006; Islam, Muinul and
Ehsan, Mohammad, ‘Chinese democracy in the making: is it a way forward in democracy
promotion?’ BIISS Journal, 30:1, January 2009.
16 Basarat, Mustafa, ‘Chinese enterprise faces tax evasion scam’, Pajhwok Afghan News, 2
November 2006; ‘Chinese firm wins Aynak tender through flawed process’, Pajhwok, 24
October 2009; Haque, Shahidul, ‘Impact of China’s accession to WTO on textile trade of South
Asia’, BIISS Journal, 26:1, January 2005; Mead, Walter, ‘Game of Thrones: Sri Lanka emerges
as China’s new best friend’, The American Interest, 13 July 2012.
17 A semi-official analysis of India’s future strategic diplomacy only carries individual sections on
China and Pakistan. Other neighbours are mentioned seven times, including five for
Bangladesh. Khilnani, Sunil, Kumar, Rajiv, Mehta, Pratap, Menon, Prakash, Nilekani, Nandan,
Raghavan, Srinath, Saran, Shyam and Varadarajan, Siddharth, Non-Alignment 2.0: A Foreign
and Strategic Policy for India in the Twenty First Century, New Delhi: Centre for Policy
Research, 2012, pp. 13–42.
18 China’s Malacca Dilemma, as Hu Jintao noted in November 2003, reflects difficulties in
securing vital energy-and-trade flows through the Malacca/Lombok/Makassar Straits sea line of
communications (SLOC). Hostile powers can easily choke off this lifeline, but a robust Chinese
defence of it could arouse hostile reactions. Kane, Thomas, Chinese Grand Strategy and
Maritime Power, London: Frank Cass, 2002, pp. 127–128; Spinetta, Lawrence, ‘The Malacca
Dilemma’: Countering China’s ‘String of Pearls’ with Land-Based Airpower, Maxwell AFB: Air
University, June 2006; Storey, Ian, ‘China’s “Malacca Dilemma” ’, China Brief, 6:8, 12 April
2006; Ji You, Dealing with the Malacca Strait Dilemma: China’s Efforts to Enhance Energy
Transportation Security, Singapore: NUS EAI, 12 April 2007.
19 MacDonald, Julie, Donahue, Amy and Danyluk, Bethany, Energy Futures in Asia, Washington:
Booz Allen Hamilton, November 2004.
20 O’Rourke, Ronald, China Naval Modernization: Implications for US Navy Capabilities,
Washington: CRS, 1 October 2010; Spinetta, ‘The Malacca Dilemma’; Mead, Walter, ‘Strangled
by a string of pearls?’ The American Interest, 14 December 2011; Bhatia, Raashi, ‘India
encircled by China’s string of pearls?’ India Insight, Reuters, 28 July 2009; Rai, Ranjit, ‘China’s
string of pearls vs. India’s iron curtain in the Indian Ocean, it is a C3IC issue’, Frontier India, 3
October 2010; Chattopadhyay, Jagannath, ‘When China is the enemy look east – Taking control
of oil route, China surrounds India by establishing its bases all around’, Bartaman, 15 October
2010; Haniffa, Aziz, ‘India counters China’s threat by “necklace of diamonds” ’, Rediff News,
31 January 2012; Gokhale, Nitin, ‘India’s quiet counter-China strategy’, The Diplomat, 16
March 2011.
21 Dutta, Sujan, ‘Navy eyes Maldives-counter to China’s “string of pearls” plan’, The Telegraph,
20 August 2009; Chandramohan, Balaji, ‘China and India’s string of pearls’, Atlantic Sentinel, 5
October 2010. However, success appears to be partial. Malhotra, Jyoti, ‘Between Delhi and the
deep blue ocean’, The Hindu, 17 December 2012.
22
None of these ‘pearls’ compare in magnitude or sophistication to the US military base
maintained on the Indian Ocean island of Diego Garcia, nor are they nearly as numerous as
the ports to which the US Navy has access throughout the Middle East, South Asia, and
Southeast Asia.
 Scobell, Andrew and Nathan, Andrew, ‘China’s Overstretched Military’, The
Washington Quarterly, Fall 2012, p. 144
Kostecka, Daniel, ‘Hambantota, Chittagong, and the Maldives – Unlikely pearls for the Chinese
Navy’, China Brief, 10:23, 19 November 2010; Salman, Lora, ‘India’s ‘So-Called’ String of
Pearls’, Washington: Carnegie Endowment, 5 July 2012; Rehman, Iskander, ‘China’s string of
pearls and India’s enduring tactical advantage’, IDSA Comment, New Delhi, 8 June 2010.
23 Waldron, Arthur, ‘The Drivers of China’s Foreign Policy’, Defense Dossier, Washington: AFPC,
November 2012, p. 5.
24 Ali, S. Mahmud, The Fearful State: Power, People and Internal War in South Asia, London: Zed
Books, 1993, pp. 16–20.
25 Zheng Bijian, China’s Peaceful Rise: Speeches 1997–2005, Washington: The Brookings
Institution, 2005, pp. 14–19; Hu Jintao, China’s Development is an Opportunity for Asia, Boao,
24 April, 2004.
26 Gul Yusufzai, ‘Rights group warns Pakistan faces worsening sectarian violence’, Reuters, 11
January 2013; Coates, Karina, ‘In the face of ongoing insecurity in Pakistan, a 13-year-old boy
plays an active role’, UNICEF, 5 December 2012; Ashraf, Sajjad, ‘Pakistan 2012: Dicing with
Its own Future’, RSIS Commentaries, No. 201, 29 October 2012.
27 Ali, Mahmud, Cold War in the High Himalayas, New York: St. Martin’s Press, 1999, pp. 73–78,
86–88, 91–110.
28 Bhutto, Zulfikar and Chen Yi, Marshal, The Boundary Agreement between China and Pakistan,
1963, Peking: Ministry of Foreign Affairs, 2 March 1963; China-Pakistan Boundary,
International Boundary Study No. 85, Washington: Bureau of Intelligence and Research, 15
November 1968; ‘Fantasy frontiers’, The Economist, 8 February 2012; Verma, Virendra, Sino-
Indian Border Dispute at Aksai Chin: A Middle Path for Resolution, Wordpress, May 2010.
29 Indian ministers, accusing Pakistan of illegally ceding 5,180 sq. km of ‘Indian’ territory to
China, and of ‘illegal and forcible occupation of approximately 78,000 sq. km of Indian territory
in Jammu and Kashmir since 1948’, and China of illegal occupation of 38,000 sq. km of
proximate Indian territory, have said: ‘Government’s position is that this so-called “Boundary
Agreement” is illegal and invalid’. Kaur, Praneet, in ‘China-Pak “Boundary Agreement” illegal:
India’, The Indian Express, 15 July 2009.
30 Khan, Zia, ‘Pakistan our only all-weather friend: China’, The Express Tribune, 28 September
2011; Chowdhury, Iftekhar, China-Pakistan Relations: Evolution of an ‘All-Weather
Friendship’, Singapore: ISAS, 14 June 2011.
31 Ali, Mahmud, US-China Cold War Collaboration, 1971–1989, New York: Routledge, 2005, pp.
18–28.
32 Ibid., pp. 176–178.
33 Interviews with Chinese analysts, London, December 2003; Shanghai, April 2004; Kunming,
October 2009; Beijing, October 2010.
34 Ali, Mahmud, US-China Relations in the ‘Asia-Pacific’ Century, New York: Palgrave
Macmillan, 2008, p. 138.
35 ‘Chinese, Pakistani Presidents hold talks’, People’s Daily, 21 December 2001.
36 Ambassador Liu Jian, Address on the Occasion of China’s National Day, Islamabad: Embassy
of the People’s Republic of China, 1 October 2012.
37 Haqqani, Hussain, in Afridi, Jamal and Bajoria, Jayshree, China-Pakistan Relations, New York:
Council on Foreign Relations (CFR), 6 July 2010; for a differing analysis, see Beckley, Michael,
‘China and Pakistan: Fair-weather friends’, Yale Journal of International Affairs, March 2012,
pp. 9–10.
38
For 66 years, our relationship with our immediate neighbours, save China, has not been able
to engender confidence or stability. Instead, the relationships have largely been defined by a
lack of trust, and a fear that the future will simply be a replication of the past.
Khar, Hina, Pakistan: A Transformed Regional Perspective, Address at the Asia
Society, New York, 27 September 2012.
39 Swami, Praveen, ‘Pakistan’s hot nuclear greenhouse’, The Hindu, 5 November 2012; ‘Analysts:
Fear of India drives Pakistani support for militants’, Voice of America (VOA), 17 May 2011;
‘Pakistan and India: A rivalry that threatens the world’, The Economist, 19 May 2011. Tensions
persist amidst a diplomatic thaw: Burke, Jason and Boone, Jon, ‘India and Pakistan trade
accusations after Kashmir border skirmishes’, The Guardian, 10 January 2013; Wright, Tom,
‘India, Pakistan tensions rise over Kashmir killings’, The Wall Street Journal (WSJ), 9 January
2013.
40 ‘Sino-Pakistani relations cannot be truly understood without mentioning the India factor – India
as a common enemy of China and Pakistan’. Akhtar, Shahzad, ‘Sino-Pakistani relations: an
assessment’, Strategic Studies, Islamabad, XXIX: 2 and 3, 2009, p. 82.
41 Parker, Elizabeth and Schaffer, Teresita, India and China: The Road Ahead, Washington: CSIS,
1 July 2008, p. 3.
42 Hackett, James (ed.), The Military Balance, London: IISS, 2012, pp. 272–274.
43 Hatf-3/Ghaznavi and Shaheen SRBMs derived from Chinese M-11/M-18s. Centre for
Nonproliferation Studies, Country Profiles: Pakistan-Missile, Monterey: Institute of
International Studies, 2011.
44 Ming Zhang, China’s Changing Nuclear Posture: Reactions to the South Asian Nuclear Tests,
Washington: Carnegie Endowment for International Peace, 1999, p. 7; Kux, Dennis, The United
States and Pakistan 1947–2000: Disenchanted Allies, Baltimore: Johns Hopkins University
Press, 2001, pp. 172, 224.
45 Kan, Shirley, China and Proliferation of Weapons of Mass Destruction and Missiles,
Washington: CRS, 8 February 2006, p. 3.
46 More than 1,775 of Pakistan’s 2,400 tanks are Chinese-supplied T-59, T-69 and T-85 models;
265 al-Khalid MBTs use Chinese technology. Hackett, The Military Balance; Luo Zhaohui, New
China’s Foreign Policy and China-Pak Relations, Address at the ISSI, Islamabad, 1 October
2009; Pakistan ordered Chinese MRAP vehicles in 2012. Ansari, Usman, ‘China and Turkey
battle for sales in Pakistani Arms Fair’, Defence News, 10 November 2012.
47 Three Type-054 guided-missile frigates with a fourth built in Karachi; four more ordered in
2012; one Azmat- class frigate built in China with the second built in Pakistan; one Fuqing-
class fleet oiler; C-802 anti-ship cruise missiles. Hackett, The Military Balance.
48 Of 453 combat aircraft, 156 are versions of F-7, JF-17, FT-7 and FT-5 models; more than 150
JF-17 joint-production fighters and 4 KJ-200 Airborne Early Warning aircraft on order in 2012;
CSA-1 SAMs; PL-12 BVR AAMs for JF-17s on order in 2012. Hackett, The Military Balance.
49 Afridi and Bajoria, China-Pakistan Relations.
50 Akhtar, ‘Sino-Pakistani relations’, pp. 79–80.
51 Ibid., p. 81.
52 Luo Zhaohui, New China’s Foreign Policy and China-Pak Relations.
53 Treaty of Friendship, Cooperation and Good Neighbourly Relations between the People’s
Republic of China and the Islamic Republic of Pakistan, Beijing: Ministry of Foreign Affairs of
the People’s Republic of China (MOFAPRC), 5 April 2005.
54 ‘Eight Gomal Zam Dam workers kidnapped’, The News, 16 August 2012; Haider, Kamran,
Taliban claim kidnap of two Chinese in Pakistan, Reuters, 2 September 2008.
55 Press Trust of India (PTI), ‘Radical students in Pak kidnap Chinese for “unislamic” acts’, The
Times of India (TOI), 23 June 2007; Tran, Mark, ‘Pakistan mosque siege’, The Guardian, 11
July 2007.
56 Zahra-Malik, Mehreen, New Pakistan Taliban chief emerging, will focus on Afghan fight,
Reuters, 6 December 2012.
57 Reuters, ‘6 security personnel killed in attack on Gwadar check post’, The Express Tribune, 21
July 2012; Shahid, Saleem, ‘Militants greet Ramazan with attacks: Gwadar raid kills 7 coast
guards’, Dawn, 22 July 2012.
58 Located 533 km west of Karachi and 120 km east of the Pakistan–Iran border, Gwadar was an
Omani enclave for over two centuries. In 1954, a US survey urged the construction of a deep-
sea port here for Pakistan’s economic development. Pakistan bought the enclave in 1958,
building a mini-port in 1988–92. Following studies by Western consultants, Islamabad approved
the construction of a deep-sea port in December 1995, but took no action. In May 1999,
Islamabad inexplicably declined China’s offer of financial and technical assistance. In May
2001, General Musharraf secured Premier Zhu Rongji’s assurances of aid, but as America
prepared to mount Operation Enduring Freedom, with Pakistan an operational and logistical
hub, Beijing suspended its activities. Musharraf and Vice-Premier Wu Bangguo presided over
the groundbreaking ceremony in March 2002. In 2007, with Beijing showing little interest, Port
of Singapore Authority (PSA) won the bid to manage the port for 40 years, opening it in March
2008. Rizvi, Zia, ‘Gwadar port: “history-making milestones” ’, Dawn, 14 April 2008; Budhani,
Azmat and Mallah, Hussain Bux, Mega Projects in Balochistan, Karachi: Collective for Social
Science Research, March 2007; Ministry of Ports and Shipping, Yearbook: 2009–2010,
Islamabad: Government of Pakistan, 2010, pp. 24–25; Kaplan, Robert, ‘Pakistan’s Fatal Shore’,
The Atlantic, May 2009.
59 Bokhari, Farhan and Hille, Kathrin, ‘Pakistan turns to China for naval base’, The Financial
Times (FT), 22 May 2011.
60 Dasgupta, Saibal, ‘China rejects Pakistan’s naval base request’, TOI, 24 May 2011.
61 AFP, ‘Pakistan approves Gwadar port transfer to China’, Dawn, 30 January 2013; Bokhari,
Hille, ‘Pakistan in talks to hand port to China’, FT, 30 August 2012.
62 Mead, Walter, ‘China to add Pakistan’s Gwadar Port to string of pearls’, The American Interest,
31 August 2012; Fazl-e-Haider, Syed, ‘A great game begins as China takes control of Gwadar
port’, The Nation, 7 October 2012; Miglani, Sanjeev, ‘India and China’s rivalry, and a tale of
two ports’, Reuters, 25 March 2011.
63 PTI, ‘China confirms takeover of Pak’s Gwadar port’, TOI, 4 September 2012; Hussain, Aftab,
‘Gwadar cooperation opens up Central Asia to global marketplace’, Global Times, 16 October
2012; Hussain, Aftab, ‘Delhi need not worry over Gwadar deal’, Global Times, 21 February
2013; Ali, Ghulam, ‘China’s strategic interests in Pakistan’s port at Gwadar’, EAF, 24 March
 2013; Shu Meng, ‘Gwadar Port move being seen through skewed lens’, Global Times, 1
February 2013.
64 The China-Pakistan Friendship Highway (KKH), Islamabad: Associated Press of Pakistan, 29
July 2011.
65 Rahman, Fazal-ur, ‘Pak-China economic relations: Constraints and opportunities’, Strategic
Studies, XXVI: 2, Summer 2006, pp. 53–72.
66 Constable, Pamela, ‘Suicide bombers strike near US base in Kabul, killing 2 guards’, The
Washington Post, 21 November 2012; Witcher, Tim, ‘UN orders global sanctions against
Haqqani network’, AFP, 6 November 2012; Shalizi, Hamid and Harooni, Mirwais, ‘Afghan
militants say bomb revenge for film; 12 dead’, Reuters, 18 September 2012; Harooni, ‘Teenage
bomber kills six near NATO headquarters in Kabul’, Reuters, 8 September 2012; Nissenbaum,
Dion, Sultani, Ziaulhaq and Totakhil, Habib, ‘Karzai says US coalition failed as Kabul cleans
up’, WSJ, 16 April 2012.
67 Report on Progress toward Security and Stability in Afghanistan, Washington: DoD, December
2012, pp. 1–2, 8–9; Sopko, John, Afghan National Security Forces Facilities: Concerns with
Funding, Oversight, and Sustainability for Operation and Maintenance, Washington: Special
Inspector General for Afghan Reconstruction, 30 October 2012, pp. 5–8; Felbab-Brown, Vanda,
Aspiration and Ambivalence: Strategies and Realities of Counterinsurgency and State-building
in Afghanistan, Washington: Brookings, 2012, pp. 1–21.
68 Ali, Mahmud, US-China Cold War Collaboration, 1971–1989, pp. 176–188.
69 Malik, Mohan, Assessing China’s Tactical Gains and Strategic Losses post-September 11,
Carlisle Barracks: US Army War College, October 2002, p. 11. China provided aid worth $200
million to the Afghan resistance. Rahman, Fazal-ur, ‘Pakistan’s Relations with China’, Strategic
Studies, XIX-XX: 4 and 1, Winter and Spring 1998, p. 72.
70 Malik, Assessing China’s Tactical Gains and Strategic Losses post-September 11, p. 5.
71 Foreign Minister Tang Jiaxuan and Chinese intelligence officers carried information to
Washington. Ali, Mahmud, US-China Relations in the ‘Asia-Pacific’ Century, New York:
Palgrave Macmillan, 2008, p. 138.
72 Franks, General Tommy, Foreign Press Center Briefing, Washington: DoD, 11 April 2002.
73 President Hamid Karzai visited China in 2002, 2003, 2006, 2010 and 2012, and also met
Chinese leaders annually at the Shanghai Cooperation Organisation summits. The two foreign
ministers met more frequently.
74 Zhao Huasheng, China and Afghanistan: China’s Interests, Stances, and Perspectives,
Washington: CSIS, March 2012, pp. 1–2; Li Shaoxian and Wei Liang, ‘New Complexities in the
Middle East since 9.11’, Contemporary International Relations, Beijing: CICIR, 20: Special
Issue, September 2010, p. 31.
75 Kabul’s definition of Central Asia includes ‘China, Tajikistan, Uzbekistan, Turkmenistan, Iran,
Pakistan, India, Russia, Kyrgyzstan, Kazakhstan, Azerbaijan, Turkey, United Arab Emirates and
Saudi Arabia’. President Karzai Meets Afghan Ambassadors to Central Asia, Kabul: Office of
the President, 8 May 2012.
76 Haideri, Ashraf, ‘Seven years on, terror still threatens Afghanistan’, Pajhwok Afghan News, 11
September 2008.
77 China and Afghanistan, Beijing: MOFAPRC, 25 August 2003.
78 Salehi, Zarghona, ‘Minister mulls suing Washington Post’, Pajhwok Afghan News, 18
November 2009.
79 ‘Karzai touts business opportunities in Afghanistan’, Pajhwok Afghan News, 27 December 2007.
80 ‘Chinese firm wins Aynak tender through flawed process’, Pajhwok Afghan News, 24 October
2009.
81 Shah, M.A., ‘Terror remains a key challenge: Karzai’, Pajhwok Afghan News, 22 January 2008.
82 ‘UNSC extends NATO’s Afghan mission’, Pajhwok Afghan News, 20 September 2007;
‘Cartagena Summit: Afghanistan urged to go beyond pledges’, Pajhwok Afghan News, 4
December 2009; Shah, Mudassir, ‘West backs new peace effort: Karzai’, Pajhwok Afghan News,
25 January 2010.
83 Sharma, Raghav, ‘China’s Afghanistan policy: Slow recalibration’, China Report, 46: 3, 2010,
205.
84 Pantucci, Raffaello and Petersen, Alexandros, ‘China digs in to Afghanistan’, The National
Interest, 24 May 2012.
85 This was the highest-level Chinese visit since President Liu Shaoqi visited Kabul in 1966.
Basharaton, Hakim, ‘Kabul, Beijing sign key economic, security deals’, Pajhwok Afghan News,
23 September 2012; ‘Resources, security and strategy behind China’s interest in Afghanistan’,
South China Morning Post, 25 September 2012.
86 China has been training non-military Afghan security personnel for some years. Kuhn, Anthony,
‘China becomes a player in Afghanistan’s future’, National Public Radio, 21 October 2009.
87 ‘China, Afghanistan sign deals on security, economic cooperation’, Daily Times (Lahore), 24
September 2012; ‘Afghanistan-China sign practical plan for implementing joint strategic
statement, two cooperation agreements’, Bakhtar News (Kabul), 23 September 2012.
88 Iran, Turkmenistan, Uzbekistan, Tajikistan and Pakistan share much longer and more accessible
borders with Afghanistan than does China. However, in terms of state-capacity and influence,
China’s pre-eminence is apparent.
89 Eisenman, Joshua, China Reform Monitor, No. 995, 26 October 2012.
90 Iqbal, Humera, Pak-Afghan Ties in the Light of Pak-US Strategic Dialogue, Islamabad: Institute
of Regional Studies, November 2010, p. 1; Gul, Ayaz, ‘Pakistan says Afghanistan “overreacts”
to cross-border shelling’, VoA, 27 March 2013.
91 Monir, Makia, ‘MPs oppose border fencing’, Pajhwok Afghan News, 15 March 2006.
92 Hasan, Khurshid, ‘Pakistan-Afghanistan Relations’, Asian Survey, 2:7, September 1962, pp. 14–
24.
93 Iqbal, Pak-Afghan Ties in the Light of Pak-US Strategic Dialogue, p. 6.
94 Shalizi, Hamid and Georgy, Michael, ‘Afghanistan rules out peace deals with Haqqanis’,
Reuters, 6 November 2012.
95 Mir, Haroon, ‘The Afghanistan-Pakistan Relations’, Kabul Direct, 12 July 2010, pp. 8–10;
Associated Press of Pakistan, ‘Splintering relations? Durand Line is a “settled issue”, says FO’,
The Express Tribune, 25 October 2012.
96 ‘Karzai calls on Pakistan to end Afghan war’, Dawn, 14 June 2012.
97 Gorris, Gie, ‘Spring comes to Afghanistan when it thaws in Kashmir’, Pajhwok Afghan News, 4
May 2010; ‘India’s Afghan Policy: Beyond Bilateralism’, Strategic Analysis, 36:4, June 2012,
 pp. 569–583. India began aiding the Northern Alliance of Tajiks, Uzbeks and Hazaras against
Taliban-controlled Kabul in 1996. Sood, Rakesh, India and Afghanistan: Past and Future,
London: IISS, 5 November 2012.
98 Sharma, ‘China’s Afghanistan Policy’, pp. 206–208.
99 Syed, Baqir, ‘Time to get rid of “strategic depth” hangover: Khar’, Dawn, 3 March 2012; PTI,
‘Pak not seeking strategic depth in Afghanistan: Khar’, The Hindustan Times, 22 September
2012; Yang Hui, Major-General, PLA Director of Intelligence, to Fluornoy, Michele, in
AMEMBASSY to SECSTATE, Beijing, No. 1835, 1 July 2009.
100 China, Saudi Arabia, the UAE, Iran and Turkey played this mediatory role. ‘Karzai hails help by
Islamic, neighbouring countries’, Pajhwok Afghan News, 21 January 2007. The Beijing-driven
Pakistan–Afghanistan–China Trilateral Dialogue formalised this process. PTI, ‘Pakistan, China
back Afghan-owned peace process’, Zee News, 29 November 2012.
101 The White House, Remarks by President Barack Obama at Suntory Hall, Tokyo, 14 November
2009.
102 For Peace Council, see: ‘Afghan peace negotiators meet Pakistan Army chief’, Dawn, 13
November 2012; ‘Zardari: Pak to continue supporting Afghanistan’, Pakistan Observer, 14
November 2012; Khan, Tahir, ‘Kabul’s top negotiator seeks release of Taliban prisoners’, The
Express Tribune, 12 November 2012; Syed, Baqir, ‘Pakistan agrees to set free Taliban leaders’,
Dawn, 13 November 2012; Syed, Baqir, ‘Islamabad to help bridge Kabul-militant gap’, Dawn,
30 November 2012; AP, ‘Pakistan releases eight more Afghan Taliban prisoners’, Dawn, 31
December 2012. For Afghanistan–China diplmacy, see:
www.bakhtarnews.com.af/eng/politics/item/4134-afghanistan-china-sign-practical-plan-for-
implementing-joint-strategic-statement-two-cooperation-agreements.html.
103 In 2005, annual Chinese military and economic assistance to Sri Lanka reached $1 billion.
Smith, Neil, ‘Understanding Sri Lanka’s defeat of the Tamil Tigers’, JFQ, 49, 2010, p. 43.
104 Ali, The Fearful State, pp. 220–221.
105 By the end of 1971, Pakistan had been dismembered, East Pakistan had emerged as Bangladesh,
and Sino-US opposition notwithstanding, India appeared to be the indisputable regional
hegemon.
106 Zhou Enlai and Bandaranaike, Sirimavo, Joint Communiqué between the People’s Republic of
China and the Republic of Sri Lanka, Beijing: MOFA, 5 July 1972.
107 Revealed by The Illustrated Weekly of India, Mumbai, 17 October 1982; also, Subramanian,
T.S., ‘Cover story: Full of holes’, Frontline, 29 November–12 December 1997; Kalyanaraman,
S., ‘Major Lessons from Operation Pawan for Future Regional Stability Operations’, Journal of
Defence Studies, IDSA, 6: 3, 2012, pp. 30–32.
108 IDSA, Net Security Provider: India’s Out-Of-Area Contingency Operations, New Delhi:
Magnum Books, 2012, pp. 41–47.
109 Agencies, ‘Pak played key role in Lanka’s victory over Tamil Tigers’, The Indian Express, 28
May 2009; Gokhale, Nitin, ‘How India secretly helped Lanka destroy the LTTE’, Rediff News,
21 August 2008; Smith, ‘Understanding Sri Lanka’s Defeat of the Tamil Tigers’, p. 43.
110 ‘China, Sri Lanka set up all-round cooperative partnership’, People’s Daily, 9 April 2005.
111 ‘Sri Lankan President on State Visit to China’, Beijing: Xinhua, 28 August 2005.
112 Sri Lanka Ports Authority, Development of Port in Hambantota, 2012. Online. Available
www.slpa.lk/port_hambantota.asp?chk=4 (accessed 15 October 2012).
113 ‘China to fund infrastructure in southern Sri Lanka’, Colombo: Xinhua, 14 September 2012.
114 ‘Agreements sealed with the Exim Bank for over US $350m for major Development Projects’,
Beijing: Embassy of Sri Lanka, 6 August 2009; Rajapaksa, Mahinda, ‘Prabhakaran closed the
door on me. I wanted peace’, Tehelka Magazine, 6: 30, 1 August 2009; Jayatilleka, Dayan, Sri
Lanka’s Foreign Policy: The Way to Go, Geneva: Permanent Mission of Sri Lanka to the United
Nations, 26 August 2008; Krishnan, Sankhya, ‘India’s security dilemma vis-à-vis China: A case
of optimism or sub-optimum restraint?’ Policy Studies, 47, Colombo: RCSS, 2008; Raju, Adluri,
‘Maritime cooperation between India and Sri Lanka’, Policy Studies, 36, Colombo: RCSS,
2006.
115 Halim, Mohammad and Ahmed, Kamal, ‘Foreign Affairs’, in Zafarullah, Habib (ed.), The Zia
Episode in Bangladesh Politics, New Delhi: South Asian Publishers, 1996, pp. 127–128.
116 Ibid., p. 135; Hossain, Mohammad, ‘Foreign policy under Ziaur Rahman’, The Daily Star, 31
May 2008.
117 Halim and Ahmed, ‘Foreign Affairs’; Ali, Mahmud, Understanding Bangladesh, New York:
Columbia University Press, 2010, p. 133.
118 See note 4.
119 Shanglin Luan, ‘Chinese, Bangladeshi FMs hold talks’, Xinhua, 6 June 2006.
120 Ling Zhu, ‘New corridor opens to boost Sino-Bangladesh trade’, Xinhua, 17 November 2005.
121 Along with India, the Republic of Korea, Sri Lanka and Laos. Yang Lei, ‘China accelerates pace
on FTA establishment’, Xinhua, 4 January 2006; Shanglin Luan, ‘Tariff cuts on imports from 5
Asian nations’, Xinhua, 18 August 2006.
122 Ling Zhu, ‘Bangladesh ships apparels to China’, Xinhua, 5 February 2006; Letian Pan, ‘China
tops import source for BD’, Xinhua, 19 February 2006; Letian Pan, ‘China donates police
equipment to BD’, Xinhua, 22 March 2006; Ling Zhu, ‘China donates system to share satellite
data’, Xinhua, 25 March 2006; Liu Dan, ‘Senior CPC official meets Greek, Bangladeshi guests’,
Xinhua, 20 April 2006; Yangtze Yan, ‘DM meets Bangladeshi Army Chief of Staff’, Xinhua, 15
May 2006; Yang Lei, ‘China to aid small fishers, farmers in developing countries’, Xinhua, 18
May 2006; Yangtze Yan, ‘Bangladesh FM calls for closer co-operation between China, South
Asia,’ Xinhua, 6 June 2006; Shanglin Luan, ‘China, Bangladesh, Myanmar agree on road
connectivity’, Xinhua, 31 July 2006; Mo Honge, ‘48 Bangladeshi students get Chinese govt
scholarship’, Xinhua, 18 August 2006; Wang Yan, ‘China helps BD build digital telephone
exchange project’, Xinhua, 28 September 2006.
123 Pattanaik, Smruti, ‘Bangladesh Army: evolution, structure, threat perceptions, and its role’, in
Chandra, Vishal (ed.), India’s Neighbourhood: The Armies of South Asia, New Delhi: IDSA,
2013, pp. 29–30, 46–47; AFP, ‘Bangladesh to buy first submarines’, Capital FM News, 24
January 2013.
124 Yan, ‘DM meets Bangladeshi Army Chief of Staff’.
125 Ali, Understanding Bangladesh, pp. 266–267.
126 In early 2013, Hasina announced plans to procure several naval vessels including two
submarines from ‘a friendly country’, widely presumed to be China. See ‘Bangladesh navy to
get 2 submarines’, Asian Defence, 1 March 2013; Moss, Trefor, ‘Bangladesh eyes China arms’,
The Diplomat, 30 June 2011.
127 Huang Jingwen, ‘CPC, Bangladesh Nationalist Party to further cooperation’, Xinhua, 18
October 2012.
128 Lu Hui, ‘Senior CPC official leaves for South Asian tour’, Xinhua, 17 October 2012. Zhang
Jianfeng, ‘Senior CPC leader meets Bangladeshi PM on ties’, Xinhua, 21 October 2012; Zhang
Jianfeng, ‘Senior CPC leader vows to deepen ties with Bangladesh’, Xinhua, 21 October 2012;
ZNZ, ‘Senior CPC leader calls for closer ties with Bangladeshi political parties’, Xinhua, 21
October 2012.
129 Azad, M.A.K, and Tusher, Hasan, ‘Deep Sea Port: China offers to build it, fund it’, The Daily
Star, 28 September 2012.
130 ‘Bangladesh announces plans to acquire submarines’, Jane’s Defence Weekly, 25 January 2013.
131 A former senior official responsible for managing US relations in East Asia notes:
What began as a strategic shift to an area of the world replete with long-term US interests
has become, even to many anxious Americans, an exercise in picking new fights with a
country of 1.3 billion people undergoing painful internal transformations of its own.
Hill, Christopher, ‘Obama 2.0’, Project Syndicate, 12 November 2012
132 Bangladesh, Sri Lanka and India fall within the US Pacific Command’s area of responsibility
(AoR); Pakistan and Afghanistan lie in the US Central Command’s AoR.
133 For instance, Ambassador Li Jun’s comments in ‘High wave of Chinese investments in 3–5
years’, The Daily Star, 27 September 2012.
134 Chandra, India’s Neighbourhood, p. xxiv.
135 Security complexes as analytical models are described in Buzan, Barry, ‘A framework for
Regional Security Analysis’, in Buzan, Barry and Rizvi, Gowher, South Asian Insecurity and the
Great Powers, London: Macmillan, 1986, pp. 3–33.
136 Merrington, Louise, ‘The India-US-China-Pakistan strategic quadrilateral’, East Asia Forum
(EAF ), 11 April 2012.
137 Rahman, Khalid and Hameed, Rashida, ‘Sino-Pak Relations and Xinjiang’, Policy Perspectives,
6: 2, Islamabad, July–December 2009.
138 The White House, Joint Statement on South Asia, Beijing, 27 June 1998; The White House,
Joint Press Statement by President Obama and President Hu of China, Beijing, 17 November
2009; MacDonald, Myra, ‘Can China help stabilise Pakistan?’ Reuters, 11 December 2009;
MacDonald, Myra, ‘China-Pakistan-Afghanistan building economic ties’, Reuters, 28 April
2011; Shen Dingli, ‘India-Pakistan relations on upward swing’, 12 April 2012. Online.
Available: www.china.org.cn/opinion/2012-04/12/content_25130905.htm (accessed 25 October
2012); ‘Asif Ali Zardari, Manmohan Singh hope to take trade route to better relations’, TOI, 9
April 2012; Islam, Shahidul, ‘China-Bangladesh relations: contemporary convergence’, The
Daily Star, 25 January 2012; exchanges with Chinese analysts in Beijing, October 2010. Indo–
Pakistani relations recently improved: Maini, Tridivesh, ‘The two Punjabs: one step toward
closer cooperation?’ EAF, 14 November 2012; Joshua, Anita, ‘Nitish wins hearts in Pakistan,
narrates “Bihar growth story” ’, The Hindu, 10 November 2012.
139 ‘Karzai hails help by Islamic, neighbouring countries’, Pajhwok Afghan News, 21 January 2007;
PTI, ‘China will not risk economic ties with India for Pakistan: Ahmed Rashid’, The Economic
Times, 12 February 2012; Liang Guanglie in ‘China and India must work together: Defense
Ministry’, China Daily, 5 September 2012; PTI, ‘China’s new “Look West” policy to give
primacy to India’, Zee News, 1 November 2012; Iqbal, S.M.S., ‘Bangladesh-China relationship:
A bridge connecting China with India’, The Financial Express, 26 October 2010; Mehrotra,
Mansi, ‘Bangladesh’s economic relations with India, Pakistan and China: An overview’, Blitz,
16 December 2008.
140 Kanwal Sibal, ‘The Chinese view India blinded by own dazzle’, India Today, 3 November 2009;
B.R. Deepak, ‘A bleak view of India from China’, India Today, 16 June 2011; Manoj Joshi,
‘China’s motive remains a mystery’, India Today, 30 April 2013; Minxin Pei, ‘Dangerous
misperceptions: Chinese views of India’s rise’, Philadelphia, Centre for the Advanced Study of
India, 23 May 2011.
141 Riedel, Bruce, ‘The Pakistani challenge for India and America’, in India in Transition,
Philadelphia: University of Pennsylvania, 5 November 2012; Rogers, Paul, ‘America, India,
Pakistan, China: The next game’, Open Democracy, 7 June 2012.
142 Nelson, Dean, ‘Indian soldier “beheaded” as Kashmir dispute escalates’, The Telegraph, 8
January 2013; ‘Pakistan perceived that the country was weak compared to India, and believed
that it faced an existential threat from India’. Behuria, Ashok and Kumar, Sumita, ‘The Army of
Pakistan: Dominant by default’, in Chandra, Vishal (ed.), India’s Neighbourhood: The Armies of
South Asia, New Delhi: IDSA, 2013, p. 125.
143 Tellis, Ashley, Mathews, Jessica, Swaine, Michael, Trenin, Dmitri, et al., Is a Regional Strategy
Viable in Afghanistan? Washington: Carnegie Endowment for International Peace, May 2010.
144 ‘Afghanistan accuses Pakistan of violating bilateral transit trade treaty’, The Express Tribune, 12
October 2012.
145 The Tehrik-e-Nifaz-e-Shariat-e-Mohammadi (TNSM) militant faction which attacked the Swat
Valley in 2009 and shot the young education-activist, Malala Yusufzai, in October 2012,
operated from Afghanistan’s Kunar and Nuristan provinces where the US-led Coalition admitted
to ignoring it. ‘US forces admit Pakistani Taliban “not a priority” ’, Jane’s Intelligence Weekly, 8
November 2012.
146 ‘Pak, China, Afghanistan hold trilateral meeting’, Pakistan Tribune, 5 March 2012; APP,
‘Pakistan, China, Afghanistan pledge support to regional stability’, Beijing, 3 March 2012.
147 AP, ‘New Pakistan outreach could aid Afghan peace deal’, USA Today, 27 October 2012.
148 Siddique, Abubakar, ‘The Durand Line: Afghanistan’s controversial, colonial-era border’, The
Atlantic, 25 October 2012.
149 In November 2012, Pakistan’s Foreign Minister handed a draft ‘strategic partnership agreement’
to her Afghan counterpart setting out a framework for long-term collaboration, with both
ministers optimistic about its prospects. Pakistan Press International (PPI), ‘Pak hands over draft
of strategic partnership agreement to Afghanistan’, Islamabad, 30 November 2012.
150 Chinese perspectives on Afghanistan’s prospects in Zhang Jiadong, ‘Afghanistan no prize for
great powers after US withdrawal’, Global Times, 6 November 2012.
151 Khan’s followers opposed the Partition and, afterwards, sought Pashtun independence. A
resident of Peshawar, he was harassed by successive Pakistani governments. His trans-border
stature as the foremost Pashtun politician meant he was loved and detested in almost equal
measure. Pal, Amitabh, ‘A pacifist uncovered’, The Progressive, February 2002.
152 Karzai said:

Chinese businesses were there long before you came, five or six years ago. And they have
now taken two or three major contracts. We would like to give you a better platform. We
would like to welcome you on a red carpet and others on a grey carpet. But you need to
arrive on the red carpet.
See ‘Karzai asks India Inc. not to shy away from Afghanistan, cites earlybird China’, The
Financial Express, 10 November 2012.
153 Thomas, Thomas, ‘India gets ready to scuttle Chinese investments in neighbouring nations’, The
Hindu Business Line, 18 March 2013.
154 The White House, Joint Press Conference by President Obama and President Karzai,
Washington, 11 January 2013; Obama, Ending the War in Afghanistan and Rebuilding America,
Weekly address, The White House, 12 January 2013.
155 ‘Afghan President accuses US of violating detainee pact’, VOA, 19 November 2012; AFP,
‘Karzai condemns NATO airstrike on civilians’, The Express Tribune, 7 June 2012;
‘Afghanistan investigates NATO bombing’, CNN, 19 January 2012; Farmer, Ben, ‘US general is
sacked after criticising Afghanistan’s President Karzai’, The Telegraph, 5 November 2011;
Partlow, Joshua, ‘Karzai criticises US timeline for leaving Afghanistan’, The Washington Post,
26 August 2010.
156 Pyatt, Geoffrey, Remarks at the Brookings-FICCI Dialogue on the India-US Strategic
Partnership, New Delhi, DoS, 10 October 2012; Twining, Daniel, ‘A great game of spear and
shield’, Outlook India, 12 November 2012; Blackwill, Robert, Chandra, Naresh and Clary,
Christopher, The United States and India: A Shared Strategic Future, New York: CFR,
September 2011; Latif, Amer, US-India Military Engagement, Washington: CSIS, 2012.
157 Indo–Japanese collaboration is deepening with Vietnam’s emergence as a tacit mutual ally.
Dreyer, June, ‘China’s Drive into Asia’, Defense Dossier, November 2012, 11. The ‘Quad’
comprising the USA, India, Japan and Australia, too, has been informally revived. Twining,
Daniel, ‘China’s Overreach, America’s Opportunity’, Defense Dossier, November 2012, 13.
158 Engdahl, William, ‘Obama’s geopolitical China “Pivot”: The Pentagon targets China’, Global
Research, 24 August 2012; van Tol, Jan, Gunzinger, Mark, Krepinevich, Andrew and Thomas,
Jim, AirSea Battle: Why AirSea Battle? Washington: Centre for Strategic and Budgetary
Assessments, 18 May 2012; Patranobis, Sutirtho, ‘US, Japan plotting to play China against
India, says media report’, Hindustan Times, 4 June 2012; Gardner, Timothy and Cornwell,
Susan, ‘US exempts India, not China, from Iran sanctions’, Reuters, 11 June 2012.
159 Mohan, C. Raja, Rising Power and Enduring Paradox: India’s China Challenge, Colonel Pyara
Lal Memorial Lecture, New Delhi, United Services Institution of India, 7 September 2011;
Akbar, M.J., Indian Armed Forces and the Changing Strategic Environment, General Sinha
Memorial Lecture, New Delhi, United Services Institution of India, 21 February 2012.
160 Krishnan, Ananth, ‘India-US-Japan meet rankles China’, The Hindu, 30 October 2012.
161 Fiscal Year 2013 Budget of the US Government, Washington: Office of Management and
Budget (OMB), 13 February 2012, The Congressional Budget Justification Foreign Operations
Annex Regional Perspectives, FY2013, p. 687; Epstein, Susan and Kronstadt, Alan, Pakistan:
US Foreign Assistance, Washington: CRS, 4 October 2012, p. 23.
162 DoD, Report on Progress Toward Security and Stability in Afghanistan, p. 6; Schifrin, Nick,
‘Despite public animosity, US and Pakistan cooperate behind the scenes’, ABC News, 23
February 2012; Jamil, Mohammad, ‘Revival of Pak-US security cooperation’, The Frontier
Post, 6 August 2012.
163 Syed, Baqir, ‘Putin visit put off due to lack of progress on economic issues’, Dawn, 29
September 2012.
164 ‘Pakistan, Russia renewing ties: FM Khar’, Dawn, 4 October 2012; Aziz, Hadi, ‘Kayani given
warm welcome in Moscow’, The News Tribe, 3 October 2012.
165 Pant, Harsh, ‘Pakistan-Russia ties forging new alignments’, The Japan Times, 16 November
2012.
166 Bureau of South and Central Asian Affairs, Fact Sheet: US Relations with Sri Lanka,
Washington: DoS, 24 October 2012.
167 Ibid.
168 Kamalendran, Chris, ‘No US military training for Lanka’, The Sunday Times, 28 March 2010.
169 ‘US, Sri Lanka call for stronger defence ties’, Washington: Indo-Asian News Service, 15 August
2012.
170 ‘Sri Lanka looks east to China for funding and support’, The National, 11 March 2010.
171 PTI, ‘China funds to modernise Sri Lankan military training establishment’, The Hindu,1
September 2012. Liang was followed within three weeks by Wu Bangguo, Chairman of the NPC
Standing Committee, who formally handed over a Chinese-built container terminal to Colombo.
172 Mayilvaganan, M., ‘Defenders of the nation: Evolution and role of the Sri Lankan Army’, in
Chandra, Vishal (ed.), India’s Neighbourhood: The Armies of South Asia, New Delhi: IDSA,
2013, p. 145.
173 Parmer, Sarabjeet, ‘Islandic Hop Scotch in the Indian Ocean Region’, IDSA Comment, 15
December 2011; Das, R.N., ‘China’s foray into Sri Lanka and India’s response’, IDSA
Comment, 5 August 2010.
174 Mayilvaganan, ‘Defenders of the nation’, p. 146.
175 Iyer-Mitra, Abhijit, ‘Eying China, India strains relations with Sri Lanka’, Atlantic Sentinel, 24
March 2012.
176 Hariharan, R., Chinese Defence Minister’s Visit to Sri Lanka: An Indian Perspective, Paper No.
5206, Gurgaon: South Asia Analysis Group, 11 September 2012.
177 PTI, ‘Sri Lanka to continue to train its military personnel in India’, TOI, 3 October 2012.
178 ‘Indian Army chief to visit Sri Lanka next month’, Colombo Page, 4 November 2012. Gokhale,
Nitin, ‘Army Chief visits Colombo to further Indo-Sri-Lankan defence ties’, NDTV News, 19
December 2012.
179 PTI, ‘India calls off defence talks with Sri Lanka; protect our citizens, Colombo tells Delhi’,
TOI, 18 March 2013.
180 Bureau of South and Central Asian Affairs, Fact Sheet: US Relations with Bangladesh,
Washington: DoS, 26 October 2012. A more forthright description appears in Vaughn, Bruce,
Bangladesh: Background and US Relations, Washington: CRS, 2 August 2007.
181 Clinton, Hillary and Moni, Dipu, Joint Statement on US-Bangladesh Partnership Dialogue,
Dhaka: DoS, 5 May 2012.
182 US, British and Indian officials, meeting at Chatham House, London, were then reported to have
informally agreed on the former deferring to the latter’s advice on managing relations with PSA
states except Pakistan.
183 Shapiro, Andrew, Talks with India and Bangladesh, Washington: DoS, 24 April 2012.
184 Doolin, Richard, ‘Patriot sailors train with Bangladesh Navy’, America’s Navy, 23 March 2010;
‘United States-Bangladesh to begin Pacific Angel efforts’, Pearl Harbour: 13th Air Force Public
Affairs, 1 June 2010; ‘US Navy’s 7th fleet commander arrives in Dhaka’, The Daily Star, 16
September 2012; Quinn, Cammie, ‘Joint Bangladesh, US Air Force exercise kicks off’, Pacific
Air Forces, 23 April 2012; ‘US Army Pacific partners with Bangladesh Armed Forces’, Blitz, 30
 September 2012; Baxter, Edward, ‘Safeguard sails to Bangladesh for CARAT’, SEALIFT,
November 2012.
185 Pattanaik, ‘Bangladesh Army’, p. 29.
186 Varma, Anurag, ‘US 7th fleet base in Bangladesh?’ TOI/Times Now, 31 May 2012; ‘US naval
base in Bangladesh’, Blitz, 2 June 2012.
187 ‘No naval base in Bay of Bengal – says US navy commander’, The Daily Star, 17 September
2012; ‘US naval base in Chittagong? Indian news channel reports; US denies’, The Daily Star, 2
June 2012.
188 The Daily Star, 27 September 2012.
189 Kumar, Anand, ‘Chinese Puzzle in India-Bangladesh Relations’, IDSA Comment, 19 April 2010.
190 Uddin, Jashim and Bhuyian, Mahbub, ‘Sino-Bangladesh relations: An appraisal’, BIISS Journal,
32: 1 January 2011.
191 Sen, Gautam, ‘Begum Khaleda Zia’s visit to India’, Eurasia Review, 29 October 2012.
192 Sodhi, Simran, ‘Zia boycott, protests dominate Pranab visit’, The Statesman, 5 March 2013; ‘A
democratic, secular Bangladesh in India’s interest: President’, Zee News, 6 March 2013.
193 Ali, Mahmud, Cold War in the High Himalayas, New York: St. Martin’s Press, 1999, pp. 17–19,
47–56, 101–102, 134–139.
194 See, for instance, Ali, Cold War in the High Himalayas (1999), US-China Cold War
Collaboration (2005), US-China Relations in the ‘Asia-Pacific’ Century (2008) and
Understanding Bangladesh (2010).
195 Leon Panetta noted, ‘The fundamental challenge here is to develop India’s capabilities so that it
can respond to security challenges in this region’, going on to describe what the United States
was doing to help. Panetta, Leon, The US and India: Partners in the 21st Century, address at the
IDSA, New Delhi: DoD, 6 June 2012; Blake, Robert, The US-India Partnership in the Asian
Century, Berkeley: DoS, 21 March 2013.
7 India’s perceptions and
responses to the growth of
Chinese power
Rajeswari Pillai Rajagopalan

Introduction
This chapter provides an evaluation of Indian perceptions and responses to
the growth of China’s power. In particular, it will analyze whether the
growth in Chinese power has corresponded to ideational capabilities at the
regional and global levels. Further, an evaluation is provided on how the
growth of China’s power has affected the issues of border negotiations,
Indian Navy dominance in the Indian Ocean, and New Delhi’s standing in
Asia and South Asia in particular. This chapter also delves into the discourse
in India on the growing Chinese power in the last five years. Lastly, the
chapter concludes with a discussion on India’s responses to the rise of
Chinese power.

Chinese power and ideational capacities

Growing political, economic and military power definitely gives China the
material power resources, which are the basis for ideational power. In the
last few years, China has been attempting to promote its ideas in many
arenas, stretching from international security issues to general aspects of
international politics. One example illustrates this trend: China’s promotion
of a treaty on the Prevention of Arms Race in Outer Space (PAROS).
PAROS is something that predates China’s current power position.
Nevertheless, China’s increasing capacity has made PAROS more prominent
and relevant in the space-related areas. Back in 2000, China appealed to the
international community to deal with the issue of arms race in outer space. In
2000, China submitted a working paper on PAROS at the Conference on
Disarmament (CD), calling upon major space powers to take responsibility
to employ measures that prevent an arms race in outer space.1
Coming closer home to developments in Asia that affects India’s strategic
interests, the Chinese influence has yielded mixed results. However, these
results cannot be categorized as ideational capabilities. These are merely
reflections of growing Chinese economic and military clout that can buy
regional influence and win favor for its stance on foreign policy and strategic
issues. Developments in some of Asia’s political forums, such as the
Shanghai Cooperation Organization (SCO), and global security regimes,
such as the Nuclear Suppliers Group (NSG) and Wassenaar Arrangement
(WA), indicate that China has taken steps to threaten India’s strategic
interests. However, it is difficult to box the Chinese actions into any
ideational capabilities because its opposition to India so far have been driven
by geopolitics and historical rivalry.2 For instance, Beijing was neither
happy nor supportive of India’s membership in the East Asia Summit (EAS)
in the beginning.3 Its initial objections to India’s membership were driven by
politics because Beijing was unable to justify them with a credible argument.
Nonetheless, China has succeeded in keeping India out of another regional
grouping, the SCO, as a full member.4 Despite the Russian goodwill towards
India, China has stood firm in opposing Indian membership to the grouping.
New Delhi considers membership into these groupings significant and
believes that India should be an integral member of any of these new
groupings, particularly in Asia. Similarly, the Chinese position on the reform
of export control regimes, including the Nuclear Suppliers Group (NSG) or
Missile Technology Control Regime (MTCR), is more tactical in nature as it
is driven by the strategic objective of keeping India down. The NSG
discussions on India’s membership, for instance, have been hampered by the
huge divisiveness within the grouping with the resistance “rooted in
geopolitics – with China as the major obstacle.”5 But they have been found
unwilling or incapable of building the criteria to provide India its rightful
position.
 At a more general level, China had attempted to promote a peaceful
concept of China’s rise that leads to a harmonious East Asian international
order. However, other countries have found it difficult to accept such claims
because Chinese actions at times failed to keep up with its proclamations.
Ultimately though, two factors have limited China’s attempts to turn its
military and economic power into ideational power. One, China is not
operating in a vacuum; it is working within an established ideational order
dominated by the United States. China can push and has been pushing, but
American ideational dominance has been well established for several
decades and US military and economic power is still dominant, despite its
relative decline. If China were to assume the role of an agenda-setter, it
either has to become much stronger or there has to be a precipitous (though
unlikely) US decline. The second problem is that China’s behavior is in
conflict with its rhetoric of harmony (peaceful rise). Its Asian neighbors are
not likely to take the Chinese notion of its peaceful rise at face value when
they encounter direct Chinese military challenge.
Lastly, China still continues to benefit from the current US-dominated
international system and, therefore, it is unlikely that Beijing will seek to
change the rules of the game, as yet. Even as China and other rising powers
seek more control in the international system, it is unlikely that they will
muster the strength or wherewithal to set their own agenda.

Chinese power and its impact on India

The rise of Chinese power has affected both the economic and military
fronts but the more enduring impact is likely to be seen in the military arena.

Economic impact
India-China economic and trade ties have been growing in the last few years,
from around US$3 billion in 2000 to US$67.04 billion in FY 2012–13 (see
Table 7.1). The two-way trade is expected to reach US$100 billion by 2015.6
Nevertheless, recurring trade imbalances have continued to characterize
India-China trade relations. Reports have indicated that the trade deficit for
India has gone up from US$1.08 billion in FY 2001–02 to US$40.77 billion
in FY 2012–13.7 Despite these imbalances, trade has continued to flourish
without major hurdles. In addition to the huge trade deficit, the major
concern for New Delhi is that India continues to export mostly raw materials
while importing manufactured products. This imbalance needs to be
addressed if India wants to create counter-dependency in the economic
domain to create some leverage for New Delhi to deter conflict.8
Another area of growing Chinese presence in the Indian economic arena is
in the financial sector. Chinese banks have become key financers for many
Indian projects, particularly in the infrastructure and power sectors. This
relatively new trend in India has raised capital either in domestic markets or
in advanced Western economies. A combination of factors have prompted
this change—the global economic slump following the 2008 financial crisis,
the ability of Chinese state-owned banks to provide loans at relatively low
interest rates, and the perceptions among companies to seek Chinese
financing as the next logical step after buying machinery and related
equipment from China.9 In February 2012, Anil Ambani’s Reliance Power
took a loan of US$1.2 billion from three Chinese banks including the China
Development Bank (CDB), under the condition that it buys power
equipment from Shanghai Power Electric. Following Reliance’s move,
Delhi-based Lanco Infratech, considering how India is becoming indebted to
China for expanding their operations, sought to raise approximately US$2
billion for two new power plants from China. In a deal similar to the
Reliance one, Lanco also agreed to buy Chinese power equipment in
exchange for the CDB loan. The CDB readily offered US$600 million and
further worked with other banks to meet Lanco’s demand for US$2 billion.10

Table 7.1 India–China bilateral trade, 2008–13 (figures in US$ billion)

Source: Department of Commerce, Ministry of Commerce and Industry, Government of India.

In spite of growing trade with China, India has been concerned with some
of the unfair trade practices, particularly dumping of Chinese goods in
Indian markets. India has taken up these cases with the appropriate
authorities, with New Delhi registering the highest number of “dumping”
cases against China. A 2012 statement in the Parliament noted that India had
initiated nearly 300 anti-dumping cases between 1992 and March 2012, of
which more than half were filed against China.11
Another dispute is related to market access. Reports indicate procedural
hurdles for Indian companies in China’s lucrative market, especially in
certain niche areas such as pharmaceuticals and IT, where Indian companies
provide world-class products at competitive rates. India has a sizeable R&D
and technological base in the area of pharmaceuticals and is credited with
producing effective drugs for a number of diseases, including AIDS, at very
affordable prices. Indian pharmaceutical companies export to about 220
countries and plan to increase the exports to US$25 billion in FY 2013–14
from US$15.5 billion in FY 2012–13; an increase of 17 percent.12 Indian
pharmaceutical companies, while aggressively tapping various international
markets in the last two decades, have not been able to break into the Chinese
market. The difficulty has been attributed to strong barriers for market entry;
time-consuming processes in establishing commercial infrastructure; rigid
and opaque government regulations; and lastly, difficulties associated with
pricing. Therefore, the Chinese pharmaceutical market—on its way to
becoming the third largest after the United States and Japan in the next two
to three years—has remained a problem for Indian pharmaceutical
companies.13 IT products and services face a similar situation. While Indian
companies have made some progress, it has been very slow. For example,
Tata Consultancy Services in China, one of the top Indian IT firms, employs
only 2,000 employees as against the target of 6,000, and only generates
business of about US$100 million; this is considered particularly small for a
firm with a business size of about US$10 billion. Other IT majors such as
Infosys had a similar experience.14
A third issue involves possible links between commercial enterprises and
the military in China. Conclusive evidence of such links might have security
implications for India, particularly in sectors such as telecommunications
and infrastructure. There have also been complaints against power sector
equipment supplied by China.15
As India plans significant investments for infrastructural development,
Chinese companies with expertise and financial resources would
increasingly play a prominent role. Chen Yuan, head of CDB, speaking on
the sidelines of the SCO meeting in June 2012, noted that the bank has
already invested in projects worth US$4.4 billion in India and was looking to
further expand its presence.16 While India’s Minister of External Affairs
responded positively saying that India was “willing to create a level playing
field and total transparency in terms of international bidding, evaluation and
then ultimately decision-making,” skepticism within the national security
establishments has been a factor in India’s lukewarm response.
Despite these concerns from the security agencies, the Indian government
has been encouraging Chinese companies to invest in infrastructural projects
including dedicated freight corridors, subway lines and highway projects. It
is reported that nine Chinese companies, through joint ventures with local
partners, are engaged in six highway projects worth US$556 million in
India; three highway projects worth US$284 million are completed.17 Given
the competitive manner in which the Chinese companies function, they are
likely to secure more contracts in the future.18
Similar concerns are raised in India and elsewhere about Chinese
telecommunication giants like Huawei Technologies and ZTE Corporation.
These resulted in policies from the government of India to limit their
participation in the telecommunications sector. The Indian National Security
Council, citing intelligence reports, suggested that these two companies are
“part of the Chinese People’s Liberation Army 863 program of 1986.”19 The
fact that it was a PLA engineer who set up Huawei and that ZTE was started
by state-owned enterprises, which are linked with the Chinese Ministry of
Aerospace, raised concerns in India. While these two are private companies,
they reportedly have high-level representation from the Communist Party of
China on their governing boards. The two firms have been charged with
stealing intellectual property on massive global scale. Many Western
countries have banned these companies from supplying equipment, fearing
that these companies will insert malicious bugs or malwares into China-
made telecom equipment that would “allow them to snoop into
conversations” and “also get the ability to shut down telecom networks in
India”.20 However, as in the infrastructure sector, competitive pricing and
market forces are becoming significant factors in India’s decisions. In May
2013, the National Security Council supported the Department of Telecom’s
proposed policy to let the Chinese companies enter the Indian market for
local production of telecom gear.21
With the decision to allow more foreign participation in the telecom
sector, the central government is also undertaking some safeguarding
measures, such as setting up a testing lab in Bangalore to test imported
telecom equipment for bugs and malware.22 Despite these measures, security
analysts worry that malware or spyware can be embedded irrespective of the
place of manufacture. Therefore, India is also taking steps to strengthen
domestic research and manufacturing capabilities as a means to reduce
dependency on foreign suppliers as well as to address the security
concerns.23
Even with all these challenges in India–China economic engagement,
China’s economic impact has been quite significant for India, as it has been
for the rest of Asia, and trade continues to create mutual benefits. While
trade disputes are prevalent, territorial disputes tend to capture relatively
more public attention.

Military impact
In the military arena, India worries not only about China’s growing military
capabilities but also Beijing’s ability to rapidly employ these capabilities.
The last two decades of military modernization in China has resulted in
significant discrepancy and imbalance in force numbers and the weapon
systems between China and India; New Delhi believes this force
modernization, coupled with the upgrading of border infrastructure, has
tilted the balance towards China. In addition, the deployment of new naval
systems with force projection capabilities and modernization of missiles
with greater precision and mobility would further limit India’s options.
The new highways, road and rail links, and oil pipelines/depots
significantly enhance the ability to apply decisive military power. In addition
to the 40,000 km road network in Tibet, in recent years the province has also
established extensive rail links such as the 1,142 km link from Golmud
(Gormo in Tibetan, Qinghai province) to Lhasa (see Figure 7.1). The line
now extending to Shigatse (opened in August 2014), reaching close to the
Nathu La pass on the Indian border, would enable China to mobilize a large
number of forces by train and by road right onto Indian borders.
Additionally, China plans to extend the Golmud-Lhasa line to Nyingchi
(expected to be completed in 2013), close to the border on the Arunachal
Pradesh side, while extending it to Dali in Yunnan Province. This enables
connectivity and relocation of troops from Kunming, Dali and Kaiyuan and
to the Tibet Autonomous Region (TAR). China has also established four new
air bases in Tibet and three in southern China. Further, oil pipelines with a
total transport capacity of 5 million tonnes of oil per year have been
established between Golmud and Lhasa. All of these have had a positive
impact on Beijing’s force deployment and sustenance capabilities. In
military terms, this means that the PLA has an enhanced force application
and sustenance capability in the TAR (30–32 divisions including five to six
rapid reaction divisions; up from the current 20–22 divisions), making any
Indian retaliatory ground offensive undertaken from Arunachal Pradesh or
Ladakh harder and ineffective, at least in the initial stages.24
Figure 7.1 Map of Qinghai–Tibet Railway (source: “China Tibet Train: Train to Tibet Official
Website,” available at www.chinatibettrain.com/tibet-train-map.htm).

China already has a sizeable presence of PLA troops—about 160,000—in

Tibet, mostly on border security as well as law and order duties. With the
improved infrastructure, China would be able to amass another 100,000
troops from the central reserve in a short span of six weeks. Previously, this
mobilization needed about six months and it was not at all possible during
winter. China is now also able to shift a huge quantum of war logistics into
Tibet in a relatively short time. It has also opened several air bases and
forward airstrips near the border, all of which give China an advantage. It
has been in a position to deploy heavy-lift planes in Tibet, albeit with issues
of landing and taking off fully loaded given the altitude and weight
restrictions.25
China has deployed intermediate range ballistic missiles (IRBMs) such as
DF-4 and DF-21 in Tibet.26 In addition, there have been reports that China
may have deployed DF-31 or DF-31(A) ICBMs at the Delingha base.27
PLA’s air-mobile reserve forces are also a concern. In fact, PLA’s mobile
forces have rapid reaction forces which, when equipped with small arms and
light weapons, are capable of being air-lifted to any terrain (desert, swamp,
mountain) within ten hours after an order is issued. Such measures have
beefed up the Chinese ability to undertake short and swift operations which
have been often emphasized in Chinese military strategy since the late
1990s.28 Lastly, a modern, joint logistics system (for all the services), along
with digitized tracking of logistic assets and automated inventory control,
has strengthened China’s land warfare capabilities.
With dependence on trade for economic development as well as growing
international investment, the role of PLA Navy (PLAN) has come into focus
for protecting these overseas interests. This new mission profile has resulted
in the modernization of the Navy’s weapons, training, recruitment and
doctrine.29 The repeated confrontations between China and the United
States, Japan as well as Vietnam and Philippines in Southeast Asia indicate
that the PLAN is increasingly confident of operating in a proactive
manner.30 No country—be it the United States in the case of an intervention
on behalf of Taiwan or Japan, or India—would tolerate the ever-growing
asymmetric capabilities of PLAN, especially with the induction of a modern
arsenal of cruise missiles and anti-ship ballistic missiles.
In addition to the growing weapon systems, the strengthening of military
installations also provides a preview of PLA’s power projection capabilities
and creates concerns in various regional militaries including India, among
others. The underground Sanya submarine base in Hainan, one of the many
installations, has raised alarm bells in the region. In response to reports about
Sanya, the Indian leadership including Prime Minister and Defense Minister
underlined that New Delhi is taking all the necessary steps to secure India’s
strategic interests such as the protection of sea-lanes. Further elaborating on
Sanya, the then-chief of Indian Navy, Admiral Sureesh Mehta, noted in
2008:

Though India is not worried about Beijing building a strategic naval

base on Hainan Island in the South China Sea, it is concerned about the
numbers. Nuclear submarines have long legs [traversing anywhere
between 7,000–15,000 kilometers] it is immaterial where they are
based.31
Similarly, a recent report from the Ministry of Defense cautioned about the
Chinese navy’s “expeditionary maritime capabilities” exercised through their
nuclear-powered submarines and area denial weapons such as the DF-21D
anti-ship ballistic missiles “with deployment focus in the Indian Ocean
Region (IOR).”32
China has also made impressive advances in its aircraft carrier program.
Currently, the aircraft carrier is undergoing initial sea trials and the Navy
would need several more years to deploy a fully operational carrier battle
group and develop the ability to operate in distant seas. Nevertheless, as
China moves closer to these capabilities and deploys additional carriers,
India—which historically preferred to keep foreign navies out of the Indian
Ocean Rim (IOR)—would be forced to develop maritime counterstrategies.
Moreover, the growing Chinese presence in India’s backyard, particularly its
maritime footprint in Bangladesh, Myanmar, Sri Lanka and Pakistan—all
point to increasing worries for India, given its ability to come close to Indian
waters. For instance, a classified document named Indian Navy: Perceived
Threats to Subsurface Deterrent Capability and Preparedness, prepared by
the Integrated Defense Staff of the Ministry of Defense, identified the
Gwadar Port as “facilities that can be upgraded to naval bases.”33 It added
that the Gwadar Port would “facilitate enormous command and control
capability for prospective Chinese presence in the IOR.”
All of these developments intensify the already heated debate on China,
calling for accelerating India’s military modernization. The above-mentioned
document of the Ministry of Defense, for instance, noted with concern the
increasing number of incidents when Chinese submarines patrol beyond
Chinese waters into the IOR. Referring to data shared by the United States,
the document noted that there were at least 22 instances of Chinese attack
submarines patrolling last year, the latest instance noted in February 2013.34
Such forays are possibly an attempt to dent India’s ability to “control highly-
sensitive sea lines of communication” in IOR.35
China has for the first time aired its strategy on the Indian Ocean. Its first
350-page “blue book” defines its interests as primarily commercial.36 The
document highlights economic interests, without ruling out the potential for
conflict, stating that “no single regional power or world power, including the
United States, Russia, China, Australia, India, can control the Indian Ocean
by itself in the future world,” leaving “big powers” to jostle for power.37

Impact of growing Chinese power on border dispute

As discussed above, the rising Chinese power has political, economic and
military implications for India, yet its impact on the resolution of the border
and territorial disputes is not yet clear. The fact that India and China have
been negotiating the border issues without progress since 1981 highlights
both the complexity of issues involved and the inflexible approach toward
consensus adopted by both the sides.
The Line of Actual Control (LAC) between India and China is a matter of
perception; the Indian and the Chinese forces patrol up to areas according to
their own versions of LAC. This has resulted in several face-offs in recent
years between the patrols, the most recent was the Depsang Valley Incident
in April 2013. To their credit, there has been no incident of shooting after the
last major incident at Nathu La in 1967, except for a serious standoff
incident at Sumdorong Chu Valley in 1987 and another incident in the
Depsang Valley in April 2013. But given the increasing sense of
competition, rivalry and trust deficit that characterize relations today, this
might not hold true for the future.
In the absence of clarity on the LAC, potential conflicts driven by
misperception and hyper-nationalism cannot be ruled out. What makes the
situation precarious is the intense military deployment that China has
undertaken in the border regions in recent years. The development and
potential deployment of tactical nuclear weapons closer to the border regions
cannot be ruled out. India is also beginning to respond through military
modernization, reactivating forward airbases, and expanding the border
infrastructure. All these ongoing and potential developments on both the
sides do not bode well for the peace and stability of the region.

Chinese power: impact on India’s standing in South Asia

China has always factored India in its strategic calculus, and this has become
more pronounced in the last decade. India’s rising profile in Asia and beyond
raises concerns in China and the latter views India as a strategic competitor.
This is evident in official statements as well as anti-India rhetoric that have
increased significantly in the last decade.38 However, not listing India as a
challenge could be a deliberate omission on the part of China. Even with the
growing economic relations, the state of political and strategic tension has
the potential to erupt into limited conflicts between the two countries. In
fact, as argued by Mohan Malik,

the combination of internal issues of stability (Tibet and Kashmir),

disputes over territory, competition over resources (oil, gas, and water),
overseas markets and bases, external overlapping spheres of influence,
rival alliance relationships, and ever-widening geopolitical horizons
forestall the chances for a genuine Sino-Indian accommodation.39

Contrary to the majority discourse, the India–China rivalry transcends the

territorial dispute and can be traced to balance power dynamics40 in the
second part of the last century—1960s and 1970s.41 India has remained a
constant factor in China’s Asia policy, particularly in China’s South Asia
policy. The China–Pakistan relationship is a classic case. By helping
Pakistan on the nuclear and missile front, Beijing was able to limit New
Delhi’s strategic options in South Asia, a situation which played a key role in
preventing India from rising as China’s peer competitor in the security arena.
China’s strong ties with other South Asian countries has similar objectives
—to constrain India’s rise and influence in the region and to strengthen
Beijing’s strategic relations with “India-wary” countries. Thus, Beijing has
made significant inroads into India’s own backyard through economic and
strategic penetration into Pakistan, Bangladesh, Nepal, Sri Lanka and
Maldives. For instance, the changing dynamics of China–Sri Lanka
relations, particularly since the last phase of the war against the Liberation
Tigers of Tamil Eelam (LTTE) has created wariness in India. China engaged
Sri Lanka on a number of projects including the infrastructure and port
development projects. Of most consequence is the development of the
Hambantota port, where China could possibly set up listening-posts that
could be activated in times of conflict in the future. The second aspect is
related to China’s defence cooperation with Sri Lanka. The warehouse of the
Chinese arms supplier, Norinco in Galle, is a case in point.42 Most recently,
this relationship was further cemented when Sri Lankan President Mahinda
Rajapakse visited Beijing and agreed to a new strategic cooperative
partnership with China.43
This kind of growing congruence of interests between China and India’s
neighbors has adverse implications for India. However, of all the countries in
South Asia, Pakistan’s interests correspond most closely with China’s.
Pakistan is paranoid about India wanting to undo the 1947 partition, whereas
China remains suspicious of India’s hidden agenda in Tibet. In fact, it is their
interest vis-à-vis India that preserved their partnership and caused it to
thrive. Thus, from China’s perspective, India’s preoccupation with sub-
continental security concerns seriously undermines India’s sense of being
equal to China in the overall power hierarchy in Asia. China believes that a
one-million strong Indian army preoccupied with Pakistan on its western
front and with fighting insurgencies in various parts of the country is not
likely to stir up problems on the Tibet front.
However, India has learnt to accommodate China’s South Asia policy to a
great extent. In the larger Asian context, the rising Chinese power quotient in
fact has had a contrasting impact. While China’s growing power may have in
some ways adversely affected India, New Delhi’s profile has also witnessed
a greater visibility because states such as Japan, Taiwan, Vietnam and
Indonesia are looking for possible counterweights or potential balancing
powers to counter China. In general, the countries in the Southeast Asian
region look to India to take a more proactive role in balancing the rising
China factor.

Discourse in India on growing Chinese power

Indian discourse on China and its growing power reflects a sense of
asymmetry in perceptions, though this asymmetry is limited to the point
where India regards China as its “principal rival” and China regards India as
its “strategic rival.”44
While the perceptions regarding China have matured and gained a wider
flavor over the years, territorial issues and the 1962 war continue to
dominate the discourse, particularly within the military. The legacy of 1962
has created a victim mentality among certain sections of the Indian security
establishment, and this helps to define Sino–Indian threat perceptions. The
border issue, along with military threat perceptions, continues to have a
protracted effect on Sino –Indian relations. For instance, in December 2009,
Indian Chief of Army Staff, General Deepak Kapoor, stated that the Indian
army must prepare for a two-front war.45 Similarly the chief of Indian air
staff called attention to the growing military power of China: “China is a
totally different ballgame compared to Pakistan. . . . We know very little
about the actual capabilities of China.”46 These statements reflect the
inherent sense of vulnerability vis-à-vis the rise and posturing of China.
There are also concerns about the growing asymmetric military
capabilities, including its nuclear program and associated delivery systems.
If one were to undertake a content analysis of Indian writings on the subject
and analyze the number of times these systems are mentioned, we could
have a better sense of Indian vulnerability in this regard (see Tables 7.2 and
7.3).
Similarly, China’s pursuit of C4ISR or military space capabilities is
particularly noted. These are, however, not seen as part of the larger military
modernization but from a narrow, closer perspective of its ability to fight a
limited border war under high-tech conditions. Many in the Indian strategic
community have articulated the need for India to be proactive in this regard.

Table 7.2 References in Indian technical journals to Chinese systems and themes
Systems No. of references Themes No. of references
(Coop) missiles 20 Infrastructure 26
ASAT equipment and test 15 Space strategy 19
Su-27 14 (Coop) China–Pakistan 18
(Coop) J-10 11 Rising, development 15
DF-21 missile 9 Border issue 15
DF-31/31A missile 9 (Coop) China–South Asia 8
C4ISR 9 China, Pakistan threat 7
AL-31 engine 5 ASAT 6
J-8 5 Asymmetric warfare strategy 4
A-50 (IL-76) 4 Expansionism, hegemony 4
Source: Defence and Technology and Defence Science Journal, 1991–2009, taken from Lora Saalman,
“Divergence, Similarity and Symmetry in Sino-Indian Threat Perception,” Journal of International
Affairs, Spring/Summer 2011, Vol. 64, No. 2, available at
www.carnegieendoment.org/files/Divergence_Similarity_and_Symmetry_in_SinoIndian_Threat_Perc
eption.pdf.
Table 7.3 References in Indian strategic journals to Chinese systems and slogans
Systems No. of references Themes No. of references
(Coop) Missile 78 Border issue—History 132
(Coop) Weapon technology 50 Dissent—Tibet 75
(Coop) M-11/DF-11 24 China, Pakistan threat 67
(Coop) M-9/DF-15 17 Military/civil infrastructure 45
Tibet
Defence expenditure 13 Chance conflict—Border 35
(Coop) Artillery 13 Expansionism, hegemony 35
(Coop) Military industry 8 Dissent—Xinjiang 34
(Coop) T-59 tank 8 Separatists, terrorists 23
(Coop) T-69 tank 4 Encirclement—Kashmir 18
(Coop) T-90 tank 3 Encirclement—PRC, 14
Pakistan, US
Source: United Service Institution Journal and Indian Defence Review, 1991–2009, taken from Lora
Saalman, “Divergence, Similarity and Symmetry in Sino-Indian Threat Perception,” Journal of
International Affairs, Spring/Summer 2011, Vol. 64, No. 2, available at
www.carnegieendoment.org/files/Divergence_Similarity_and_Symmetry_in_SinoIndian_Threat_Perc
eption.pdf.

On the one hand, on maritime issues, particularly as it pertains to the

Indian Ocean, Indian analysts dismiss the idea that China is the dominant
power or is yet in an advantageous position. Many argue that India is in a
more advantageous position in terms of geography, maritime capabilities, not
forgetting its strategic partnership with the United States and other regional
maritime powers. On the other hand, China faces issues related to long-
distance deployments, disruptions to its shipping lanes or transport corridors,
and also the prevailing regional tension with the United States and other
maritime powers. This in a sense questions the underlying assumption of the
“the string of pearls” concept. It also challenges the idea that China uses
countries in South Asia to contain India while ensuring its own presence in
the Indian Ocean. Despite the talk of the Chinese encirclement of India,
there have been few credible arguments as to how the Chinese maritime
presence in the Indian Ocean presents any realistic military threat to India.
India’s power grows as its economic interests simultaneously widen and
deepen. It would want to ensure freedom of navigation in the Indian Ocean
and other international waters. As Sanjaya Baru points out, China must be
attentive to “India’s ‘core interests’ as well, especially because it has
grievously damaged at least one such interest by enabling Pakistan to
develop nuclear weapons. China’s investment in strategic assets like the
Gwadar Port in Pakistan has reinforced India’s anxiety.”47

Characterizing Indian perspectives on China

Indian perceptions about China, as with the case of views on foreign policy,
can be broadly spread over a spectrum of four schools: Nehruvian, neo-
liberal, realism and hyperrealism, and pragmatist. The Nehruvian School
argues that states and peoples can eventually be brought around to make
peace with each other and this argument is extended to relations with China
as well. Apart from the 1962 war, Nehruvians do not see China as an
imperial power that intimidates its neighbors. For instance, the approach of
former foreign secretary and national security advisor, J.N. Dixit, towards
China, could be identified with this school. He noted in 1996: “There is a
shared vision that India and China should have ties with other Asian
countries governed by the principles of equality and mutual benefit. Both
countries are opposed to great power domination and hegemonistic
tendencies in international relations.”48
In contrast, neo-liberals argue that India and China can cut a strategic deal
if they develop their economic relations. There have been several studies
arguing that economic traction between the two sides have several positive
spin-off effects on India–China relations.49 Those who see closer aligning of
Indian and Chinese positions in multilateral fora articulate somewhat similar
arguments. For instance, Swaran Singh argues: “Multilateral forums provide
China and India with a relatively neutral playground in which the two
countries have gradually begun to decipher their stronger commonality of
interests in addressing their regional/global challenges within multilateral
settings.”50
At the other end of the spectrum, we have hyperrealists with scholars such
as Brahma Chellaney and Bharat Karnad. Commenting on the 2013 border
crisis in Ladakh, Chellaney argued that the recent episode was nothing but
China’s “land grab.”51 He called the latest incident in Depsang a strong sign
of coercive diplomacy.52
Similarly, Karnad noted that India has remained passive even while China
has continued to assist India’s insurgent groups in the Northeast. He argued
that India should have activated the Tibet card while supplying strategic
missiles to countries such as Vietnam and pursuing a proactive policy with
Japan and the United States.53 He also criticized the move on the part of the
Indian government to award “larger contracts to the Chinese
telecommunications and power production and transmission companies at a
time when the PLA-owned Huawei Company, for instance, has been barred
for security reasons from most Western markets.”54
Recently, a group of scholars and practitioners—the pragmatists—taking a
middle path between the hyper-realists and the liberals have exerted a greater
influence on Indian foreign policy, including New Delhi’s engagement with
Beijing. Commenting on China’s overall foreign policy goals, one of the
China scholars from this stream of thought, Sujit Dutta, argues that the key
problem is China’s nationalism and realist strategic culture.55 He makes a
case for increased military modernization even as India continues with its
diplomacy.56
Similarly, Raja Mohan advocates a change in India’s approach towards
China. He argues that Chinese leaders “might respond more positively to a
frank discourse from (Manmohan) Singh than Delhi’s self-deceptions that
have so misled India’s Chinese interlocutors.”57
Pragmatists also argue that India should cultivate strategic partnerships
and “alliances” as a means of balancing China. There are different variants
in this school. Some have argued for closer ties with the United States, while
others have sought to establish closer partnerships with other Asian powers
and promote Asian solidarity. Rajesh Rajagopalan argues that India should
be “more willing to play the larger balance of power game in the region and
beyond.”58
There also exists a minority group of scholars and analysts who believe
that the twenty-first century will witness the dominance of India and China
in Asia and advocate that both countries should find their future together. For
instance, retired ambassadors, like M.K. Bhadrakumar, find solace in
making such arguments. On the border issue, he argues, “Given the
complexity of the issues involved, a resolution of the border problem cannot
happen overnight. But a process is under way and we can afford to give it
time to mature.”59 On some of the larger foreign policy orientations and
broader foreign policy approaches to China, Bhadrakumar argues that India
was mistaken to seek an alliance with the United States against China.60
Overall, one could say that the Indian discourse on growing Chinese
power has been mixed. The overall consensus appears to be that India should
continue to engage China and that war is not an option. A significant
majority of analysts, scholars and practitioners remain skeptical and
apprehensive of the growing Chinese power and its implications for India.
The Indian discourse also reflects the Indian uneasiness about the ever-
growing role and influence of China in India’s backyard.

India’s response to the growing Chinese power

India undertook a multidimensional response to the growth of Chinese
power. This section contains the highlights of some of these key diplomatic
and military initiatives undertaken by the Indian government in recent years,
and an analysis of the implications of these measures
On the diplomatic front, India has strengthened relations with the United
States and its allies such as Japan, South Korea, Taiwan and Australia.
Although not stated explicitly in official documents, in recent years, New
Delhi has also made attempts to bring a new vigor to its relations with
Vietnam and other China-wary countries in Asia.
The one bilateral relationship that had a great potential but remained
estranged for most of last 60 years was that of US–India relations. The end
of the Cold War, the disintegration of the Soviet Union, and various issues of
mutual interest have created the environment for Washington and New Delhi
to initiate a new phase in their relations. Nevertheless, it is the rise of China
that cleared the last vestiges of doubt and accelerated the process.
India and the United States are reluctant to admit publicly that China is
the key rationale for their closer relations, but Beijing has considered the
closer US– India relations as being motivated by China’s rise. Thus, it
vigorously opposed the quadrilateral military exercises involving Japan,
India, Singapore and the United States. Chinese opposition stopped these
exercises, yet India continued to participate in a large number of bilateral
military exercises with the countries of the original quad. Additionally, India
has also started trilateral military exercises as well as diplomatic talks with
the United States and Japan.61
India has also started military exercises with countries with which
historically it lacked close relations. Some of these new partnerships—
especially with Australia, Singapore and Japan—were partly possible
because of the special relations these countries have with the United
States.62 Equally important, India’s relationship with Vietnam has also
improved dramatically. Although India has had friendly relations with
Vietnam in the past, there has never been a military component to it. Over
the last few years, as Vietnam’s disputes with China have become more
serious, Vietnam and India have become much closer; Hanoi has offered
India privileged use of one of the key naval bases in Vietnam, Cam Ranh
Bay.
Even as India is pursuing multiple channels of diplomacy, it has been
sending mixed signals to the United States on its Asia pivot policy. While it
is supportive of the US pivot, New Delhi has to get its house in order to
manage first and foremost multiple great power relations. India has been for
long comfortable in dealing with a bipolar scenario and in pursuing a “non-
aligned” policy. The Indian government would ideally like to have a policy
that does not require it to choose between the USA and China. Getting
caught in the middle of a US– China clash could be a nightmare for India.
In the context of growing Chinese power, East and Southeast Asia are two
vital regions for India. Economic integration and security partnerships with
East and Southeast Asia are means to consolidate India’s ties with these
regions. Although India’s Look East Policy was put in place in the early
1990s, it has gained greater traction only in the last few years. India has built
economic and strategic ties with Southeast Asia. The fact that the trilateral
highway between India, Thailand and Myanmar is ready to be
operationalized in FY 2015–16 highlights that India is taking concrete steps
to establish India’s relations with regional states.63 External Affairs Minister
Salman Khurshid’s visit to Brunei for the 11th India-ASEAN Ministerial
Meeting once again highlights India’s increasing engagement with the
region.64 In June, India launched an ASEAN India Centre in New Delhi, an
indication of India’s emphasis on the region as a pillar in India’s strategic
calculus. Therefore, as China’s power continues to grow, particularly its hard
power capabilities, India will need to adjust to new partnerships while it
strengthens some of the old traditional partnerships with Russia, among
others. Managing multiple great powers will prove to be the greatest
challenge for India. However, managing them effectively will deliver both
economic and strategic results.
India has also responded in military terms. It has increased its military
budget in response to the growing military challenges posed by China, albeit
Beijing is not the only driver. In its annual report for FY 2012–13, the
Ministry of Defense said: “India remains conscious and watchful of the
implications of China’s military profile in the immediate and extended
neighborhood. India is also taking necessary measures to develop the
requisite capabilities to counter any adverse impact on its security.”65 India’s
defense budget continues to be under 3 percent of GDP; but, as a growing
economy, its spending in real terms has increased. According to official
defense budget figures, India’s defense budget has grown in actual terms
from US$10.75 billion (INR 457 billion) in 2000 to US$18.5 billion (INR
817 billion) in 2005, and US$30.6 billion (INR 1,516 billion) in 2010.66
With a steady increase in defense budget, India was able to take concrete
measures in force deployments and acquisition of new weapon systems.
India has 12 mountain divisions, two of which were created in February
2008, specifically for combat deployment in the northeastern Indian state of
Arunachal Pradesh along the Tibetan border. These divisions are designed to
conduct swift offensive operations in mountainous areas. In June 2009, the
Indian government approved the deployment of two additional army
divisions and two air force squadrons (18–20 aircraft per squadron) near its
border with China. With this new deployment in Assam, India’s troop
strength in the region will top more than 100,000. India has also been
strengthening its inventory with an eye to the requirements of the China
border. For example, it plans to induct a large number of heavy-lift and
combat-ready helicopters, all of which would have significant utility in
mountain warfare.
India has also been strengthening its air power capabilities, especially
with the induction of force multipliers, such as Airborne Warning and
Control Systems (AWACS) and mid-air refueling tanker aircraft, as well as
fourth-generation fighter jets. In June 2009, the Indian Air Force (IAF)
deployed two squadrons of Sukhoi-30 MKI aircraft in Tezpur in the
northeastern Indian state of Assam. The IAF had also proposed to deploy
more Sukhois in the nearby Chabua air force base. The airbase currently
hosts four fighters, and there are plans to increase the number gradually.
India currently has three Israeli Phalcon AWACS, which would greatly
enhance India’s ability to see and hear deep inside Chinese territory. Most
recently, the Indian government sanctioned the purchase of six mid-air
refueling aircraft, some of which will be deployed on the India–China
border. The new procurement will supplement the current fleet of Il-78s. The
new mid-air refueling aircraft would be based in Panagarh in West Bengal.
These aircraft—AWACS and refueling aircraft—deployed along with Su-30
and Mirages would provide the IAF with deep-strike capabilities.
Acquisition of these force multipliers is solely to deal with China’s military
modernization and to deter any designs from across the border to engage in a
quick limited war.
India has also been re-opening some of the airfields on the border areas.
Daulat Beg Oldi and Fukche in Ladakh (Jammu and Kashmir), which is
close to Aksai Chin and the Nyoma Advanced Landing Ground (ALG), 23
km from the border, have been reopened for IAF operations for fixed-wing
aircraft. Previously, only helicopters were possible. These measures have
both strengthened India’s aerial operations and promoted tourism in the
region. The IAF’s plan to reopen Chu Shul ALG has been shelved for the
time being. The government has also upgraded both the airstrips and
advanced landing stations along the Northeast, including those at Tezpur
(Assam), Chabua (Assam), Jorhat (Assam), Panagarh (West Bengal) and
Purnea (Bihar). The latter includes increasing the length of the runway from
9,000 feet to 11,000 feet. In 2009, the government also sanctioned raising a
5,000-strong force from the local population in Arunachal Pradesh and
Sikkim, to supplement the Indian Army effort during a crisis. This force is
modeled around the Ladakh Scouts created during the Kargil war with
Pakistan.
On the nuclear front, India has been developing Inter-Continental Ballistic
Missiles (ICBMs). While India has tested a number of intermediate- and
longer-range missiles, which are capable of reaching most of China, these
missiles are still not operational. An example is the Agni-5.
 With the increasing forays of the PLA Navy into the IOR, India’s
submarine capabilities would play a critical role in safeguarding India’s
interests. The Indian Navy currently has 13 conventional submarines and an
Akula Class nuclear submarine leased from Russia (christened INS Chakra
in the Indian Navy).67 Owing to project delays and slow defense
procurement procedures, the conventional submarine fleet is rapidly
dwindling because the replacements cannot keep up with the pace of
decommissions. While the Indian Navy has plans to build four (three to be
built at the Mazagaon Dockyard Limited and one at the Hindustan Shipyard
in Visakhapatnam), there have been delays because of “bureaucratic
wrangling” as well as the fact that the Mazagaon Dockyard is already
“overburdened.”68 The navy’s keenness to involve private sector players has
been ignored by the defense ministry.
India also has active projects to deploy nuclear-powered submarines.
These submarines can remain submerged for extended periods and be
deployed on long-range missions, proving to be invaluable assets for anti-
submarine and anti-ship as well as surveillance and reconnaissance missions.
Additionally, these same attributes, coupled with a long-range ballistic
missile, would provide secure second-strike capabilities for a country—a
critical addition for India’s deterrence capabilities.
In addition to the leased INS Chakra, the indigenously developed nuclear-
powered Arihant is currently undergoing a last set of trials. It will undergo
the harbor acceptance trials sometime later in 2013. Four of this class of
submarines are supposed to enter service in 2015, though this seems very
ambitious. All of these capabilities are meant to ensure that India is ready
with credible second-strike capabilities. Currently, India has a short-range
missile capable of being launched from underwater—this system is more a
technology demonstrator. Development of submarine-launched long-range
ballistic missiles is under active consideration. Therefore, there are plans to
develop a naval version of the long-range Agni-5. India has been
emphasizing its submarine capabilities though the progress has been slow.

Conclusion
Dealing with a rising China presents challenges for most Asian and global
powers. This is particularly so for countries like India with long-standing
disputes with China. While India has traditionally rejected balance-of-power
politics, China’s rise is forcing it to consider such measures. India’s own
growth gives it some capacity to deal with China but there is increasing
recognition that India needs to partner with other like-minded countries.
Therefore, India has taken a number of steps to build up its own military
capacities as well as to build more partnerships with other Asian countries.
Nevertheless, these steps are not easy and will depend substantially on
Chinese behavior. Indeed, it is Chinese behavior over the last few years that
had accelerated these measures. It is likely that a more cautious Chinese
policy in the future might reduce India’s effort. But because neither China’s
growth nor India’s has stabilized, it is hard to predict with any certainty how
these processes will work out.

Notes
1 “The CD and PAROS: A Short History,” UNIDIR Resources, p. 4, available at
www.unidir.org/files/publications/pdfs/the-conference-on-disarmament-and-the-prevention-of-
an-arms-race-in-outer-space-370.pdf.
2 Bhartendu Kumar Singh, “Beyond the ADB: China, India and the Global Rivalry,” Journal of the
United Service Institution of India, Vol. CXXXIX, No. 577, July–September 2009, available at
www.usiofindia.org/Article/Print/?pub=Journal&;pubno=577&;ano=281.
3 Yiping Huang and Miaojie Yu (eds), China’s New Role in the World Economy (Routledge, 2012),
p. 281 and Ashley J. Tellis, Travis Tanner and Jessica Keough (eds), Strategic Asia 2011–12: Asia
Responds to Its Rising Powers –China and India (National Bureau of Asian Research, 2011), p.
85
4 Prior to the Summit meeting in 2012, the Chinese Vice Foreign Minister Cheng Guoping was
categorical in saying, “The relevant countries should work hard towards political, legal and
technical preparations for [membership]. . . . When the conditions are ripe, the decision should be
made through consensus.” Ananth Krishnan, “Observer Countries ‘Must Work Hard’ for SCO
Membership, says China,” The Hindu, May 23, 2012, available at
www.thehindu.com/news/international/observer-countries-must-work-hard-for-sco-membership-
says-china/article3449100.ece; “Russia Backs India’s Case for SCO Membership,” Times of
India, June 10, 2010, available at http://articles.timesofindia.indiatimes.com/2010-06-
12/india/28313547_1_sco-russia-backs-india-and-pakistan.
5 Yogesh Joshi, “China Rivalry Keeping India out of Nuclear Suppliers Group,” World Politics
Review, June 14, 2013, available at www.worldpoliticsreview.com/articles/13020/china-rivalry-
keeping-india-out-of-nuclear-suppliers-group. Also see Pranab Dhal Samanta, “China Red Flags
India Move to Join NSG,” The Indian Express, July 17, 2011, available at
www.indianexpress.com/news/china-red-flags-india-move-to-join-nsg/818578.
6 Department of Commerce, Ministry of Commerce and Industry, Government of India; and
“India-China Bilateral Relations: Trade and Commercial Relations,” Embassy of India, Beijing,
available at www.indianembassy.org.cn/DynamicContent.aspx?MenuId=3&;SubMenuId=0.
 7 “India, China Take Steps to Reduce Trade Gap,” The Hindu, May 20, 2013, available at
www.thehindu.com/business/Economy/india-china-take-steps-to-reduce-trade-
gap/article4733147.ece.
8 India should not wait for the Japanese experience (regarding export of rare earth material) to
happen. Instead, it should prepare for contingencies to counter dependency.
9 While these companies have found their own reasoning, the real reason was something else.
Reliance Power, for instance, had first approached the US ExIm Bank for funding their coal
power project. Given the dynamics of the climate change debate, the United States declined to
fund any coal power project that would add to global greenhouse gas emissions. Therefore, China
approached the company and agreed to do the funding in return for the company’s agreement to
buy power equipment from Shanghai Power Electric. This trend is gaining traction.
10 James Crabtree, “India’s Lanco Turns to China for Funding,” Financial Times, November 26,
2012, available at www.ft.com/cms/s/0/856db810-37c9-11e2-8edf-
00144feabdc0.html#axzz2VzyxK0Jt.
11 The Director General of Anti-Dumping and Allied Duties (DGAD) under the Ministry of
Commerce had initiated these actions based on complaints from local industries which have been
affected by the dumping of cheap goods. The government has also taken several anti-dumping
measures against various countries, including China. For instance, in December 2012, the
government through a Gazette notification notified that it was levying “anti-dumping duty at the
rate of 60.79% on imports of choline chloride, originating in, or exported from the People’s
Republic of China for a period of five years.” For more information, refer to “Government Starts
Probe into Dumping of Solar Cells by China, US,” PTI, The Economic Times, December 2, 2012,
available at http://articles.economictimes.indiatimes.com/2012-12-02/news/35546863_1_anti-
dumping-duty-product-and-country-dgad; Lok Sabha, “Written Answers to Questions,” Fifteenth
Series, Vol. XXXI, Thirteenth Session, 2013/1934 (Saka), No. 7, Monday, March 4,
2013/Phalguna 13, 1934 (Saka), available at 164.100.47.132/debatestext/15/XIII/0403.pdf. The
customs notification details are available at the Ministry of Finance website, available at
www.eximguru.com/notifications/seeks-to-levy-anti-dumping-duty-24504.aspx.
12 “India Aims to Clock $15.5 bn Pharma Exports in FY ’13,” PTI, The Economic Times, January
17, 2013, available at http://articles.economictimes.indiatimes.com/2013-01-
17/news/36394117_1_pharma-exports-pharmaceuticals-export-promotion-council-export-target.
13 “Indian Pharma in China and the US: A Tale of Two Countries,” CII Newsletter, available at
http://newsletters.cii.in/newsletters/mailer/trade_talk/pdf/Pharma-
Tale%20of%202%20Countries.pdf.; Overseas companies cannot enter the market without a local
partner, and finding a partner and establishing marketing and distribution networks have also
posed serious challenges. Moreover, India’s drug composition submitted during the licensing
process has been compromised and drugs have been manufactured under Chinese companies’
names.
14 Ishan Srivastava, “Indian IT Companies: It’s Time for Reality Check,” Times of India, February
5, 2013, available at http://articles.timesofindia.indiatimes.com/2013-02-
05/strategy/36764304_1_china-and-japan-hong-kong-country-manager. The listing of companies
in the United States, a compilation produced by the FICCI, provides a useful indicator of how
successful the Indian companies have been in entering the markets in the United States. For
details, see FICCI, “Increasing Market Access of Indian Products and Services in USA,”
available at http://203.200.89.92/demosites/investinusa/indian-cos-us.htm.
15 Given the strategic significance of the sector, India’s Central Electricity Authority (CEA) is
checking on the performance of Chinese-supplied power equipment in response to concerns
 raised about them. Some of the plants using Chinese equipment have run into problems in the
past. Firms such as Dongfang Electric Corporation and Shanghai Electric Power Company
Limited have been supplying power sector equipment to India. Even as there are reasons, cheaper
options such as those supplied by China are finding local takers including Lanco Infratech
Limited, Reliance Power Limited, Adani Power Limited and JSW Energy Limited. For details,
see Utpal Bhaskar, “CEA Evaluating Power Generation Equipment from China,” Live Mint,
March 10, 2013, available at www.livemint.com/Industry/bmzNiUHuWyZ5sbxSLtlvCN/CEA-
evaluating-power-equipment-from-China.html.
16 Ananth Krishnan, “China Eyes Indian Infrastructure Pie,” The Hindu, June 12, 2012, available at
www.thehindu.com/business/china-eyes-indian-infrastructure-pie/article3497656.ece.
17 Deloitte and Confederation of Indian Industry (CII), Doing Business with China: Emerging
Opportunities for Indian Companies, July 2011, available at www.deloitte.com/assets/Dcom-
India/Local%20Assets/Documents/Doing_Business_with_China.pdf.
18 Some of the major projects include the one in Jammu and Kashmir, Bihar, among others. In 2011,
Chinese firm Jiangshu Provincial Transportation Engineering Group Company partnered with the
Hyderabad-based Ramky Infrastructure to develop the Srinagar–Banihal road in Jammu and
Kashmir. The joint venture implemented at a total cost of Rupees 1,625 crore which will design,
build, finance, operate and transfer the project for National Highway Authority of India (NHAI).
For more information refer to the National Highway Authority of India, Government of India,
“Projects under Implementation,” available at www.nhai.org/phase3ui.asp and Rachita Prasad,
“Ramky Infra JV ties up 1,400 crore for J&K road project,” The Economic Times, February 18,
2011, available at http://articles.economictimes.indiatimes.com/2011-02-
18/news/28615508_1_road-project-ramky-infrastructure-concession-period.
19 Thomas K. Thomas, “National Security Council Backs Go-Local Policy on Telecom Gear,” The
Hindu, May 14, 2013, available at www.thehindubusinessline.com/industry-and-economy/info-
tech/national-security-council-backs-golocal-policy-on-telecom-gear/article4715077.ece.
20 Thomas, “National Security Council Backs Go-Local Policy on Telecom Gear”; and Jayanta Roy
Chowdhury, “Telecom is Chinese PM’s Bug-Bear,” The Telegraph, May 20, 2013, available at
www.telegraphindia.com/1130520/jsp/business/story_16917075.jsp.
21 The new policy is in sync with the Department of Telecom’s policy of foreign players having to
set up local manufacturing units. This would mean that even other foreign players would be
required to establish local production units and this goes against international trade agreements.
India may have to do some balancing in this regard. Thomas, “National Security Council Backs
Go-Local Policy on Telecom Gear.”
22 The laboratory is being established in collaboration with the Indian Institute of Science,
Bangalore. The laboratory is seen as important both from a security and economic point of view
given that India imports telecom equipment worth US$10 billion annually. Chowdhury, “Telecom
is Chinese PM’s Bug-Bear.”
23 Indian government has allotted a corpus of Rupees 17,500 crore to strengthen local capacity in
the telecom sector. For details, see Shauvik Ghosh, “India to Deploy Rs. 17,500 Crore to Boost
Local Telecom Products,” Live Mint, May 16, 2013, available at
http://beta.livemint.com/Industry/7goDHbwLx4HfH97uPTgh2N/India-to-deploy-17500-crore-to-
boost-telecom-products.html.
24 For more details, see Rajeswari Pillai Rajagopalan and Rahul Prakash, “Sino-Indian Border
Infrastructure: An Update,” Occasional Paper, No. 42, Observer Research Foundation, May
2013, available at
 http://orfonline.org/cms/export/orfonline/modules/occasionalpaper/attachments/Occasional42_13
69136836914.pdf.
25 Mohan Malik, “China and India Today: Diplomats Jostle, Militaries Prepare,” World Affairs,
July/August 2012, available at www.worldaffairsjournal.org/article/china-and-india-today-
diplomats-jostle-militaries-prepare. Also see Andrei Chang, “PLA troops—about 160,000—in
Tibet,” UPI Asia Online, June 28, 2008, available at http://gangkyi.com/news_detail.php?id=756;
Dawa Tshering, “Claim on Arunachal may lead to tension or war between India and China,” The
Shillong Times, January 10, 2013, available at www.theshillongtimes.com/2013/01/10/claim-on-
arunachal-may-lead-to-tension-or-war-between-india-and-china/#uTXidsy1DCEtsl1k.99.
26 DF-4 and DF-21 in Delingha near Tibet have the potential to target various population centers in
northern India, including New Delhi. Additionally, with the PLA’s increased mobilization
capability, the 1,200-odd missiles targeting Taiwan can be shifted to the Tibetan theatre.
27 Hans M. Kristensen, “Increasing Nuclear Transparency: Using Satellite Imagery and Freedom of
Information Act to Monitor Chinese and Russian Nuclear Forces,” Presentation to Conference on
Increasing Nuclear Transparency: Using Satellite Imagery and Computers to Monitor Nuclear
Forces and Proliferators, Federation of American Scientists, Washington, D.C., June 7, 2012,
available at www.fas.org/blog/nutshell/wp-content/uploads/2012/06/Hans-Kristensen-
Brief2012_NukeTransparency.pdf.
28 The Chinese have learnt a great deal from the first Gulf War as well as from the western concept
of Revolution in Military Affairs (RMA) since the mid-1990s. See Andrew Scobell, David Lai
and Roy Kamphausen, Chinese Lessons from Other Peoples’ Wars (Strategic Studies Institute,
US Army War College and NBR, November 2011), available at
www.strategicstudiesinstitute.army.mil/pdffiles/PUB1090.pdf.
29 Lyle Goldstein and William Murray, “Undersea Dragons: China’s Maturing Submarine Force,”
International Security, vol. 28, no. 4, Spring 2004, p. 162.
30 Also the manner in which one of the senior PLA Navy officials talked to visiting USPACOM
Commander Admiral Timothy Keating about the possible division of responsibilities between
Indian and Pacific Oceans, displayed the growing Chinese confidence. Manu Pubby, “China
Proposed Division of Pacific, Indian Ocean Regions, We Declined: US Admiral,” The Indian
Express, May 15, 2009, available at www.indianexpress.com/news/china-proposed-division-of-
pacific-indian-ocean-regionswe-declined-us-admiral/459851/0#sthash.2v1JLHUV.dpuf.
31 Siddharth Srivastava, “China’s Submarine Progress Alarms India,” World Security Network, May
9, 2008, available at www.worldsecuritynetwork.com/India/siddharth-srivastava/Chinas-
submarine-progress-alarms-India.
32 Rahul Singh, “China’s Submarines in Indian Ocean Worry Indian Navy,” Hindustan Times, April
7, 2013, available at www.hindustantimes.com/India-news/NewDelhi/China-s-submarines-in-
Indian-Ocean-worry-Indian-Navy/Article1–;1038689.aspx.
33 Ibid.
34 Ibid.; “China Flexes Muscle in Indian Ocean, Navy Concerned,” PTI, Times of India, May 13,
2013, available at http://articles.timesofindia.indiatimes.com/2013-05-
13/india/39227374_1_indian-ocean-region-submarines-defence-ministry.
35 Rahul Singh, “China’s Submarines in Indian Ocean Worry Indian Navy,” Hindustan Times, April
7, 2013, available at www.hindustantimes.com/India-news/NewDelhi/China-s-submarines-in-
Indian-Ocean-worry-Indian-Navy/Article1–;1038689.aspx.
36 Ananth Krishnan, “China Details Indian Ocean Strategy and Interests,” The Hindu, June 9, 2013,
available at www.thehindu.com/news/international/world/china-details-indian-ocean-strategy-
 and-interests/article4795550.ece?css=print.
37 Ibid.
38 China’s anti-India rhetoric has been going up significantly among officials as well as among the
academic and think-tank circles. Earlier, Professor Ma Jiali of the China Institute of
Contemporary International Relations (CICIR), a government think-tank, had argued that India
should “return” Tawang (a sacred place for Tibetan Buddhists in Arunachal Pradesh) to China to
resolve the vexed border issue. Beijing could then be “magnanimous” in settling the border in the
Western and Middle Sectors of the disputed boundary. See “ ‘Return Tawang to China to resolve
boundary dispute’,” Rediff News, March 7, 2007, available at
www.rediff.com/news/2007/mar/07china.htm; In April 2009, in a provocative article entitled “A
Warning to the Indian Government: Don’t Be Evil!”, China sent a strong message to India. The
author compared the present India–China situation to that of 1962 when, the author claims, India
provoked a war with China. He noted that China today is better prepared in terms of its military
presence in Tibet and nearby regions, along with its possession of nuclear weapons. He also
contended that China believes that India has been in an aggressive mood, evident in its stationing
of more troops on the border, conduct of military exercises with various countries, and massive
arms acquisitions targeted at China. He concluded by accusing the Indian government of
“walking today along the old road of resisting China,” advising India “not to requite kindness
with ingratitude.” See Rajeswari Pillai Rajagopalan, “Is China Planning A War against India?”
Article No. 1084, Centre for Land Warfare Studies, May 2, 2008, available at
www.claws.in/index.php?action=details&;m_id=80&;u_id=19. In November 2006, just before
the visit of Chinese President Hu Jintao to India, the Chinese Ambassador to India, Sun Yuxi,
made a claim on the entire state of Arunachal Pradesh. See Brahma Chellaney, “ ‘Autocratic
China becoming arrogant’,” Times of India, November 15, 2006, available at
http://articles.timesofindia.indiatimes.com/2006-11-15/india/27795019_1_chinese-firms-india-
sun-yuxi-arunachal-pradesh. For an analysis of the Chinese reaction to India’s rise, see Mohan
Malik, “China and India Today: Diplomats Jostle, Militaries Prepare,” World Affairs, July/August
2012, available at www.worldaffairsjournal.org/article/china-and-india-today-diplomats-jostle-
militaries-prepare.
39 Malik, “China and India Today.”
40 J. Mohan Malik, “Dragon and Eagle Eye India: Nixon’s Conversations with Mao and Zhou,
1972,” Bharat Rakshak Monitor, Volume 4, Issue 4, January/February 2002, available at
www.bharat-rakshak.com/MONITOR/ISSUE4–;4/malik.html; J. Mohan Malik, “Nuclear
Proliferation in Asia: The China Factor,” Australian Journal of International Affairs, Volume 53,
Issue 1, 1999, pp. 31–41; Wang Jisi, China’s Changing Role in Asia, Atlantic Council of the
United States, January 2004, pp. 8, 14–15, available at
www.acus.org/Publications/occasionalpapers/AsiaAVangJisi_Jan_04.pdf; Waheguru Pal Singh
Sidhu and Jing Dong Yuan, China and India: Cooperation or Conflict? (Boulder, CO: Lynne
Rienner Publishers, 2003), pp. 46–47, 58–59.
41 Declassified documents from the US National Security Archives reveal the Chinese insecurities
regarding India. For instance, China’s UN ambassador Huang Hua who met Kissinger in New
York on December 10, 1971 (against the backdrop of the 1971 War) had stated:

[B]ecause if India, with the aid of the Soviet Union, would be able to have its own way in
the subcontinent, then there would be no more security to speak of for a lot of other
countries, and no peace to speak of. Because that would mean the dismemberment of and
the splitting up of a sovereign country and the creation of a new edition of Manchukuo, the
Bangladesh. . . . The Soviet Union and India now are progressing along on an extremely
 dangerous track in the subcontinent. And as we have already pointed out, this is a step to
encircle China.
William Burr (ed.), The Kissinger Transcripts: The Top Secret Talks with Beijing and Moscow,
A National Security Archive Document Reader (New York: The New Press, 1999), cited in
Malik, “Dragon and Eagle Eye India.”

Similarly, some of the official Chinese writings in the early 1960s were about India’s
hegemonic tendencies and warned that “India’s emergence as a powerful economic and military
power is not in China’s interests because acceptance of South Asia as India’s sphere of
influence would undermine China’s role and stature as the pre-eminent power in Asia”. See
Michael Pillsbury, “Japan and India: Dangerous Democracies,” in Michael Pillsbury, China
Debates the Future Security Environment (Washington: National Defense University Press,
2000), pp. 70–73.
42 Sri Lanka maintained a credit line and its forces were permitted to take items from the warehouse
as and when they need it. Lastly, a trilateral partnership that has emerged between Sri Lanka,
Pakistan and China, has negative consequences for India. The commonality of defense equipment
among them has increased defense interaction between them. India’s refusal to supply defense
items to Colombo forced Sri Lanka to look to Pakistan and China. Increasing defense cooperation
among these countries has adverse security implications for India. Pakistan emerged as a major
supplier of defense items, including tanks and light weapons. Additionally, Pakistani pilots are
thought to have flown some of the precision strikes against the LTTE leadership. Pakistan has
also been seeking to exploit the presence of the Muslim population in Sri Lanka’s East, building
mosques in the region and activating fundamentalist groups there.
43 This new partnership encompasses several important areas: trade and economic relations,
strengthened cooperation in the areas of law enforcement, security and defence, and greater
political contacts and support for each other in safeguarding sovereignty and territorial integrity.
Refer to “China, Sri Lanka Upgrade Relationship,” Xinhua News, May 28, 2013, available at
http://news.xinhuanet.com/english/china/2013-05/28/c_132415034.htm.
44 Manjeet S. Pardesi, “Understanding Chinese Perceptions of India,” IDSA Event Report, available
at www.idsa.in/event/UnderstandingChinesePerceptionsofIndia_mspardesi_310709.
45 Lt Gen. Chandra Shekhar, “Arming the Indian Defence Forces,” AGNI, 12, No. 3, April/July
2010.
46 Rahul Singh, “China Now Bigger Threat than Pakistan, says IAF Chief,” Hindustan Times, May
23, 2009, available at www.hindustantimes.com/india-news/china-now-bigger-threat-than-
pakistan-says-iaf-chief/article1-413933.aspx.
47 Sanjaya Baru, “India’s Five Thoughts on China,” Project Syndicate, March 24, 2013, available at
www.project-syndicate.org/commentary/india-and-china-at-the-brics-summit-by-sanjaya-
baru#vpe8YpXG4gkKEG14.99.
48 J.N. Dixit, “Tale of Two Neighbours: A Viable Sino-Indian Relationship has to be Based on the
Two Countries’ Strategic Concerns,” Outlook, October 23, 1996, available at
www.outlookindia.com/article.aspx?202332.
49 For example, Christopher J. Rusko and Karthika Sasikumar, “India and China: From Trade to
Peace,” Asian Perspective, Volume. 31, Issue 4, 2007, available at
www.asianperspective.org/articles/v31n4-d.pdf.
50 Swaran Singh, “Paradigm Shift in India-China Relations: From Bilateralism To Multilateralism,”
Journal of International Affairs, Spring/Summer2011, Volume 64, Issue 2, available at
 http://connection.ebscohost.com/c/articles/60435725/paradigm-shift-india-china-relations-from-
bilateralism-multilateralism.
51 Brahma Chellaney, “China’s India Land Grab,” Project Syndicate, May 5, 2013, available at
http://chellaney.net.
52 Brahma Chellaney, “Chinese Checkmate,” The Hindustan Times, May 15, 2013, available at
http://chellaney.net.
53 Bharat Karnad, “Strategic Pincer and Trojan Horses,” The Asian Age, May 23, 2013, available at
www.asianage.com/columnists/strategic-pincer-trojan-horses-484.
54 Ibid.
55 Sujit Dutta, “China’s Emerging Power and Military Role: Implications for South Asia,” in
Jonathan D. Pollack and Richard H. Yang (eds), In China’s Shadow: Regional Perspectives on
Chinese Foreign Policy and Military Development (Santa Monica: RAND Corporation, 1998),
available at www.rand.org/content/dam/rand/pubs/conf_proceedings/2007/CF137.pdf.
56 Ibid.
57 Raja Mohan, “With China, Keep It Real,” Indian Express, May 20, 2013, available at
http://m.indianexpress.com/news/with-china-keep-it-real/1117966.
58 Rajesh Rajagopalan, “India Should Build up Capabilities on Border with China, Exert Its
Influence in the Region,” The Economic Times, April 25, 2013, available at
http://articles.economictimes.indiatimes.com/2013-04-25/news/38817013_1_border-
areasincursions-actual-control.
59 M.K. Bhadrakumar, “Engaging China as a Friendly Neighbour,” The Hindu, April 10, 2008,
available at www.hindu.com/2008/04/10/stories/2008041055661000.htm.
60 Ibid.
61 India has also begun to conduct military exercises with China, although currently the largest
number of military exercises that it conducts is with the United States. Also the scope and scale
of military exercises with China are substantially different from those with the United States.
62 On the one hand, throughout the Cold War years, India had cool relations with Australia,
Singapore and Japan because it saw them as part of the western alliance, while India was non-
aligned and leaning towards the Soviet Union. On the other hand, over the last five years, India
has conducted several military exercises with these countries.
63 “India, Myanmar, Thailand Trilateral Highway May Start by FY ’16,” The Economic Times, June
6, 2013, available at http://articles.economictimes.indiatimes.com/2013-06-
06/news/39788621_1_kaladan-multimodal-transit-transport-project-myanmar-sittwe.
64 “Khurshid Heads to Brunei; Look East Policy to be Top on Agenda,” SME Times, June 29, 2013,
available at www.smetimes.in/smetimes/news/top-stories/2013/Jun/29/khurshid-heads-to-brunei-
look-east-policy-to-be-top-agenda629626.html.
65 Government of India, Ministry of Defence, Annual Report for 2012–13, available at
http://mod.nic.in/reports/AR-eng-2013/ch1.pdf. There have been debates within the Parliament
on various aspects of China, ranging from China’s plans to construct dam and divert water from
Brahmaputra and border infrastructure to Tibet and its growing military might including anti-
satellite capabilities that were demonstrated in January 2007. See Lok Sabha, “Synopsis of
Debates” (Proceedings other than Questions and Answers), Wednesday, February 27,
2013/Phalguna 8, 1934 (Saka), available at http://164.100.47.132/synop/15/XIII/supp+synopsis-
27-02-13.pdf. Also see Lok Sabha, “Unstarred Question No. 369, Answered on 23.02.2011,
 Militarization of Space,” available at http://164.100.47.132/LssNew/psearch/QResult15.aspx?
qref=101623.
66 Union Budget Speech 2005–2006, Union Budget Speech 2006–2007; Union Budget Volume II
Expenditure Budget 2006–2007, available at http://indiabudget.nic.in. Union Budget Speech
2010–2011, Union Budget Speech 2011–2012; Union Budget Volume II Expenditure Budget
2011–2012, available at http://indiabudget.nic.in, cited in George J. Gilboy and Eric
Heginbotham, Chinese and Indian Strategic Behavior: Growing Power and Alarm (New York:
Cambridge University Press, 2012), p. 100.
67 India currently has around 13 boats: 9 Russian Kilo Class (Sindhugosh), 4 German HDW-
designed diesel-electric submarines (SSK U209 Shishukumar-class). Recently, it lost a Kilo class
submarine to a fire accident. For more information on submarine capabilities, refer to “India
Submarine Capabilities,” Nuclear Threat Initiative, available at
www.nti.org/analysis/articles/india-submarine-capabilities.
68 Rahul Bedi, “INS Sindhurakshak: Indian Navy’s Submarine Woes,” BBC News, August 14, 2013,
available at www.bbc.co.uk/news/world-asia-india-23691558.
8 Canberra’s Beijing balance
Australian perceptions of and
responses to Chinese power
Rory Medcalf

Introduction
Questions about Chinese power have moved to centre stage in Australian
foreign and security policy in recent years. Attitudes may differ as to
whether a wealthy and strong China poses more opportunity than threat.
There is, however, no longer any question about whether China matters
critically in the Australian policy debate. Instead, that debate is increasingly
focused on questions about what Australia can do to manage this
fundamental change in its strategic and economic circumstances. After all,
these realities have altered dramatically in just a decade.
Today, for the first time in the nation’s history, Australia’s chief trading
partner is neither an ally, nor the ally of an ally, and does not share its
democratic outlook and values. There is no question of China’s economic
importance to Australia. China buys about a quarter of Australian exports
and has deepening links through business, migration, education and
tourism. Additionally, this change in Australia’s bilateral settings comes
against the backdrop of an increasingly contested Indo-Pacific Asia1 in
which, according to some observers, Canberra may end up having to make
a stark choice between China and the United States.2 Even if there is no
simple ‘China choice’ to be made, it is plain that Canberra can no longer be
complacent about the continued existence of what has long been a pillar of
its security: an open and stable regional order underwritten by America’s
strategic presence.
This chapter will address two basic sets of questions. First, how does
Australia – whether at the level of government or of society – perceive a
rising and increasingly powerful China? Second, how is Australia
responding? In particular, what are the options available to Australia in
responding to China’s power, and which among these options are currently
being pursued?
In short, this chapter looks at whether Australia has a China strategy.3 It
will be argued that Canberra does indeed have the rudiments of a strategy,
although big questions remain about its implementation, effectiveness and
sustainability. That strategy has two broad strands – engagement and
hedging – and the hedging strand contains several important sub-strands,
namely internal balancing (modernising Australia’s own military) and
external balancing (especially strengthening the US alliance). Each of these
hedging approaches carries its own problems and questions, particularly
about Australia’s willingness to fund an advanced military and about
whether the net effect of a strengthened US alliance can be stabilising.
The analysis in this chapter focuses on dimensions of security, strategy
and power. At its core, this refers to one country’s ability to influence, or
resist being influenced by, another. This has economic foundations and
diplomatic dimensions but rests ultimately on a nation’s ability to employ or
resist coercive force. The economic and societal dimensions of Australia–
China relations, while intrinsically important, will be referred to principally
in this strategic context; this chapter is not intended as an exhaustive look at
those topics.
The scale and pace of China’s rise – in gross domestic product, military
spending and diplomatic influence – have frequently been examined
elsewhere. This paper takes the realities of that rise as a starting point. Of
course, it is quite possible that China’s growth and power trajectory will be
interrupted. The brittleness of an authoritarian system cannot be discounted,
and a crisis of legitimacy or authority could impede or divert China’s rise.
But, like the 2012 Australia in the Asian Century White Paper, the 2013
National Security Strategy and the 2013 Defence White Paper, three recent
documents setting forth Australian official perceptions about twenty-first
century Asia, this chapter is based on the judgment that the consolidation of
Chinese power in the decades ahead is the most likely future and therefore
one for which the Australian nation needs to plan.4 At the very least, China
is almost certain to be one of the key powers influencing Australia’s future
security and prosperity this century. And China ‘is more likely to determine
Australia’s prosperity in the 21st century than any other country’.5

Australia’s interests, identity and security perceptions

As a starting to point to understanding how Australia is responding to
Chinese power, we need to understand how China is affecting Australia’s
interests. To reach that point, it is necessary first to have a sense of how
Australia defines those interests. The nation’s definition of its interests is in
part a matter of perception, so some general observations about Australian
identity and security perceptions are also offered.
Australia is an unusual country, a democracy with a relatively small
population (about 23 million as of 2013) and very large territory,
geographically close to or indeed a part of Indo-Pacific Asia yet with
historical and cultural origins in Europe. It has singular geopolitical
circumstances, which are generally secure and enviable. It is the only nation
in the world to possess an island continent, which bestows strategic depth,
vast maritime jurisdiction, and important natural resource deposits. This is
combined with a developed economy, high incomes, a stable democratic
system and a resilient and multicultural society. Australia has the world’s
thirteenth largest economy and fifteenth largest defence budget, and
identifies itself as a diplomatically active ‘middle power’ heavily engaged
in Asia. Many of these characteristics potentially equip Australia to be
prosperous and secure in the so-called Asian century, a point recently
emphasised in a major report from the Australian government.6 Australia’s
geography bestows economically advantageous proximity to Asia yet a
maritime barrier against any adversary. And to top it all, the nation has a
military and intelligence alliance with the United States.
Yet despite the nation’s seemingly secure geography and alignment,
Australian strategic culture has long contained a strong thread of insecurity.
This may have its origins in modern Australia’s beginnings as a thinly
populated British outpost near populous Asia, later exposure to great-power
rivalries and Japanese aggression in World War II, concern about
Communism during the Cold War, and proximity to a sometimes unstable
Indonesia.7 After 9/11 and the 2002 Bali bombings, jihadist terrorism added
a new sense of menace in many Australians’ minds. The rise of China and
its impact on the Indo-Pacific strategic order adds a further sense of anxiety
to Australia’s security outlook.
Taken together, this combination of the nation’s characteristics plus its
strategic perceptions help to inform a working definition of Australia’s
national interests. These interests can be said to include:

• Maintaining the nation’s independence and freedom from outside

interference and coercion;
• Preserving the nation’s democratic system and values;
• Protecting Australia’s people, territory and resources;
• Preserving a stable, peaceful, rules-based regional order, including on
security and economic issues – for example, freedom of navigation in
international sea lanes, given that Australia is deeply dependent on
seaborne commodity exports, and;
• Sustainable prosperity including through exports to major markets and
the maintenance of a competitive economy.8

These interests are clearly quite expansive, and it is clear that few if any of
them can be protected by the efforts and capabilities of the Australian
government alone. It is no surprise that policy statements from Canberra,
like the January 2013 National Security Strategy, emphasise the role of
partnerships in safeguarding Australia’s interests.9 Most critically for the
present analysis, all of these interests are affected by the rise of China and
the growth in its aggregate national power.

How Australia perceives Chinese power

Across Australia’s government and society, the perceptions of the rise of a
powerful China are varied. As one popular account puts it: ‘There are two
Chinas in the Australian mind: the bottomless market and the menacing
other.’10 The one common factor is a wide recognition that China will
matter greatly for Australia’s future.
In theory, greater societal and economic interaction between Australia
and China over the past decade should have translated into greater strategic
and political comfort levels. Much Australia commentary has been focused
on the positive economic effects of China’s rise. Australians hold
overwhelmingly positive views about China’s economic impact. Opinion
polls in recent years confirm that most Australians (73 per cent) feel that
‘China’s growth has been good for Australia.’11 The Australian business
community, in particular, is an advocate for the bilateral relationship. Some
senior business figures have called for a downplaying of security mistrust
and have spoken out strongly against the presence of US troops in
Australia.12
Certainly China’s growth supports a vast and expanding market for
Australian commodities, especially iron ore, and provides indirect payoffs
by increasing the economic activity of Australia’s other trade and
investment partners. The rise of China and its huge and sustained demand
for resources and energy has thus to a large degree protected Australia from
the problems of most developed economies in the aftermath of the global
financial crisis. China is now firmly entrenched as Australia’s largest export
market and trading partner.13 Australia’s main exports to China are
resources and energy, including coal, natural gas, uranium and, most
especially, iron ore; the country is China’s largest iron ore supplier.
Moreover, Australian government and business is now looking to deepen
service sector trade and investment links with China, to capitalise on the
growth of its middle class and to prevent over-reliance on resources for
Australia’s economic wellbeing.14
At a societal level, Australia’s links with China are strong and growing.
People of Chinese origin constitute Australia’s largest migrant community
after British and New Zealanders and are among the fastest growing
demographic groups. By 2011, Australia’s population of 23 million
included an estimated 700,000 people of Chinese descent.15 The numbers of
Chinese tourists visiting Australia have been growing by roughly 20 per
cent a year and China is on track to become Australia’s largest and most
lucrative source of tourists.16 Likewise, China is the largest source of
foreign university students in Australia.17
Yet despite this growing engagement with people of Chinese nationality
or descent, Australians are mostly unsentimental about relations with China.
In opinion polls, most indicate feeling neither ‘particularly warm or cold’
toward China.18 A similar degree of ambivalence is reflected in the low
level of trust many Australians accord China to act responsibly in the
world.19 Australians’ mistrust of a rising China has sharpened over the past
five years. In a 2007 poll, only 19 per cent of Australians were concerned
about a potential ‘threat’ from China’s growing power.20 Yet in 2008 this
trend began to reverse, seemingly in line with broader concerns about
Beijing’s actions and image. That year, 34 per cent of Australians regarded
China as a ‘critical threat’, and this number rose to 40 per cent in 2009.
Furthermore, the percentage of Australians believing that China’s aim was
to ‘dominate Asia’ rose from 60 per cent in 2008 to 69 per cent in 2010.21
By 2010, 55 per cent of Australians supported the view that Canberra
‘[should] join with other countries to limit China’s influence’.22 Many
Australians have indicated discomfort with the idea of China’s becoming
the leading power in Asia. In a 2012 poll, 95 per cent of Australian
respondents indicated that they thought China was either already the
leading power or would become it, and of them, 52 per cent were either
very (15 per cent) or somewhat (37 per cent) uncomfortable with that
prospect.23
Many Australians appear to attach value to the U.S. alliance because of
such concerns about Chinese power. Coinciding with increasing
apprehension about China’s intentions, there was a notable lift in support
for the alliance, with the percentage of Australians who termed it ‘very
important’ growing from 42 per cent in 2008 to 56 per cent in 2010.24 In
2012, following the announcement that US Marines would be based in
Darwin for part of each year, 74 per cent per cent of Australians indicated
that they favoured such a move. Interestingly, 46 per cent favoured
increasing the number of troops, and this number rose to 51 per cent if
China objected.25
 But does all of this wariness really translate into popular perceptions of a
‘China threat’? The idea of a direct Chinese military threat to Australia’s
territory, sovereignty or democratic way of life has long been regarded as
radical within the Australian foreign and security policy discourse.26
Nonetheless, from a marginal position some years ago, this idea now
appears to be taken seriously by a number of prominent strategic thinkers,
such as Ross Babbage, as well as much of the Australian public.27 In a 2010
opinion poll, 46 per cent of respondents said they thought China would
become a military threat to Australia within 20 years. This dropped to 44
per cent in 2011 and 40 per cent in 2012,28 perhaps reflecting an easing of
bilateral tensions following the dramas surrounding the 2009 Australian
Defence White Paper and an initial wave of assertiveness in the South
China Sea. Nonetheless, the fact that a large majority of Australians
anticipate direct military confrontation with the nation’s largest trading
partner is quite striking and not to be dismissed by policymakers.
From a geopolitical point of view, of course, it is important to understand
whether these perceptions have resonance with actual government policy
directions. The answer, since at least 2009, is that they do. A decade ago,
around the time when it was hosting an overlapping state visit by Hu Jintao
and George W. Bush, the pragmatic conservative government of John
Howard made strenuous efforts to downplay any sense of strategic unease
about China’s rise. Moreover, when Mandarin-speaking Labor Prime
Minister Kevin Rudd came to power in late 2007, there was a widespread
assumption – including in Beijing – that his government would show
unusual levels of respect and trust in relations with China.
Yet several factors altered this picture. One was the tangible shifting of
the Asian geopolitical terrain. As China’s power and military modernisation
continued unabated, the United States stumbled with the global financial
crisis and ongoing entanglements in Iraq and Afghanistan, and Chinese
forces and representatives displayed a new assertiveness over issues such as
maritime disputes in the South and East China seas. The second factor was
to do with government attitudes within Australia: the Labor government,
and Rudd personally, showed little trust in the Chinese regime or its
willingness to respect Australian values and interests. Rudd in particular
showed a long-term pessimism about a China-centric Asian strategic
trajectory, reflected in his government’s 2009 Defence White Paper which
called for a major maritime force modernisation for Australia to hedge
against such a future.29
These factors are connected: that is, China’s behaviour played into a
hardening of Australian perceptions, although it is only fair to point out that
the Chinese perspective may well be that Australia itself was responsible for
certain breaches of ‘trust’, such as Rudd’s public remarks on human rights
in a speech in Beijing or the failure of the contentious bids by Chinese
state-owned enterprise (SOE) Chinalco to increase its stake in Rio Tinto in
2008 and 2009.30
China’s relations with Australia have gone through some rocky
diplomatic patches from 2008 onwards, and this unsettling unevenness has
continued with the election of a conservative government in Canberra under
Prime Minister Tony Abbott in September 2013. Credible reports of cyber
threats and Chinese-orchestrated interference in domestic Australian affairs,
as well as allegations of a Chinese agenda to weaken the Australia–US
alliance, may have influenced Australian perceptions regarding Beijing’s
protestations of goodwill.31 Credible accounts suggest that Australian
government and corporate entities are now the subject of regular cyber
intrusions from within China, even if the government is slightly coy about
naming China publicly.32 In 2008, many Australians were disturbed by the
spectacle of perhaps 10,000 pro-Beijing demonstrators – many of them
Chinese students – at the Olympic torch relay in Canberra, noisily drowning
out small Tibetan and human rights protests. There have been serious
allegations of Chinese official orchestration of this activity.33
Whatever the interplay of causation, it is clear that since at least 2009,
Australia’s security community and defence planners have become more
serious about a rising China as a strategic challenge. Australian strategists,
and presumably political leaders, are concerned about China’s ability to
limit America’s options in conceivable future Asia crises (notably through
anti-access and area denial capabilities) and its actual or potential coercion
against smaller powers, more so than direct power-projection scenarios such
as the deployment of a Chinese aircraft carrier. For instance, in November
and December 2013, Australian Foreign Minister Julie Bishop was at the
forefront of a new round of controversy in Australia–China relations when
she admonished China for its establishment of an Air Defence Identification
Zone in the East China Sea, which her government implied was part of a
coercive challenge to the status quo. At the same time, her government had
nothing to say publicly about China’s first-ever deployment of its aircraft
carrier to the South China Sea.34
Cyber is another area of particular concern. It should be emphasised that
Australia is not seriously planning to counter a Chinese invasion or
anything like it. However, Canberra’s defence planners are factoring
Chinese military power and possible scenarios for forceful Chinese security
actions into the set of strategic risks Australia’s military may have to
counter. Although the 2013 Defence White Paper adopted a balanced and
diplomatic stance in the way it approach future security risks surrounding
the rise of China, it did not mark a retraction of Australia’s hedging strategy,
and openly countenanced the possibility that Australian forces could one
day find themselves fighting to protect a rules-based Asian security order
from coercive challenges.35
Australia fears risks to a stable Asian order. These include not only the
possibilities of U.S.–China confrontation or war but also potential conflict
between China and other nations. Canberra has come to see China’s rise as
the central strategic challenge in the Indo-Pacific region. This has in turn
become a major driver of Australia’s efforts at its own maritime force
modernisation, as well as its support of an intensified US alliance under the
Obama Administration’s ‘rebalancing’ strategy from 2011 onwards.36 This
marks a long-term shift in Canberra’s defence thinking, given that from the
1970s to the 1990s Australian planners did not identify China as a major
potential threat.37 Certainly the 2010–2013 Labor government of Prime
Minister Julia Gillard sought to moderate perceptions that it saw China as a
direct threat, and was especially delicate in the wording of its Asian Century
White Paper and 2013 Defence White Paper, which stated: ‘Australia does
not approach China as an adversary.’38 Nonetheless, behind the scenes the
Australian security community’s threat perceptions about China are likely
to endure.
Such perceptions will be heavily influenced by any actual or perceived
Chinese coercion of other nations in the region. The threat or use of force
by Beijing against any of its neighbors, for instance over disputed
sovereignty in the South China Sea or East China Sea, would be seen in
Canberra as a sign of the way China might use its future power. This is clear
from Canberra’s public statements about these issues, and Australia’s
support for ASEAN and the United States in seeking a negotiated,
multilateral solution to South China Sea disputes that is based on the most
widely accepted notions of freedom of navigation.39
None of the foregoing means that all Australian security perceptions
about China are all grim. The Australian government recognises that China
has a right to develop a military commensurate with the scale of its
economy and its interests, and that this will add to China’s potential to
contribute to global security public goods, such as in mass evacuations from
crisis zones, disaster relief and counter-piracy operations, as demonstrated
by the antipiracy naval taskforces China has been sending to the Gulf of
Aden since December 2008. Given that a major priority for the Australian
Defence Force is stabilisation and non-warlike operations like disaster relief
in fragile states, the prospect of China as a future partner and contributor is
in some ways a positive one.
Australian wariness towards China, or even mistrust, is not limited to the
military domain. Suspicions about cyber intrusions and perceived political
interference are touched on elsewhere in this chapter. Much of the
Australian public is also concerned about the extent and impact of foreign
direct investment, and this suspicion seems to deepen when it comes to
major investments by state-owned enterprises. Even though the
overwhelming majority of Chinese investment projects in Australia have
been approved, and are proving uncontroversial and mutually beneficial,
there remains a degree of mutual mistrust related to the scrutiny,
modification and very occasional rejection of certain bids deemed to be of
strategic significance.
In all of this, a crucial question is whether Australia’s close trading
relationship with China is affecting its strategic calculations in ways that
suit China’s interests ahead of other major Indo-Pacific powers, notably the
United States. It is popular to speculate that Beijing can somehow constrain
or define Canberra’s political and strategic choices owing to mutual
economic reliance and vulnerability. The evidence to date does not bear out
such a view. Australia’s deepening security relationships with the United
States and various other powers (including India and Japan) have occurred
at a time of increasing trade with China. Moreover, trade is not the only
measure of economic relations, and it remains the case that Chinese
investment in Australia is only a fraction of American investment there.
Nonetheless, it is fair to conclude that the China trade relationship will be a
factor in Canberra’s diplomatic calculations at the margins. Australia will
not completely avoid having quarrels with China but it will try to limit their
number and intensity. It is striking, for instance, that while Australia has
been outspoken in opposing any coercive change to the status quo in the
East China Sea, it has been less forthright that some other countries in
supporting the Philippines’ decision to seek international arbitration in the
South China Sea.

Responding to Chinese power: the elements of Australia’s

strategy
Some observers contend that the Australian government has failed to
formulate a China strategy;40 others argue that its strategy is incomplete,
unbalanced and deficient in serious dialogue with China.41 Still others
claim that Australia’s response to the rise of a powerful China amounts to
little more than either hope in lieu of a policy or the uncritical embrace of a
dangerous US ‘containment’ strategy which itself raises the risks of war.42
The reality of Canberra’s response is more sophisticated than these
critiques would suggest. The contours of a multi-faceted strategy are
becoming apparent. That said, there remain questions about whether the
emerging strategy is being properly implemented or resourced, and whether
its net consequences will be stabilising for regional security. Put simply,
Canberra’s China strategy has two broad elements – engagement and
hedging. Each of these in turn can be broken down into several aspects.

Engagement
Australia is seeking to prepare its economy and society to make the most of
the opportunities of a constructive, cooperation future of economic and
societal linkages with a prosperous, peaceful Asia. A comprehensive vision
along these lines was set out in the Gillard Government’s Australia in the
Asian Century White Paper in late 2012, a document that certainly could
not be accused of pessimism.43 This document places a premium on
engagement with China and other Asian powers. Although it was partisan in
tone – attributing almost all Australia’s success in Asian diplomacy to Labor
governments – its focus on China as one of a handful of key Asian
relationships is consistent with thinking on both sides of Australian politics.
Indeed, the conservative government of Tony Abbott has identified the
rapid conclusion of a long-deadlocked free trade agreement with China as a
foreign policy priority in its first year. Engagement is being pursued along
both bilateral and multilateral paths. Bilaterally with China, Australia is
deepening economic and societal ties as well as political dialogue. The
economic dimension could help to give China a stake in Australia’s own
prosperity and security, for instance creating a degree of reliance on
Australian resource exports. More regular and senior political dialogue
could add a level of predictability and familiarity, if not strictly ‘trust’,
which could help the relationship cope with shocks and crises. A major step
was taken in this direction in early 2013 with the announcement of an
annual leadership-level dialogue framework during a visit to Beijing by
Prime Minister Julia Gillard.44
Australia’s bilateral engagement with China also has a defence and
security dimension, involving dialogue between the two militaries, ships’
visits and combined exercising on issues like disaster relief. A key objective
is to establish a greater degree of predictability and communication, if not
strictly transparency, in military–military relations. This may enable the two
militaries occasionally to work together in providing public goods, such as
counter-piracy, humanitarian assistance or stabilisation missions.
Additionally, an improved Australia–China defence relationship may
provide a special channel for dialogue with China at times when its
relations with other powers are strained, which makes Canberra– Beijing
ties of potential value to the United States, Japan and others. Part of
Canberra’s logic in placing some emphasis on its defence ties with China is
to use this as a way to improve its understanding of Beijing’s strategic
intentions as well as to signal to China that – despite various hedging
measures – Australia is not principally interested in excluding China from
regional security cooperation. In other words, strong defence engagement
with China is proof that Canberra is not pursuing containment.
Of course, this approach has its limits, based on differing strategic
interests and Australia’s alliance with the United States. Through informal
channels, China has proposed somehow bringing the security relationship
closer to the level of the economic and societal relationship.45 But this must
confront the reality that Australia–US relations will remain qualitatively
different, based on the pre-existence of the alliance, shared values and
above all the very fact that many Australians see the alliance as insurance
against the uncertainties of Chinese power. Opinion polling suggests that,
overall, Australians continue to see the United States as their most
important bilateral relationship.46
Despite professional efforts to engage, the two militaries will remain
wary of each other. After all, it is conceivable that one day they may be at
war. Still Australia is ahead of most democracies in its defence relations
with China, with the two countries holding a range of annual talks up to the
level of chief of defence force. In 2010, Australia was the first ‘Western’
country to conduct a live-fire naval exercise with China. In 2011, Prime
Minister Gillard declared the aim of expanding defense relations with
China, and this has been followed up with dialogues, exercises and ship
visits, including to the International Fleet Review in Sydney in October
2013.47
Canberra is also seeking to enmesh China in multilateral diplomatic
institutions in Asia and globally. Part of the logic here is about using
diplomacy to try to reduce the likelihood of major conflict disrupting Asia’s
prosperous and peaceful future. Regionally, Australia has been keen to
strengthen bodies like the East Asia Summit, the ASEAN Regional Forum
and the ASEAN Defence Ministers’ Meeting Plus Eight (ADMM+) to
ensure they can address interstate issues such as maritime security in East
Asia.
Australia’s approach seems to be about striking a balance between
respecting China’s interests in such forums without allowing China to
dominate or veto their agendas. The message is meant to be that Australia
wants to see China included in the regional order but not in a way that
makes it destabilisingly dominant. Nonetheless, Australian policymakers
are realistic about the limits of multilateralism. Australian officials have
sought to engage China in multilateral activities that build some degree of
predictability and cooperation in areas like humanitarian assistance, and
Australia notably hosted the first major naval exercise under the ADMM+
arrangement in October 2013, with a Chinese ship taking part. Yet beyond
such modest endeavours, it has become patently clear in recent years, for
instance at almost every significant EAS and ARF meeting between 2010
and 2013, that China will not allow these institutions to mediate or even
deeply discuss its maritime security tensions.

Hedging
The obvious limits of engagement in insuring against negative security
outcomes from the great uncertainties of China’s growing power help to
explain why Canberra remains attached to the second element of its overall
strategy – hedging. The use of this word needs to be clearly understood.
Australia is not ‘hedging its bets’, to use a gambling analogy, by investing
simultaneously and equally in its security relations with both China and the
United States. Canberra is not fence-sitting when it comes to strategic
alignment; it has made a choice, and that choice is the US alliance. Rather,
Australia is hedging in the sense that, while it is hoping and preparing for a
peaceful and prosperous Asian Century, it is taking security precautions
against the possibility of a breakdown of regional order.
Australia’s hedging has two distinct aspect: ‘internal balancing’, or
modernising Australia’s own military; and what is known as ‘external
balancing’, most notably strengthening the alliance with United States as
security guarantor of last resort. These elements have continued under both
Labor and conservative governments.
Internal balancing involves a reasonable degree of strengthening
Australia’s own defence and security capabilities. Under this approach,
Australia would bolster its own military with at least two objectives: to
improve its chances of deterring or withstanding at least a limited attack or
coercion from China; and to enhance the contribution Australia could make
in a combined US-led effort at balancing against the PLA in future regional
contingencies.
Internal balancing has been pursued, however unevenly, by the Howard,
Rudd, Gillard and now Abbott governments in recent years. From a
weakened state in the 1990s, the Australian Defence Force has put on some
strategic weight: many of the acquisitions currently in train, from Air
Warfare Destroyers to Super Hornet combat aircraft, were instigated under
John Howard. Subsequently, Kevin Rudd’s ambitious Force 2030 Defence
White Paper of 2009 set out plans to bulk up further, notably with a fleet of
12 advanced submarines armed with cruise missiles. Although the Gillard
government suspended or even backtracked on some of these commitments,
with large cuts to the defence budget in 2012, plans remain for a
strengthened Australian Navy over the medium to long term, a position
affirmed both in the May 2013 Defence White Paper and by the newly
elected Abbott government later that year.48
In any case, external balancing is the more important part of Australia’s
hedging strategy against the uncertainties of Chinese power. This in turn has
two parts, the most crucial of which is the maintenance and indeed
strengthening of Australia’s military alliance with the United States. Indeed,
Australia has become closely associated with America’s Asian ‘pivot’ or
rebalancing strategy as proclaimed by President Obama in a speech to the
Australian Parliament in November 2011. Since that time, Canberra and
Washington have taken many steps to adapt and strengthen the alliance for
future challenges in Indo-Pacific Asia. These include renewed joint efforts
in intelligence, surveillance and reconnaissance, as well as in the space and
cyber domains, with for instance the relocation of some space tracking
assets to Western Australia announced in 2012.49 The most prominent
marker of the intensified alliance has been the decision to base or ‘rotate’ up
to 2,500 US Marines to Darwin for training for six months each year. The
prospect of enhanced air and naval access, however, is of strategically
greater importance.
Critics of the Gillard-Rudd governments’ willingness to allow greater US
military access to Australian territory claim that this will antagonise China
and needlessly make Australia a target in future conflicts. An alternative
reading is that Australia’s security will be increased by its ally being seen to
make direct, on the ground investments in the nation’s defence. In the
words of a former senior defence official: ‘It escapes no-one in the region
that a large rotational US air force and marine presence in Australia’s north
would massively complicate an adversary’s intention to do us harm.’50
Moreover, rather than compromising Australian independence, it can
credibly be argued that Australia’s weight and leverage in Asia is in fact
increased by the depth of its alliance with a pivoting United States. For
instance, Australia’s military integration with American forces expands
opportunities to exercise at a high level with other US allies and partners,
such as Japan, South Korea, India and Singapore.
The Gillard-Rudd governments’ enthusiasm for hosting US assets cooled
a little in 2012 and 2013, perhaps in part due to sensitivity about causing
China undue affront. Instead, Canberra has been taking a step-by-step
approach to the strengthened alliance. For the time being, Australia is being
non-committal on ideas for next steps, such as about US naval access to the
HMAS Stirling base in Western Australia or US surveillance drone flights
out of Australia’s Cocos Islands territory. However, the conservative
Opposition under Tony Abbott is on the public record as embracing the idea
of a greater US presence in Australia, and can be expected to reinvigorate
some initiatives floated under Labor. As of the end of 2013, it had already
agreed to a set of principles for progress on force posture issues (that is, US
presence in or access to Australia). It has also shown new enthusiasm for
areas of capability cooperation, notably in ballistic missile defence.
Canberra is also working on a second kind of external balancing in its
Asia and China strategies. This is not intended as a substitute for the
alliance, but rather a complement. That is, Australia is strengthening
bilateral security relations with other key regional players – notably Japan,
South Korea, India and Indonesia – through bilateral non-treaty ‘security
declarations’ supported by regular dialogue and practical activities. Indeed,
Australia has taken the lead in Asia in a pattern of connecting the spokes
among US partners and allies in the so-called hub-and-spokes alliance
system. Its 2007 security declaration with Japan was the model for many
further such arrangements, including between other countries such as Japan
and India. Additionally, Canberra has experimented occasionally with
combining multiple bilateral partnerships to build ‘minilateral’ dialogues or
activities. Of these, so far only the Trilateral Strategic Dialogue with Japan
and the United States has been enduring and effective. Other ideas, for
instance involving India or Indonesia, have not so far evolved into a regular
pattern of meetings among officials. Canberra and all prospective
participants in such arrangements would no doubt be mindful of Chinese
perceptions and accusations of containment, as was the case with the short-
lived quadrilateral dialogue in 2007–2008.
It should be emphasised that none of these arrangements has been
intended solely or even primarily as a vehicle for the containment of
Chinese power or as an embryonic treaty alliance. Australia has good
reasons for closer security ties with India, Indonesia, South Korea and
Japan regardless of the rise of China – for instance, all have common cause
against transnational challenges like piracy, terrorism or natural disasters.
Indeed, it would be odd for middle powers in Asia to have thin or non-
existent security ties with one another in perpetuity. In addition, there will
be circumstances where some of these arrangements could become
connected with participating countries’ improved security ties with China:
Australia could become a hub for minilateral security cooperation involving
China as well for activities that exclude China. At the same time, a
balancing logic is clearly at work, and Australia’s closer ties with various
other Indo-Pacific Asian countries are building patterns of trust and
practical cooperation that could come into play in future balancing
scenarios were China’s rise to take a confrontational turn.

Other options? Two remote hypotheticals

Before concluding this analysis, it would be appropriate briefly to consider
whether Australia seriously has any other strategic options in response to
the rise of China.
If indeed China’s rise to become the pre-eminent power in Asia and
eventually globally is inevitable, perhaps the most obvious response for a
middle-sized country like Australia would be to accept and embrace that
reality by pursuing a very large degree of accommodation with Chinese
interests and imperatives. This need not be a formal security alignment with
China, but could hypothetically take on some of the characteristics of non-
alignment, a soft alignment or even some concessions regarding certain
elements of national sovereignty: something approaching what during the
Cold War was sometimes known (or caricatured) as Finlandisation.51 Under
this hypothetical scenario, a country like Australia would shape its foreign
and security policies to eliminate or minimise any directly negative impact
on Chinese interests. In the political sphere this might, for example, include
refraining from criticism of China’s strategic or human rights behaviour and
allowing a greater degree of Chinese influence in limiting domestic political
debates and expression. In the security sphere, it could mean greatly
circumscribing or even effectively ending the Australia–US alliance, for
instance no longer hosting joint facilities or visiting forces that might be
used against China in a conflict or crisis.
Is such an option to be taken seriously? There is no genuine sign of such
thinking in the Australian government or security establishment, or among
the current policy elites in the major political parties. Nonetheless in recent
years a number of prominent Australians, including former prime ministers
Malcolm Fraser and Paul Keating, have sharply criticised the strengthening
of the Australia–US alliance and its alleged place in the US ‘containment’
strategy against China. Typically, this line of criticism has involved calling
for a more ‘independent’ Australian foreign policy.52 It should be
emphasised that neither Fraser nor Keating, nor indeed the other voices
associated with this ‘independence’ push, are calling for an end to the
alliance as such, and nor do they propose automatic accommodation with
Chinese strategic priorities. But their critiques do not address the question
of whether the United States would see value in maintaining alliance
commitments to a country which was opting out of assisting it in its
principal strategic competition. The minority Green party, meanwhile, has
promoted a set of policies which in effect would abrogate the Australia–US
alliance – although the Greens are also heavily critical of China and indeed
international realpolitik in general. Yet the US alliance remains strongly
supported by both major political parties, the security establishment and
most of the population, with opinion polling showing that about 82 per cent
of Australians broadly support the alliance, and indeed a surprisingly high
61 per cent are comfortable with the basing of American forces in
Australia.53
A second hypothetical possibility would be the idea of armed neutrality
for Australia in a contested future Asia. This, after all, would accord with
notions of independence and strategic autonomy vis-à-vis China as well as
the United States. But there appears to be no substantial constituency for
this stance in Australia. Given the great extent of Australia’s national
interests, as outlined earlier, and the country’s inability in foreseeable
circumstances to defend itself without reliance on United States, real armed
neutrality does not appear to be an option. Australian voters seem content to
accept defence spending well below 2 per cent of gross domestic product.
For the nation genuinely to be able to deter a major power, single-handedly,
it would require one of two things. The first would be massive investment
in a conventional or asymmetrical capability, as has been advocated by
strategists like Ross Babbage. The Australian public seems very reluctant to
consider the greatly increased defence spending such a posture would
require. The other path to Australian strategic autonomy and deterrence
leads to that most taboo of subjects in the nation’s security discourse –
Australian nuclear weapons.54 This is not considered a serious option in the
Australian debate, even were strategic circumstances to worsen.

Conclusion: Canberra’s Beijing balance

Possessing a strategy is not the same as effectively implementing it. In
particular, the internal balancing aspect of Australia’s hedging strategy is
lagging; Australia has recently cut its military spending to the lowest
proportion of gross domestic product since the 1930s.55 This raises the
question of whether the diminishing policy priority accorded to Australian
military modernisation reflects official assessments about strategic risk, an
easing of public threat perceptions, or simply a short-term trade-off by a
government under pressure to deliver on domestic issues.
More broadly, a hedging strategy against Chinese power certainly has its
share of complications. It involves Canberra seeking to manage two
difficult sets of tensions at once. These include the tension between its very
strong trade ties with China and the much more problematic strategic
relationship between the two nations, in which Australia’s role as a US ally
and Australia’s uncertainty about Chinese long-term strategic direction are
inescapable factors.56 Another tension is between Australia’s liberal
democratic system and values and the pursuit of positive political and
societal relations with authoritarian China.
In each instance – the economic-security tension and the values-societal
tension – Canberra’s challenge is about striking a balance. The result will
continue to be a set of uneasy balancing acts and policy tensions, for
instance regarding the extent of Australia’s embrace of the US ‘pivot’
strategy, which are yet to fully play out. In all this, a fundamental question
will continue to be whether there can ever really be any equivalence
between Australia’s strategic and political relations with China and with the
United States. The answer here will depend in large part on how China’s
security orientation and actions develop in the years ahead – something
over which middle-sized Australia can have very little control.

Notes
1 This chapter adopts an Indo-Pacific definition of Australia’s geography as opposed to the more
familiar Asia-Pacific conception. This recognises Australia’s two-ocean geography, the growing
integration of the Western Pacific and the Indian Ocean region into one strategic system, and the
importance of Indo-Pacific economic and security linkages to the countries that matter most to
Australia; including China, the United States, India, Indonesia and Japan. See Medcalf, Rory
2012, ‘Pivoting the map: Australia’s Indo-Pacific strategic system’, Centre of Gravity Series, no.
1. Strategic and Defence Studies Centre, Australian National University, Canberra.
2 White, Hugh 2012, The China Choice: Why America Should Share Power, Black Inc.
(Collingwood, 2012).
3 This analysis draws on several important previous publications on this topic, notably: Uren,
David 2012, The Kingdom and the Quarry: China, Australia, Fear and Greed, Black Inc.
(Collingwood 2012); White 2012, The China Choice; Jakobson, Linda 2012, ‘Australia-China
ties: in search of political trust’, Lowy Institute Policy Brief, June 2012; Dupont, Alan 2011,
‘Living with the dragon: why Australia needs a China Strategy’, Lowy Institute Policy Brief,
June 2011. Medcalf, Rory 2011, ‘Grand stakes: Australia’s future between China and India’, in
Ashley J. Tellis, Travis Tanner and Jessica Keogh (eds), Strategic Asia 2011–12: Asia Responds
to its Rising Powers: China and India (Seattle, National Bureau of Asian Research 2011), pp.
197–200.
4 Commonwealth of Australia, 2012, Australia in the Asian Century (White Paper), October
2012; Commonwealth of Australia, 2013, Strong and Secure: A Strategy for Australia’s National
Security, January 2013; and Commonwealth of Australia, 2013, Defence White Paper 2013.
5 Jakobson 2012, ‘Australia-China ties: in search of political trust’, p. 4.
6 Commonwealth of Australia, 2012, Australia in the Asian Century (White Paper).
7 Medcalf, Rory 2009, ‘Australia: allied in transition’, in Ashley J. Tellis, Mercy Kuo and Andrew
Marble (eds), Strategic Asia 2008–09: Challenges and Choices (Seattle, National Bureau of
Asian Research, 2008), p. 233; and White, Hugh 2005, ‘Australian Strategic Policy’, in Ashley
J. Tellis and Michael Wills (eds), Strategic Asia 2005–06: Military Modernization in an Era of
Uncertainty, (Seattle, National Bureau of Asian Research, 2005), p. 306.
8 These are broadly consistent with the interests set out in the NSS. See: Commonwealth of
Australia, 2013, Strong and Secure: A Strategy for Australia’s National Security. See also
Medcalf 2011, ‘Grand stakes: Australia’s future between China and India’, pp. 197–200.
9 Commonwealth of Australia, 2013, Strong and Secure: A Strategy for Australia’s National
Security, p. viii.
10 Uren 2012, The Kingdom and the Quarry: China, Australia, Fear and Greed, p. 8.
11 Hanson, Fergus 2010, Australia and the World: Public Opinion and Foreign Policy (Sydney,
The Lowy Institute for International Policy, 2010), p. 10.
12 Earl, Greg, Holgate, Ben and Greber, Jacob 2012, ‘Stokes and Packer: We need to bow to
China’, Australian Financial Review, 14 September 2012,
 www.afr.com/p/national/politics/stokes_and_packer_we_need_to_bow_oAMt4oFWo4pC0k-
21xZ53EL, last accessed 1 February 2013.
13 Department of Foreign Affairs and Trade, Composition of Trade Australia 2010, pp. 29, 31,
www.dfat.gov.au/publications/stats-pubs/composition_trade.html, last accessed 1 February
2013.
14 Commonwealth of Australia, 2012, Australia in the Asian Century (White Paper), pp. 126–129.
15 Gillard, Julia 2011, ‘Speech to the Australian Council of Chinese Organisations Dinner in
Celebration of Australia Day and Chinese New Year’, delivered 22 January 2011, Prime
Minister of Australia, Press Office, www.pm.gov.au/press-office/speech-australian-council-
chinese-organisations-dinner-celebration-australia-day-and-ch, last accessed 29 January 2013.
16 ‘Key facts: Australian tourism sector’, Australian Department of Resources, Energy and
Tourism,
www.ret.gov.au/tourism/Documents/Tourism%20Statistics/Tourism_Key_Facts_web.pdf, last
accessed 29 January 2013; ‘Chinese Tourists Top Monthly Visits to Australia for First Time’,
China Daily, 6 April 2011, www.chinadaily.com.cn/business/2011–
04/06/content_12278248.htm, last accessed 28 January 2013; and ‘Minister Opens Tourism
Office in India’, Australian Minister for Tourism, Press Release, 3 November 2008,
http://minister.ret.gov.au/MediaCentre/MediaReleases/Pages/MinisterOpensTourismAustraliaOf
ficeinIndia.aspx, last accessed 29 January 2013.
17 Gillard, Julia 2011, ‘Speech to the Australia-China Economic and Co-operation Trade Forum’,
delivered 26 April 2011, Prime Minister of Australia, Press Office, www.pm.gov.au/press-
office/speech-australia-china-economic-and-co-operation-trade-forum-beijing, last accessed 28
January 2013.
18 Hanson 2010, Australia and the World: Public Opinion and Foreign Policy, p. 19.
19 In polls between 2006 and 2009, just under half the respondents indicated low levels of trust in
China. Hanson, Fergus 2009, Australia and the World: Public Opinion and Foreign Policy
(Sydney, The Lowy Institute for International Policy, 2009), p. 7.
20 Gyngell, Allan 2007, Australia and the World: Public Opinion and Foreign Policy (Sydney, The
Lowy Institute for International Policy, 2007), p. 8.
21 Hanson, Fergus 2008, Australia and the World: Public Opinion and Foreign Policy (Sydney,
The Lowy Institute for International Policy, 2008), p. 10; Hanson 2009, Australia and the
World: Public Opinion and Foreign Policy, p. 10; and Hanson 2010, Australia and the World:
Public Opinion and Foreign Policy, p. 10.
22 Hanson 2010, Australia and the World: Public Opinion and Foreign Policy, p. 10; and
Nicholson, Brendan 2011, ‘Aussie troops should defend South Korea’, The Australian, 25 April
2011, www.theaustralian.com.au/national-affairs/aussie-troops-should-defend-south-
korea/story-fn59niix-1226044204452, last accessed 30 January 2013.
23 Hanson, Fergus 2012, Australia and New Zealand and the World: Public Opinion and Foreign
Policy (Sydney, The Lowy Institute for International Policy, 2012), p. 13.
24 Gyngell, Allan 2007, Australia and the World: Public Opinion and Foreign Policy (Sydney, The
Lowy Institute for International Policy, 2007), p. 13; Hanson 2008, Australia and the World:
Public Opinion and Foreign Policy, p. 9.
25 Hanson 2012, Australia and New Zealand and the World: Public Opinion and Foreign Policy, p.
13.
26 Babbage, Ross 2011, ‘Australia’s strategic edge in 2030’, Kokoda Foundation, Kokoda Papers,
no. 15, February 2011,
www.kokodafoundation.org/Resources/Documents/KP15StrategicEdge.pdf, last accessed 28
January 2013; and Dibb, Paul and Barker, Geoffrey 2011, ‘Panicky response would harm our
interests’, The Australian, 8 February 2011, www.theaustralian.com.au/news/opinion/panicky-
response-would-harm-our-interests/story-e6frg6zo-1226001745570, last accessed 28 January
2013.
27 Uren 2012, The Kingdom and the Quarry: China, Australia, Fear and Greed, pp. 6–8.
28 Hanson 2010, Australia and the world: Public Opinion and Foreign Policy, p. 11; Hanson 2012,
Australia and New Zealand and the World: Public Opinion and Foreign Policy, p. 13.
29 Commonwealth of Australia 2009, Defending Australia in the Asia-Pacific Century: Force
2030, Defence White Paper; Stewart, Cameron 2008, ‘Menace of the growing red fleet’, The
Australian, 23 August 2008, www.theaustralian.com.au/news/menace-of-the-growing-red-
fleet/story-e6frg6t6–1111117275442, last accessed 28 January 2013.
30 Sainsbury, Michael 2012, ‘Kevin Rudd “breached Chinese trust” says Geoff Raby’, The
Australian, 4 June 2012, www.theaustralian.com.au/national-affairs/foreign-affairs/rudd-
breached-chinese-trust/story-fn59nm2j-1226382029072, last accessed 4 February 2013.
31 An official in China’s Sydney consulate, Chen Yonglin, who in May 2005 sought political
asylum, claimed that Hu Jintao (then China’s President),

outlined a work programme designed to make Australia part of China’s

‘Great Border Area’ or ‘Grand Border Strategy’ for obtaining Australia’s
natural resources and its political compromise … with the goal of turning
Australia into a second France; that dares to say ‘no’ to the US.

This allegation has not been corroborated and there are questions about
whether an official of Chen’s rank would have had access to such
strategic-level information. See Uren, David 2012, The Kingdom and
the Quarry: China, Australia, Fear and Greed, p. 14.
32 Griffith, Chris 2013, ‘China accounts for a third of cyber attacks’, The Australian, 24 January
2013, www.theaustralian.com.au/australian-it/china-accounts-for-a-third-of-cyber-attacks/story-
e6frgakx-1226560556271, last accessed 25 January 2013.
33 English, Ben 2008, ‘Chinese Embassy “helped get rent-a-crowd” to relay’, Daily Telegraph, 25
April 2008.
34 ‘Australia summons Chinese ambassador over air defence zone’, The Sydney Morning Herald,
26 November 2013.
35 Medcalf, Rory 2013, ‘Sweet and sour in defence take on China’, The Australian Financial
Review, 6 May 2013.
36 Commonwealth of Australia 2009, Defending Australia in the Asia-Pacific Century: Force
2030: Defence White Paper; Sheridan, Greg 2010, ‘The realist we need in foreign affairs’, The
Australian, 9 December 2010, www.theaustralian.com.au/news/opinion/the-realist-we-need-in-
foreign-affairs/story-e6frg6zo-1225967870772, last accessed 28 December 2012; Nicholson,
Brendan 2012 ‘Secret “war” with China uncovered’, The Australian, 2 June 2012,
 www.theaustralian.com.au/national-affairs/foreign-affairs/secret-war-with-china-
uncovered/story-fn59nm2j-1226381002984, last accessed 28 December 2012; Stewart,
Cameron 2012, ‘Chinese military power “shifting Pacific balance” says Defence White Paper’,
21 December 2012, The Australian, www.theaustralian.com.au/national-affairs/defence/chinese-
military-power-shifting-pacific-balance-says-defence-white-paper/story-e6frg8yo-
1226541499163, last accessed 28 December 2012.
37 Smith, Richard 2009, ‘The long rise of China in Australian defence strategy’, Lowy Institute for
International Policy, Perspectives, April 2009, www.lowyinstitute.org/Publication.asp?
pid=1023, last accessed 15 December 2012.
38 Commonwealth of Australia 2013, Defence White Paper 2013.
39 Hartcher, Peter 2012, ‘China throws book by Carr parries with chapter and verse’, Sydney
Morning Herald, 22 May 2012, www.smh.com.au/opinion/politics/china-throws-book-but-carr-
parries-with-chapter-and-verse-20120521–1z17e.html, last accessed 28 December 2012.
40 Dupont 2011, ‘Living with the dragon: why Australia needs a China Strategy’.
41 Jakobson 2012, ‘Australia-China ties: in search of political trust’.
42 White 2012, The China Choice: Why America Should Share Power.
43 Commonwealth of Australia, 2012, Australia in the Asian Century (White Paper).
44 Jakobson 2012, ‘Australia-China ties: in search of political trust’. Kelly, Paul 2013, ‘Julia
Gillard deserves credit for belated success in Beijing, but it’s only a start’, The Australian, 13
April 2013.
45 In a joint Australia-China report published in 2012, Cui Liru, the head of the Chinese Ministry
of State Security’s think tank and an official of ministerial rank, wrote:

The strategic relationship between our two countries is clearly lagging

behind the changes in the overall strategic situation in Asia and the
Pacific. It is for this reason that it is a matter of pressing urgency as to
how our two countries develop new forms of collaboration in the
strategically complex environment of Asia and the Pacific.

Australian Centre on China in the World and China Institutes for

Contemporary International Relations, Australia and China: A Joint
Report on the Bilateral Relationship, February 2012,
http://ciw.anu.edu.au/joint_report/CIWCICIRJointReport-
Australia_and_China-Feb2012.pdf, last accessed January 16 2013.
46 In 2013, an opinion poll indicated that 48 per cent of Australians saw America as the most
important bilateral relationship, whilst 37 per cent saw China in that light. Oliver, Alex, 2013,
Australia and the World: Public Opinion and Foreign Policy (Sydney, The Lowy Institute for
International Policy, 2013).
47 Benson, Simon 2011, ‘Our China plates – Julia Gillard seeks closer defence links to Chinese
military’, Daily Telegraph, 28 April 2011, www.dailytelegraph.com.au/news/national/our-china-
 plates-gillard-seeks-closer-defence-links-to-chinese-military/story-e6freuzr-1226045883726,
last accessed 28 December 2012.
48 Gillard, Julia 2013. ‘Australia’s national security beyond the 9/11 decade’, delivered 23 January
2013, Prime Minister of Australia, Press Office, www.pm.gov.au/press-office/australias-
national-security-beyond-911-decade, last accessed 25 January 2013; Jennings, Peter 2012,
‘Mind the gap Mr Abbott’, The Strategist, 25 September 2012, www.aspistrategist.org.au/mind-
the-gap-mr-abbott, last accessed 27 January 2013.
49 ‘AUSMIN 2010 Joint Communique’, Australian Minister of Foreign Affairs,
www.foreignminister.gov.au/releases/2010/kr_mr_101108.html, last accessed 20 January 2013;
‘AUSMIN 2012 Joint Communique’, Australian Minister of Foreign Affairs,
http://foreignminister.gov.au/releases/2012/bc_mr_121114.html, last accessed 28 January 2013.
50 Jennings, Peter 2012, ‘Defence priority needs to swing back to our Asia-Pacific neighbours’,
The Australian, 14 May 2012,
www.aspi.org.au/pdf/defence_priority_needs_to_swing_back_to_our_asia-
pacific_neighbours.pdf, last accessed 20 December 2012.
51 Finland’s diplomatic Cold War concessions towards its superpower neighbour the Soviet Union
have been sometimes misrepresented and exaggerated in contemporary Asian security discourse
to suggest a larger compromise of sovereignty than may actually have been the case.
Nonetheless, the term is often used to describe an undesirable end-state for concessions towards
China from smaller regional nations.
52 For instance, Malcolm Fraser’s 2012 Whitlam Oration. See, ‘Malcolm Fraser: the 2012 Gough
Whitlam Oration’, The Conversation, 6 June 2012, http://theconversation.edu.au/malcolm-
fraser-2012-gough-whitlam-oration-7524, last accessed 22 December 2012.
53 See Oliver 2013, Australia and the World: Public Opinion and Foreign Policy.
54 Babbage, Ross 2008, ‘Learning to walk among giants: the new Australian defence white paper’,
Security Challenges, vol. 4, no. 1 (Autumn 2008), pp. 13–20; Heinrichs, Raoul 2008
‘Australia’s nuclear dilemma: dependence, deterrence or denial?’, Security Challenges, vol. 4,
no. 1 (Autumn 2008), pp. 55–67.
55 Kelly, Paul 2012, ‘Military spending slumps to 1930s levels’, The Australian, 11 May 2012,
www.theaustralian.com.au/opinion/columnists/military-spending-slumps-to-1930s-level/story-
e6frg74x-1226352458112, last accessed 20 December 2012.
56 Jakobson 2012, ‘Australia-China ties: in search of political trust’; Australian Centre on China in
the World and China Institutes for Contemporary International Relations, Australia and China:
A Joint Report on the Bilateral Relationship, February 2012,
http://ciw.anu.edu.au/joint_report/CIWCICIRJointReport-Australia_and_China-Feb2012.pdf,
last accessed 16 January 2013.
9 Facing the challenges
ASEAN’s institutional responses to
China’s rise
Kai He

Introduction
ASEAN (Association of Southeast Asian Nations) is praised by the
Secretary-General of the United Nations as one of the most successful
regional institutions in the world. It has played an indispensable role in
maintaining regional order in the Asia Pacific after the Cold War.1 Facing
strategic challenges from the rise of China, ASEAN adopts various
institutional balancing strategies to address China’s potential threats and
rein in the Chinese power in the region. This chapter applies institutional
balancing theory to examine ASEAN’s institutional responses to China’s
rise in various regional economic and security institutions in the post-Cold
War era.2
China’s rise signifies a gradual transformation of the international system
from unipolarity to a non-unipolar world. As an organization of small and
middle powers, ASEAN faces strategic uncertainties brought about by the
power transition in the system. Deepening economic interdependence
between ASEAN and China amplified the economic cost for the ASEAN
states to use traditional military means to deal with China’s rise. Therefore,
ASEAN adopted various institutional instruments, such as the ASEAN
Regional Forum (ARF ), the East Asian Summit (EAS), the Regional
Comprehensive Economic Partnership (RCEP), and the ASEAN
Community, to constrain and shape China’s behavior in the region. Based
on different threat perceptions regarding China’s rise, some states, such as
the Philippines, applied traditional military-based balancing strategy to
address China’s threat in the territorial domain by strengthening military
ties with the United States. Thus, how China handles the South China Sea
disputes with some ASEAN states is a critical test for China’s commitment
of its “peaceful rise” in the region.
The chapter has four sections. First, I discuss two structural changes
brought by the rise of China in the system, namely the power transition to a
post-unipolar world and the deepening economic interdependence in the
Asia Pacific. Second, I examine three challenges ASEAN is facing in the
context of China’s rise: the “taking-sides dilemma,” the “irrelevance
worry,” and the “flash-point danger.” Third, I apply institutional balancing
theory to discuss how ASEAN has used various economic and security
institutions to cope with the rise of China. In conclusion, I suggest that due
to globalization and economic interdependence, the power transition in the
twenty-first century is different from the previous ones. ASEAN can
potentially play an important role in contributing to the peaceful process of
the transformation of the system.

China’s rise—towards a post-unipolar world

Since 2010, China has overtaken Japan as the second largest economy in
the world. In 2010, China’s GDP reached US$5.8 trillion while the Japanese
GDP was US$5.4 trillion. Although China’s economic size is still one-third
of the United States, it is expected that China will reach the size of the
United States in ten years.3 In 2012, China surpassed the United States to
become the largest Foreign Direct Investment (FDI) recipient in the world.4
In the same year, China also overtook the U.S. to become the world’s
biggest trading nation as measured by the sum of exports and imports of
goods.5
Military-wise, China’s military expenditure amounted to US$106.4
billion in 2012, behind only the United States in the world.6 No one
questions that the military capability gap between the United States and
China is still huge, since China’s military spending was only about 17
percent of the United States’ in 2012. However, given China’s continuous
and strong economic growth, the military gap between the two nations will
eventually close up.
There is little doubt that China’s rise in both economic and military
domains has gradually transformed the distribution of power in the
international system after the Cold War although scholars are still debating
over when a real power transition will take place. The 2008 global financial
crisis that originated in the United States attracted scholars and pundits,
such as Christopher Layne and Martin Jacques, to make such comments as
“This time, it is real”7 and we need to prepare for the time “when China
rules the world.”8
ASEAN states, consisting of middle and small powers in Southeast Asia,
have mixed feelings about the rise of China. China’s huge domestic market
and economic dynamics can bring tremendous business opportunities to the
region. In the 1997 economic crisis in Southeast Asia, China played a
responsible role in keeping its currency value and stabilized the regional
market. After the economic crisis, China actively participated in the
ASEAN Plus Three and Chiang Mai Initiative to promote regional
economic and financial cooperation. Although ASEAN states also worried
about the competitive aspect of China’s economy, the possibility of access
to China’s huge market and the investment dynamics offered more
opportunity than threat in the perception of ASEAN states. Since 2009,
China has become the largest trade partner of ASEAN. Since 2010, ASEAN
has become the third largest trade partner of China. China–ASEAN trade
increased by 20.9 percent from US$232 billion in 2010 to US$280.4 billion
in 2011.9 In 2012, trade between China and ASEAN grew dramatically to
US$400 billion. During his APEC trip to Bali in October 2013, Chinese
President Xi Jinping proposed that China–ASEAN trade would target US$1
trillion by 2020.10 As a high-ranking ASEAN official points out:

ASEAN views China as more an opportunity than a competitor. China

is now the global factory and the largest market with more than a
billion consumers. ASEAN could be the service provider and exporter
of goods to the increasingly sophisticated markets in the coastal cities
of China.11
 Meanwhile, China’s military modernization also drew serious suspicions
and apprehensions in the region, especially from countries having territorial
issues/disputes with China in the South China Sea. At the 2010 ARF
meeting, facing complaints from his Southeast Asian counterparts about
China’s behavior in the region, Chinese Foreign Minister Yang Jiechi
bluntly stated that “China is a big country and other countries are small
countries … and that is just a fact.”12 The ASEAN states definitely
understand that China is a big country with strong military capability in the
region. However, for ASEAN leaders, they are more concerned about how
China will use its military muscles in the region.

Three challenges to ASEAN

The rise of China has meant a gradual transformation of the international
system from unipolarity dominated by the United States to a post-unipolar
world. It is still debatable what kind of international order will emerge in
the post-unipolar world in the context of China’s rise. For ASEAN states,
the military concerns and economic attractions from the rise of China have
posed three strategic challenges, the “taking-sides dilemma,” the
“irrelevance worry,” and the “flash-point danger,” to ASEAN in the near
future.

The taking-sides dilemma

First, ASEAN faces a dilemma of “taking sides” in the potential power
transition between China and the United States. During the Cold War, the
original five ASEAN states were categorized into the Western Camp due to
their shared anti-Communist identity.13 Soon after the Cold War, the
disappearance of ideological antagonism encouraged ASEAN to look for a
new role and identity in the Asia Pacific. In the post-Cold War era, ASEAN
is praised for its “balancing” diplomacy among great powers through
building numerous multilateral institutions.14 For example, the ARF is the
only security-oriented multilateral dialogue mechanism, which includes all
the major powers in the world. Even the European Union also attends the
annual meeting of the ARF every year as an organizational participant.
 Therefore, it is not in ASEAN’s interests to take sides between the United
States and China. Allying with China, ASEAN will alienate the United
States from the region, which is still a major player or pacifier in the Asia
Pacific despite its seemingly declining power position in the system. As
Goh Chok Tong, former Prime Minister of Singapore, pointed out, “The US
presence has been a determining reason for the peace and stability Asia
enjoys today. It has helped turn an unstable region of tension and strife into
a booming and dynamic Southeast Asia.”15 As just mentioned above,
ASEAN states do not know what will happen if China dominates the
region; therefore, it is too risky for ASEAN to bandwagon with China given
the uncertain nature of China’s rise.
On a similar note, if ASEAN takes sides with the United States, ASEAN
will run into antagonisms, even potential conflicts with China, the potential
hegemon in the region. Besides strategic reasons, the mere economic
interdependence between ASEAN and China also discourages ASEAN’s
siding with the United States in containing China. As then-Secretary
General of ASEAN, Ong Keng Yong, points out during his interview with
the 21st Century Business Herald,

While it is easy and tempting to see China’s rise as an economic threat,

it would also be a mistake to do so. A rapidly growing China is the
engine which powers regional economies and the global economic
train. … Indeed, increased trade with China was one reason why many
of the crisis-hit economies in ASEAN recovered as quickly as they
did.16

It is clear that the economic interdependence between China and ASEAN

imposed unbearable economic costs for the ASEAN states to ally militarily
with the United States in coping with China’s rise.

The “irrelevance” worry

The second challenge for ASEAN is the “irrelevance” concern over the
future role of ASEAN. There has been a longtime debate over whether
ASEAN really matters in the security architecture of the Asia Pacific. Some
scholars criticized ASEAN for “making process, not progress.”17 Others
argue that ASEAN is good at building confidence under conditions of
uncertainties, but not at providing concrete solutions to address real
problems, such as territorial disputes in the Asia Pacific.18
The rise of China will once again put ASEAN’s relevance issue under the
spotlight. One of the major contributions of ASEAN lies in its engagement
of China through multilateral institutions after the Cold War when China
was still hesitant about engaging with the outside world.19 After more than
four decades of opening up, China has been socialized into the international
society and became familiar with the rules and norms of various
international institutions. It is fair to say that ASEAN’s functional goal of
“engaging China” is well accomplished. However, this raises another
question: what can ASEAN do next in the post-China-rise world?
Undoubtedly, the rise of China will fundamentally change the
distribution of power in the system. It is still too early to say what the
international order will be like. If China dominates the region with an over-
all U.S. retreat, ASEAN will have to live with the new hegemon in the Asia
Pacific. Putting aside the question of how hegemonic China will treat
ASEAN, one thing is clear that ASEAN will not matter as much as
previously in the region. It is not because of ASEAN per se, but because
institutions in general will lose their relevance on encountering
preponderant power.
If China’s rise does not bring a unipolar world, but a bipolar system, in
which the United States still remains in the region, then ASEAN has to live
between two poles in the system. How will the three players tango together
in a bipolar world? Particularly, how ASEAN, as a regional organization,
can play a relevant role in a bipolar world is still questionable. Cold War
history tells a story more about competition between the two superpowers
than about any institutions, including the United Nations.
The last scenario is a multipolar world after the rise of China in which
not only the United States, but also other regional powers, such as India and
Japan, share power and influence in the Asia Pacific. ASEAN, then, can
play a more active role in balancing different powers in a multipolar world.
However, it requires an organizational unity and coherence among its
member states. Given the level of intra-regional tensions and conflicts
among the ASEAN states, such as the military conflict between Thailand
and Cambodia in 2011 over the ownership of the Preah Vihear temple and
the diplomatic incident between Indonesia and Malaysia in disputed waters
in 2010, it remains unclear as to how ASEAN can overcome intra-regional
divisions and play a relevant role in a multipolar world in the future.20
More importantly, ASEAN’s centrality of being in the “driver’s seat” in
regional multilateralism was challenged by the rise of China as well. In the
last five years, ascending economic and military power has boosted China’s
confidence in playing a more active and even decisive role in promoting
regionalism and multilateralism in the Asia Pacific. In particular, China
began to change from a “rule-taker” to become a “rule-maker” or “agenda
setter” by initiating and influencing agendas in various multilateral
institutions, such as the APT and the EAS. At the 2009 APT Finance
Ministers meeting, China successfully won “the behind-the-scenes war”
with Japan by providing equal contributions of US$38.4 billion to the
Chiang Mai Initiative, a financial swap arrangement to address short-term
liquidity difficulties in the region under the framework of the APT. It was
the first time China matched Japan’s status as the largest contributor in
international financial institutions. As one scholar points out, “one reason
why the size of the contributions is so contested between China and Japan
lies in the tendency for nations to consider their contributions as voting
power” in future negotiations.21 As such, China has become a driving force
in promoting regional cooperation inside the APT and ASEAN’s original
leadership role in the APT is inevitably undermined by the rise of China.
In 2012, China announced a US$474 million “maritime cooperation
fund” to support maritime cooperation and research activities between
China and ASEAN. This decision was announced at the inaugural meeting
of the Expanded ASEAN Maritime Forum, which included the ASEAN
members plus the eight other member states of the EAS. Clearly one reason
for China to publicize its solely sponsored fund was to boost China’s
influence among the EAS members. However, to effectively evaluate the
real success of China’s influence in the EAS remains difficult as a result of
the expansion of EAS membership. The inclusion of other great powers,
such as the United States, Russia, and India, will definitely balance China’s
weight in the EAS. It is worth noting that officially China still supports
ASEAN’s leadership role in regional multilateral institutions. However,
ASEAN’s “relevance” in regional multilateralism will be overshadowed by
China’s increasing power and influence sooner or later.
The flash-point danger
The third challenge to ASEAN from the rise of China lies in the territorial
disputes between China and four ASEAN members, i.e. the Philippines,
Vietnam, Malaysia, and Brunei, in the South China Sea. Notably, both
ASEAN and China officially stated that the South China Sea disputes are
not a problem between ASEAN—the organization—and China, but
between four individual ASEAN states and China. However, ASEAN has
been technically hijacked by the four Southeast Asian states in their
disputes with China. After the Mischief Incident in 1995, in which China
was exposed to be occupying the disputed (with the Philippines) Mischief
Reef, ASEAN, for the first time showed the unity of the organization by
issuing a strong joint statement to support the Philippines’ appeal to prohibit
the occupation of additional islands in the Spratlys. Reportedly, ASEAN’s
unity was a big surprise to China and led directly to China’s concessions at
the second ARF meeting in August, 1995. China for the first time agreed to
conduct multilateral discussions over the South China Sea disputes with
ASEAN states.
In 2002, China and ASEAN signed the Declaration of Conduct (DOC) in
the South China Sea, in which both sides promised to “resolve their
territorial and jurisdictional disputes by peaceful means,” and “exercise
self-restraint in the conduct of activities that would complicate or escalate
disputes.”22 The DOC is signed by China and all ten members of ASEAN,
not only the four claimants of the South China Sea disputes. Clearly,
ASEAN intended to use its institutional weight to press China in the South
China Sea disputes. For China, signing a non-binding declaration with
ASEAN reflected its diplomatic gesture in alleviating regional suspicions of
China.
Since 2010, China’s assertiveness in the South China Sea has rekindled
regional concerns over the implication of China’s rise. As Johnston points
out, China should not be the only party to blame because it is other
claimants that initiated or provoked the disputes. However, China’s counter-
actions were well beyond expectations.23 One reason is the increasing
military and economic capabilities that empowered China’s reactions in the
South China Sea. The diplomatic tensions in the South China Sea disputes
once again challenged ASEAN’s unity and coherence. At the 2012 ASEAN
ministerial meeting, ASEAN failed to issue a joint statement for the first
time in its 45-year history due to intra-ASEAN divisions on the South
China Sea disputes. While the Philippines strongly advocated listing the
Huangyan/Scarborough Shoal incident in the joint statement, Cambodia
stated that the dispute was only between China and the Philippines, not
between China and ASEAN. Therefore, it should not be mentioned in the
statement.24 It is reported that China’s diplomatic efforts behind the scenes
directly led to Cambodia’s firm position as well as divisions among the
ASEAN states.25
It is not clear how ASEAN will behave toward China in future South
China Sea disputes. If the four ASEAN claimants can unite other members
against China, ASEAN may face a direct conflict with China in the future.
If ASEAN fails to unite behind the four ASEAN claimants, its relevance
and reputation may be seriously damaged in regional affairs. The best
outcome for ASEAN is to facilitate the final resolution of the South China
Sea disputes between China and its Southeast Asian neighbors. However,
this hope seems beyond the original institutional design and function of
ASEAN, i.e. mainly a security consultation and dialogue mechanism.

ASEAN’s institutional balancing against China’s challenge

Facing the above three challenges from China’s rise, ASEAN has adopted
institutional balancing strategies to shape China’s behavior after the Cold
War. Institutional balancing refers to states’ strategies in dealing with
potential threats through multilateral institutions instead of traditional
military means. By using institutions, norms, and rules to either impose
pressures or constrain the behavior of a target state, institutional balancing
can shape, shove, and eventually socialize the direction and pattern of the
target state’s behavior without militarily antagonizing relations with the
target state.26
States can employ two types of institutional balancing strategies to cope
with external threats: inclusive institutional balancing and exclusive
institutional balancing. While the inclusive institutional balancing refers to
a strategy to enmesh the target state into institutions and shape its behavior
through rules and norms of the institutions, exclusive institutional balancing
means to exclude the target state from the institutions and use the unity of
the respective institutions to impose pressures on the target state in order to
change its behavior. ASEAN actually adopted both inclusive institutional
balancing and exclusive institutional balancing strategies when dealing with
China’s rise after the Cold War.

The ASEAN regional forum

The ARF is the typical case of inclusive institutional balancing of ASEAN
in dealing with China’s challenges. Instead of forging a military alliance
with the United States, ASEAN invited both China and the United States to
participate in an ASEAN-led multilateral security dialogue in 1994. As
stated in the Chairman’s Statement at the first ARF meeting, the objectives
of ARF are to “foster constructive dialogue and consultation on political
and security issues of common interest and concern and to make significant
contributions to efforts towards confidence-building and preventive
diplomacy in the Asia-Pacific region.”27
By keeping both America and China in the ARF, ASEAN achieved two
strategic goals. First, ARF can ensure that America can still retain its
strategic interests in the region. Soon after the Cold War, the United States
failed to negotiate a renewal of its military bases, the Clark Air Base and
Subic Naval Base, in the Philippines. Officially, the United States withdrew
its military from the region. Given China’s ascendance, one concern was the
power vacuum left by the U.S. withdrawal and a possible rise of Chinese
domination in the region. Since the ARF is the only security dialogue that
includes all the major powers in the world, the United States was attracted
by the broad institutional setting and security agenda. Through ARF,
America not only can engage China, a potential competitor in the region,
but also has the opportunity to tackle both traditional and non-traditional
threats, such as the Korean nuclear crisis and counter-terrorism in the
region.28 Therefore, although the United States occasionally shows its
frustrations toward the slow progress of the ARF, it still retains its strategic
interests in the ARF, especially after Obama assumed power and launched a
rebalancing strategy in 2011.
Second, the ARF serves an important role for ASEAN in engaging and
socializing China through rules and norms. Before the ARF, China hesitated
to participate in multilateral institutions because its cold-war experience,
especially the Korean War, taught China that multilateral institutions were
bad for China’s security. In order to break the Western isolation after the
Tiananmen incident, China agreed to participate in the ARF meeting in
1994.29 Initially, China’s attitudes toward ARF were defensive in nature and
rejected almost all ARF initiatives and proposals. However, after some
interactions with other participants within the ARF, China gradually
realized that the ARF was a good diplomatic arena to alleviate regional
suspicions over China’s rise. The ASEAN way, i.e. the process of
consultation and consensus building, can facilitate confidence and build
trust between China and the outside world. Therefore, China’s attitudes
toward ARF gradually changed from passive and defensive to proactive and
creative.30
One major function of ARF is to constrain China’s assertive behavior in
the South China Sea disputes. In 1992, ASEAN states issued a joint
declaration, calling for a peaceful resolution in responding to China’s 1992
national law on territorial waters. However, China did not take ASEAN’s
1992 declaration seriously. Qian Qichen, the then Foreign Minister of
China, stated only that China “appreciated some of the basic principles” in
the declaration. In the first ARF meeting in 1994, Qian refused to discuss
the sovereignty disputes over the South China Sea within a multilateral
format although he reiterated China’s peaceful intentions in settling the
disputes.31
As mentioned before, ASEAN states consolidated their common policy
on the South China Sea after the 1995 Mischief Reef incident by issuing a
strong joint statement against China. China was forced to agree to discuss
the disputes on the basis of recognized principles of international law,
including the 1982 Law of the Sea. Later during the ARF and China–
ASEAN dialogues, China modified its assertive behavior in the South
China Sea disputes and engaged in setting up a code of conduct and joint
development with the ASEAN states. In 2003, China signed the Treaty of
Amity and Cooperation to further alleviate ASEAN’s suspicions on the
South China Sea disputes.
The recent flare-ups of the South China Sea disputes between China, on
the one hand, and the Philippines and Vietnam, on the other, put the ARF
and ASEAN under the spotlight again. Scholars have criticized that the
ARF and ASEAN lost their “teeth” against China’s assertiveness in the
South China Sea disputes for a long time.32 It is a fair criticism. However, if
we treat the ARF as a security consultation body for dialogue instead of a
conflict resolution mechanism, the expectation for resolving the South
China Sea disputes seems far beyond the function of the ARF in the first
place. Frankly speaking, the ARF is still at the first stage of confidence
building and moving toward the next stage of preventive diplomacy.33
Therefore, it may still be too early to judge the effectiveness of the ARF in
the South China Sea disputes.

ASEAN Plus Three and East Asia summit

ASEAN Plus Three emerged from the 1997 economic crisis in Southeast
Asia, during which most Southeast Asian countries were hit badly by
currency devaluation and the associated financial and political turmoil. In
December 1997, ASEAN sponsored the first informal East Asia Summit by
inviting China, South Korea, and Japan, later widely known as ASEAN
Plus Three (APT), to set up a self-help economic mechanism to deal with
future economic crises. The first summit did not achieve anything
substantial besides leaders’ rhetorical pledges for regional cooperation. The
establishment of APT, however, reflected a regional resentment toward the
United States for its lukewarm attitude and arrogant policy toward Asian
countries during the crisis.34
At the 1998 APT meeting in Hanoi, the summit was further
institutionalized by the ASEAN states. The APT leaders agreed to hold the
summit regularly. In addition, the APT would include a series of ministerial
level meetings for finance and foreign ministers. The first substantial
concrete achievement of APT was the Chiang Mai Initiative reached at the
2000 APT summit in Thailand. The Chiang Mai Initiative established a
regional currency swap facility between the central banks to enable the
states to better protect themselves against future currency speculators’
attacks. In addition, it called for cooperation in the areas of capital flow
monitoring, self-help and support mechanisms, and international financial
reforms.
 The Chiang Mai Initiative Multilateralization (CMIM) Agreement was
signed on December 28, 2009. In 2012, the APT reached an agreement to
expand the pool of foreign exchange reserves to US$240 billion.35
Although it is still hard to evaluate whether the CMIM currency swap
framework would work if another crisis occurs, given the diverse interests
within the APT, the APT has the potential to become the dominant regional
institution in East Asia as some scholars point out.36
Because the APT framework excludes the United States from the
institution, it can be treated as an exclusive institutional balancing strategy
of ASEAN toward the United States. On the one hand, ASEAN, with
support from three major powers in East Asia, sent a clear message to the
United States through the APT that Asian countries could take care of their
financial problems without relying on external help. On the other hand, the
unity of the APT states can increase the bargaining power of ASEAN in
dealing with the United States.
It is probably for the same reason that the three East Asian countries
support the APT in the first place. China, in particular, saw the value of the
APT given its exclusive institutional setting against the United States. It is
in China’s interests to strengthen the power and influence of the APT so that
the APT can potentially become an institutional balancing tool for China to
deal with U.S. pressure. According to Zhang Yunling, Chinese authorities
have the following ambitious objectives for APT: a concerted voice in
international affairs; a regional parliamentary committee; defense ministers’
meeting and East Asian security cooperation council; and joint action on
cross-border issues.37
In 2005, the potential competition for leadership in the APT caused
ASEAN to expand the framework of the APT to the East Asia Summit
(EAS) by inviting three outside members, Australia, New Zealand, and
India to join. It is then called ASEAN Plus Six. The establishment of EAS is
to use outside members to balance and dilute China’s influence in the APT.
In 2010, the United States and Russia were invited to join the EAS. As one
Southeast Asian diplomat mentioned to the press, “closer ties with the
United States and Russia will provide a balancing role as China’s economic
and military influence rises in the region. … There must be a
counterbalance, otherwise one country will dominate.”38
 The expansion of the EAS is a double-edged sword for ASEAN. On the
one hand, the expansion of the EAS reflects greater interests in regionalism
in the Asia Pacific among great powers in the region. It further highlights
the importance of ASEAN as a central force in promoting regionalism in
the region. On the other hand, the more members in the institution, the less
effective the institution will be. ASEAN’s leadership role is also eroded by
the new members, such as the United States.
However, from the institutional balancing perspective the expansion of
the EAS serves ASEAN’s institutional balancing function against both
China and the United States. First, the EAS includes both nations in the
institutions. Since the prerequisite for the EAS membership is to sign the
Treaty of Amity and Cooperation (TAC), it means that both China and the
United States are constrained by their commitment to use non-violent
means to solve differences and disputes as specified by the TAC.39 Whether
the United States and China really keep their commitments is another
matter in the context of a future conflict, but both nations’ behavior will be
inevitably constrained by their commitments. Thus, ASEAN shapes, not
determines, the future behavior in the region of both China and the U.S.
Second, through expanding the EAS, ASEAN actually provided a
competitive arena for both China and the United States in an institutional
setting. We can imagine that China and the United States will compete for
leadership in the EAS, probably involving Japan and India as well. The
competition for leadership in the EAS will offer ASEAN a golden
opportunity to play a balancer role among these great powers. In other
words, ASEAN will be treated as more valuable in the institutional
competition among great powers than in a mere power transition between
China and the United States. However, how ASEAN can play this
institutional game depends heavily on the policies of the great powers,
especially the United States and China, toward multilateral institutions in
general and the EAS in particular in the future.

RCEP and TPP

The Regional Comprehensive Economic Partnership (RECP) is an instance
of ASEAN’s institutional balancing in the economic domain. It was first
introduced in the ASEAN Leaders’ Summit in Bali in 2011. By 2011, there
were two competing versions of regional free trade agreements. On the one
hand, China supported a free trade agreement based on the APT framework,
i.e. a free trade agreement for only ASEAN states and three East Asian
countries. China established a free trade agreement with ASEAN in 2010
and intended to expand its free trade agreements with South Korea and
Japan. On the other hand, Japan proposed a regional free trade agreement
based on the ASEAN Plus Six framework, i.e. ASEAN Plus Three with the
additional three countries of India, Australia, and New Zealand.40 Japan’s
expanded version of the regional framework aims at weakening China’s
dominance in regional economic affairs.
In addition, the U.S.-led Trans-Pacific Partnership (TPP) also fueled the
competition for free trade agreement and economic liberalization. The TPP
is more selective and high-standard in terms of economic liberalization
from its members. It includes provisions to “protect labor rights and
environmental standards, reform state-owned enterprises, and strictly
protect intellectual property, and boldly eliminates tariffs.”41 Therefore, it is
argued that the TPP is more suitable for developed economies instead of
developing nations.
ASEAN was caught between these competing versions of a regional
trade agreement. It was forced to choose between China and Japan’s
proposals, and it also faced tremendous pressure from the United States
regarding the TPP. Eventually, ASEAN adopted a balanced measure by
introducing the RCEP, in which ASEAN plays a central role in promoting
trade liberalization in the region. On the one hand, the RCEP initially
includes ASEAN and six other countries, which have free trade agreements
with ASEAN. The basic framework actually fits what Japan has suggested,
i.e. the ASEAN Plus Six framework. However, since the RCEP does not
include the United States, China also sees it as a counterbalancing measure
against the TPP, led by the United States. Although it is not the best that
China desires, it is still better than nothing. Therefore, China also registered
its strong support to the RCEP once it was announced in August 2012.42 At
the 2013 APT meeting, Premier Li Keqiang further pushed for complete
negotiations on the RCEP by 2015. Some observers believe that “Li’s
remarks about the RCEP deal reflected Beijing’s ambition to play a big role
in integrating the fast-growing Asia-Pacific region.”43
 It should be noted that both RECP and TPP are still at the negotiation
stage. It is hard to judge which one will be more successful. However, the
RECP is not an exclusive trade liberalization scheme since all countries can
join as long as they agree to comply with the RCEP rules and guidelines. It
will bring two new dynamics in the future. First, some countries can join
both the RCEP and TPP, such as Singapore and Brunei in ASEAN, and
Australia outside ASEAN. Second, the United States can also potentially
join the RCEP in the future as long as it reaches a free trade agreement with
ASEAN and follows the rules of the RCEP.
Consequently, it is difficult to measure how effective the RCEP can be as
a balancing tool for either China or ASEAN in dealing with the economic
liberalization pressure from the United States. The best ASEAN can do is to
use its leadership role in the RECP to set a series of norms and rules which
can protect well the economic interests of the ASEAN states. Both China
and the United States will have to abide by the rules and norms of the
RCEP if they intend to join the institution. However, since China is also a
founding member of the RCEP, how to balance China’s interests and
influences in setting the agendas and rules of the RCEP will be a great
challenge for the ASEAN states. ASEAN can rely on other regional powers,
such as Japan, South Korea, Australia, and India, to act as a counterweight
to China’s influence in the RECP. Yet institutional competition in terms of
agenda setting and rule making will be the major game in town for trade
liberalization in the Asia Pacific in the next decade.

The ASEAN community

The ASEAN community building process started in 2003. At the ninth
ASEAN Summit in Bali in October 2003, ASEAN leaders declared their
intention to build the ASEAN Community by 2020. At the 2007 ASEAN
Summit, the leaders affirmed their strong commitment to speeding up the
process of establishing the ASEAN Community by the end of 2015 and
signed the Cebu Declaration on the Acceleration of the Establishment of an
ASEAN Community by 2015. In November 2007, ASEAN leaders signed
the ASEAN Charter, a constitution of ASEAN that provides a
comprehensive rule-based and people-oriented constitutional framework for
community-building.44
 It is ASEAN’s plan to create “an EU-style community,” which constitutes
a political community with a shared legal entity and a single free-trade area
for the region. Given the different political systems, cultural diversities, and
economic gaps among the ten members of ASEAN, it is really an
ambitious, if not an impossible, goal to achieve for ASEAN. For example,
Simon points out that there will be a “long and bumpy road [for ASEAN] to
[become a] community.”45 Critics also point out that the ASEAN Charter
actually has “no teeth” since it has no provision to sanction members that
break the rules and norms, such as human rights violations, signed by the
members.46
The strategic reason for ASEAN community building lies in the
transformation of the distribution of power in the system. The 1997/98
economic crisis slowed down the economic development of the ASEAN
states. The U.S. war on terror after the September 11 terrorist attacks
brought ASEAN states to the realization of the strategic impacts of U.S.
unilateral diplomacy. Again, China’s rise gradually pushed the power
transition in the international system. ASEAN, as a prominent regional
organization in the 1980s and the 1990s, gradually lost its relevance in
world politics. Indonesia, as a leader of ASEAN, was deeply concerned
over the future role of ASEAN in the new power configurations of the
international system.
In 2003, Indonesia was serving as the ASEAN chair. Taking the
leadership opportunity, Indonesia launched the “ASEAN Security
Community” idea at the ASEAN Senior Officials Meeting. As Rizal Sukma
clearly points out, the background of the ASEAN Security Community is
based on the fact that ASEAN has “lost the diplomatic centrality it had
enjoyed … the world has entered the age of terrorism since 9/11 and
ASEAN is once again posed with the tremendous challenge of proving
itself as an organization worthy of its existence.”47 It is clear that Indonesia
also wanted to resume its leadership role in ASEAN after the collapse of the
Suharto regime in 1998.
Indonesia’s original proposal included establishing a counter-terrorism
center, training peacekeeping forces, setting up a center for cooperation
against non-traditional threats, and having regular meetings of ASEAN
police and national defense ministers. However, this ambitious proposal
received mixed responses from other member states. Although all members
shared Indonesia’s strategic anxiety over the future of ASEAN in world
affairs, many members did not want to push ASEAN in the direction of
becoming a military alliance.48 As a result, the final agreement among
ASEAN leaders is to downplay the security-oriented feature of the ASEAN
community building. Instead, the Declaration of ASEAN Concord II (Bali
Concord II) signed by ASEAN leaders specified three pillars of the ASEAN
Community: the ASEAN Political-Security Community, the ASEAN
Economic Community and the ASEAN Socio-Cultural Community.
Later, Indonesia continued to push its security-focused community
building plan, but received strong resistance from other member states. For
example, Indonesia’s proposal to establish an ASEAN peacekeeping force
was rejected by Singapore, Vietnam, and Thailand because of strong
implications for state sovereignty and interference in internal affairs.49
Nevertheless, the ASEAN Community’s building plans still moved forward.
As mentioned above, the ASEAN Charter is a milestone of ASEAN’s
community building since it provided a legal basis for further integration
among ASEAN states.
Despite other countries’ resistance efforts, Indonesia pushed through
some of its proposals, such as setting up a regular annual meeting among
ASEAN defense ministers. Based on the ASEAN Defense Minister
Meeting, ASEAN has furnished an ASEAN Defense Ministers Meeting-
Plus, which includes eight outside countries since 2010. This ASEAN-plus
institutional framework is similar to the APT, ASEAN Plus Six, and the
East Asia Summit. Actually, the eight outside members of the ASEAN
Defense Ministers Meeting-Plus are exactly the eight countries in the East
Asia Summit, including the United States, China, Japan, Russia, South
Korea, India, Australia, and New Zealand. It is clear that ASEAN intends to
build a new framework for security consultation and cooperation in the Asia
Pacific around the ASEAN Community.50
From an institutional balancing perspective, the ASEAN Community
building process is an exclusive balancing strategy ASEAN employed in
order to cope with external threats and pressures, especially from China. As
George Yeo, the then Singapore Foreign Minister, stated in 2008:
 With the rise of China and India changing the polarity of the world, we
[ASEAN] must make sure that the political, economic and security
architecture of the region takes into account the interest of ASEAN. …
We must take an active interest in regional and global affairs and play
a role which is helpful to others. We ensure the centrality of ASEAN in
the evolving regional architecture.51

Although it is still debatable whether the ASEAN Community can achieve

its planned goals in 2015, one thing is clear: ASEAN is trying to strengthen
its unity and coherence through building the ASEAN Community. One
prominent Indonesian politician envisions, “if the ASEAN Community is
materialized, ASEAN countries will be the key players in international
economy and politics in the competition with European Union, China, and
East Asia.”52 It is ASEAN’s goal that the community building effort can
strengthen ASEAN members’ voices and weight in world politics in the
future.
One major challenge that China’s rise will pose to the ASEAN
Community remains the South China Sea disputes between China and four
ASEAN states. Within the ASEAN Community the ASEAN states should
adopt a “more coordinated, cohesive and coherent ASEAN position on
global issues of common concern.”53 Thus, the South China Sea disputes
will potentially become a flash-point between China and either ASEAN or
the ASEAN Community in the future, although only four of the ASEAN
states indeed have disputed claims with China over the South China Sea.
How the ASEAN Community handles this potential conflict with China is
one of the toughest tasks for ASEAN leaders in the next five to ten years.

Conclusion
The rise of China brings both challenges and opportunities to the ASEAN
states. The structural transformation of the international system from
unipolarity to a non-unipolar world causes strategic uncertainties and
anxieties for the ASEAN states, which try to live with great powers in the
Asia Pacific. China’s strong economy and huge domestic market, on the
other hand, provide an unprecedented opportunity for the ASEAN states to
develop their own economies. Therefore, in the context of deepening
economic interdependence between ASEAN and China, traditional military-
based balancing strategies, such as forming alliances, are no longer suitable
for ASEAN states to pursue both security and prosperity in the region.
Relying on ASEAN, the prominent regional organization, the Southeast
Asian states employ institutional balancing strategies to deal with the
challenges imposed by the rise of China. Through the ARF, APT, EAS, and
RCEP, ASEAN enmeshes China and other potential players, such as the
United States and Japan, into various multilateral institutions to shape and
socialize great powers with regional rules and norms. It is clear that
ASEAN’s institutional balancing strategies will receive strong
countervailing measures from China as well as other great powers. For
example, China will definitely use its economic might and diplomatic clout
to influence the agenda-setting and rule-making processes in the
institutions. The United States will not be tolerant of ASEAN’s leadership
in regionalism forever. Therefore, ASEAN will face tremendous pressures
and challenges from other states inside the multilateral institutions that they
originally initiated, designed, and built for the future.
The institutional competition among states will be a new feature of the
power transition in the twenty-first century. Unlike the previous power
transitions in the nineteenth and the twentieth centuries, deepening
economic interdependence and globalization will increase the economic
costs for military-based competition among states. If ASEAN’s experience
in the 1990s and the early 2000s can be generalized to the whole system, we
can confidently perceive a power transition through institutional struggles
and competitions.54 ASEAN, in this case, can potentially make a great
contribution to a peaceful transformation of the international system in the
future.
However, institutional balancing is by no means the only game in town.
The recent diplomatic tensions between China and some ASEAN states in
the South China Sea have emboldened the Philippines and Vietnam to seek
military assistance from the United States. With the U.S. “pivot” or
“rebalancing” strategy in 2011, traditional military-based competition and
potential conflict between China and the United States with its Asian allies
are seemingly on the horizon.55 How to resolve the South China Sea
disputes peacefully will be a critical task for both the Chinese and ASEAN
leaders in the next decade or two. Whether China’s rise can be peaceful
depends not only on China’s own foreign policy, but also on how other
states, especially ASEAN, engage, shape, and socialize China through
multilateral institutions.

Notes
1 See “ASEAN-UN Strive for Closer Cooperation,” October 9, 2012. www.asean.org/news/asean-
secretariat-news/item/asean-united-nations-aims-closer-cooperation.
2 It is worth noting that ASEAN is a diverse regional organization in which its member states
have different interests and positions toward China. Although ASEAN pledged to organize the
ASEAN communities in 2015, there is still no official ASEAN policy toward China so far.
Therefore, I explore the convergent policy of different ASEAN states in dealing with China
while acknowledging the diverse policy options and interests of individual ASEAN states
toward China.
3 BBC News, “China Overtakes Japan as World’s Second-Biggest Economy,” February 14, 2011,
www.bbc.co.uk/news/business-12427321.
4 Jack Perkowski, “China Leads in Foreign Direct Investment,”
www.forbes.com/sites/jackperkowski/2012/11/05/china-leads-in-foreign-direct-investment.
5 Bloomberg News, “China Eclipses U.S. as Biggest Trading Nation,”
www.bloomberg.com/news/2013–02–09/china-passes-u-s-to-become-the-world-s-biggest-
trading-nation.html.
6 “China’s Defense Budget to Grow 11.2 pct in 2012: Spokesman,” www.english.news.cn, March
4, 2012.
7 Christopher Layne, “This Time It’s Real: The End of Unipolarity and the Pax Americana,”
International Studies Quarterly 56 (2012): 203–213.
8 Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a
New Global Order (London and New York: Penguin 2009).
9 See “ASEAN-China Dialogue Relations,” www.asean.org/asean/external-
relations/china/item/asean-china-dialogue-relations.
10 Toh Han Shih, “Xi Jinping’s and Li Keqiang’s ASEAN Visits to Boost Regional Economies,”
South China Morning Post, October 12, 2013,
www.scmp.com/business/economy/article/1329794/xi-jinpings-and-li-keqiangs-asean-visits-
boost-regional-economies.
11 S. Pushpanathan, “Building an ASEAN-China Strategic Partnership,” The Jakarta Post, July 1,
2004.
12 See “The Dragon’s New Teeth: A Rare Look inside the World’s Biggest Military Expansion,”
The Economist, April 7, 2012.
13 They are Indonesia, Malaysia, Singapore, Thailand, and the Philippines.
14 Evelyn Goh, “Great Powers and Hierarchical Order in Southeast Asia: Analyzing Regional
Security Strategies,” International Security 32, no. 3 (2007): 113–157; Kai He, Institutional
Balancing in the Asia Pacific (New York and London: Routledge, 2008); Alice Ba,
 (Re)Negotiating East and Southeast Asia: Region, Regionalism, and the Association of
Southeast Asian Nations (Stanford: Stanford University Press, 2009).
15 “ASEAN-US Relations: Challenges,” Goh Chok Tong, Prime Minister of Singapore, Keynote
speech at the ASEAN-United States Partnership Conference New York, September 7, 2000.
16 Ong Keng Yong, “Secretary-General of the ASEAN Interview by 21st Century Business
Herald,” Singapore, October 11, 2004, www.asean.org/resources/item/sg-interview-by-21st-
century-business-herald-singapore.
17 David Jones and Michael Smith, “Making Process, Not Progress: ASEAN and the Evolving East
Asian Regional Order,” International Security 32, no. 1 (2007): 148–184.
18 See Sheldon Simon, “ASEAN and Multilateralism: The Long, Bumpy Road to Community,”
Contemporary Southeast Asia 30, no. 2 (2008): 264–292; Ralf Emmers and See Seng Tan, “The
ASEAN Regional Forum and Preventive Diplomacy: Built to Fail?” Asian Security 7, no. 1
(2011): 44–60; Takeshi Yuzawa, “Japan’s Changing Conception of the ASEAN Regional Forum:
From an Optimistic Liberal to a Pessimistic Realist Perspective,” Pacific Review 18, no. 4
(2005): 463–497.
19 See Alice Ba, “Who’s Socializing Whom? Complex Engagement and Sino-ASEAN Relations,”
Pacific Review 19, no. 2 (2006): 157–179.
20 Mustaqim Adamrah, “ASEAN Urged to Mediate Intra-Regional Conflicts,” The Jakarta Post,
August 19, 2010.
21 Takashi Terada, “ASEAN Plus Three: Becoming more Like a Normal Regionalism?” in Mark
Beeson and Richard Stubbs, Routledge Handbook of Asian Regionalism (London and New
York: Routledge, 2012), p. 373.
22 See “Declaration on the Conduct of Parties in the South China Sea,”
www.asean.org/asean/external-relations/china/item/declaration-on-the-conduct-of-parties-in-the-
south-china-sea.
23 Alastair Iain Johnston, “How New and Assertive Is China’s New Assertiveness?” International
Security 37, no. 4 (2013): 7–48.
24 Ian Storey, “ASEAN and the South China Sea: Deepening Divisions,” NBR Policy Q and A,
July 16, 2012.
25 Robert Sutter and Chi-hao Huang, “China Gains and Advances in South China Sea,”
Comparative Connections, January 2013.
26 For institutional balancing, see He, Institutional Balancing in the Asia Pacific.
27 See ASEAN Secretariat, “The First ARF Chairman Statement,” Bangkok, July 1994.
28 See Michael Leifer, “The ASEAN Regional Forum,” Adelphi Paper, no. 302 (1996); He,
Institutional Balancing in the Asia Pacific; and Evelyn Goh, “The ASEAN Regional Forum in
United States East Asian Strategy,” The Pacific Review 17, no. 1 (2004): 47–69.
29 See Rosemary Foot, “China in the ASEAN Regional Forum: Organizational Processes and
Domestic Modes of Thought,” Asian Survey 38, No. 5 (1998): 425–440.
30 He, Institutional Balancing in the Asia Pacific, 133–139; and Thammy Evans, “The PRC’s
Relationship with the ASEAN Regional Forum: Realpolitik, Regime Theory or a Continuation
of the Sinic Zone of Influence System?” Modern Asian Studies 37, no. 3 (2003): 749–750.
31 Rodney Tasker, “Facing up to Security,” Far Eastern Economic Review, August 6, 1992, p. 9.
32 See Michael Leifer, “The ASEAN Peace Process: A Category Mistake,” The Pacific Review 12,
no. 1 (1999): 25–39; Ralf Emmers, Cooperative Security and the Balance of Power in ASEAN
and the ARF (London: RoutledgeCurzon, 2003); Rudolfo Severino, The ASEAN Regional
Forum (Singapore: Institute of Southeast Asian Studies, 2009); Carlyle Thayer, Southeast Asia:
Patterns of Security Cooperation (Canberra: Australian Strategic Policy Institute, 2010);
Sheldon W. Simon, “The ASEAN Regional Forum: Beyond the Talk Shop?” NBR Analysis, July
2013.
33 See Ralf Emmers and See Seng Tan, “The ASEAN Regional Forum and Preventive Diplomacy:
Built to Fail?” Asian Security 7, no. 1 (2011): 44–60.
34 Stuart Harris, “Asian Multilateral Institutions and Their Response to the Asian Economic Crisis:
The Regional and Global Implications,” The Pacific Review 13, no. 3 (2000): 495–516.
35 “ASEAN+3 Finance Ministers and Central Bank Governors’ Meeting Successfully Concludes,”
Press Release, Ministry of Strategy and Finance (Korea), May 3, 2012.
36 Richard Stubbs, “ASEAN Plus Three: Emerging East Asian Regionalism,” Asian Survey 42, No.
3 (2002), 440–455; for a criticism of Asian regionalism, see John Ravenhill, “East Asian
Regionalism: Much Ado About Nothing?” Review of International Studies 35, no. S1 (2009):
215–235.
37 Cited from Joseph Y.S. Cheng, “Sino-ASEAN Relations in the Early Twenty-First Century,”
Contemporary Southeast Asia 23, no. 3 (2001), p. 432.
38 “US, Russia to join East Asia Summit,” AFP (Agence France Presse), July 20, 2010.
39 The TAC is a non-aggression pact, which requires all signatories to resolve disputes peacefully.
It was originally signed by the ASEAN members in 1976.
40 Murray Hiebert and Liam Hanlon, “ASEAN and Partners Launch Regional Comprehensive
Economic Partnership,” Critical Questions, December 7, 2012, http://csis.org/publication/asean-
and-partners-launch-regional-comprehensive-economic-partnership.
41 Ibid.
42 Sanchita Basu Das, “The Trans-Pacific Partnership as a Tool to Contain China: Myth or
Reality?” June 8, 2013, East Asia Forum, www.eastasiaforum.org/2013/06/08/the-trans-pacific-
partnership-as-a-tool-to-contain-china-myth-or-reality.
43 Teddy Ng, “Li Keqiang pushes for Asian free trade pact inside two years,” South China
Morning Post, 11 October, 2013, www.scmp.com/news/china/article/1328942/li-keqiang-
pushes-asian-free-trade-pact-inside-two-years.
44 Ong Keng Yong, “ASEAN and Community-Building: Employing ASEAN to Reengage the
Asian Community,”, IP Journal (German Council on Foreign Relations) Winter (2007): 22–28;
for an excellent theoretical and analytical examination of ASEAN security community, see
Amitav Acharya, Constructing a Security Community in Southeast Asia: ASEAN and the
Problem of Regional Order (London: Routledge, 2001).
45 Simon, “ASEAN and Multilateralism,” p. 264.
46 “Momentous Day for ASEAN as Charter Comes into Force,” AFP (Agence France Presse),
December 15, 2008; also see Donald Emmerson, “Challenging ASEAN: A ‘Topological’ View,”
Contemporary Southeast Asia 29, no. 3 (2007): 424–446.
47 Rizal Sukma, “The Future of ASEAN: Towards a Security Community,” Paper presented at a
seminar on “ASEAN Cooperation: Challenges and Prospects in the Current International
Situation,” New York, June 3, 2003.
48 Tomotaka Shoji, “ASEAN Security Community: An Initiative for Peace and Stability,” NIDS
Security Reports no. 9 (December 2008): 17–34.
49 Barry Wain, “ASEAN – Jakarta Jilted: Indonesia’s Neighbors are not Very Supportive of Its
Vision of a Regional Security Community,” Far Eastern Economic Review, June 10, 2004.
50 See East Asian Strategic Review 2012 (Tokyo: National Institute of Defense Studies, 2013).
51 Statement by Mr George Yeo, Minister for Foreign Affairs of Singapore and Chairman of the
41st ASEAN Standing Committee at the Closing Ceremony of the 41st ASEAN Ministerial
Meeting and Handing Over of the ASEAN Standing Committee Singapore, July 24, 2008.
52 Xinhua News, “ASEAN Community Expected to be Formed in 2015,” March 4, 2008,
www.chinadaily.com.cn/world/2008–03/04/content_6507325.htm.
53 See the “ASEAN Leaders’ Joint Statement on the ASEAN Community in a Global Community
of Nations,” May 8, 2011, www.asean.org/Joint_Statement_ASEAN_Community.pdf.
54 For different types of regional order in Asia, see Amitav Acharya, “Power Shift or Paradigm
Shift? China’s Rise and Asia’s Emerging Security Order,” International Studies Quarterly,
(2013) doi: 10.1111/isqu.12084.
55 For US “pivot” policy, see Hillary Clinton, “America’s Pacific Century,” Foreign Policy 189,
no. 1 (2011): 56–63. For criticisms, see Robert Ross, “The Problem with the Pivot,” Foreign
Affairs 91, no. 6 (2012): 70–82.
10 Evaluating Southeast Asian
responses to China’s rise
The vital context of managing great
power resurgence
Evelyn Goh

Over the past 25 years, Southeast Asian states have arguably thought and
done more in response to the growth of Chinese power than any other
country. Individually, or collectively in the form of ASEAN, they have led
East Asia and the Asia-Pacific in interpreting and framing China’s rise, in
creating norms and institutions to constrain and socialise it, and in
developing innovative strategies to manage the structural impacts of a
resurgent China. However, these achievements are tempered by structural
and ideational limitations. For ASEAN states, China policy is not just about
China, but is embedded within wider considerations about great power
management, and enmeshed with intra-mural relationships and sensitivities.
This chapter suggests that the fundamental problem with Southeast Asian
strategies for managing China’s growth is the lack of recognition that post-
Cold War East Asia has faced the parallel resurgence of both China and the
United States, not just the rise of China.
Analysts tend to focus on China’s resurgence, but the United States has
also been recovering steadily the strategic initiative in East Asia over the
last two decades, in spite of the disappearance of the Cold War rationale and
the distraction of the global war against terrorism. Crucially for our
purposes, this trajectory of American resurgence has been significantly
facilitated by Southeast Asian policies and actions. Thus, we are dealing not
with the rise of one great power and either the static incumbency or decline
of the other; instead, East Asia faces the parallel recovery of both American
and Chinese power. A failure to recognise this parallel resurgence – for
instance, by seeing China as the only force disrupting the distribution of
power, or by focusing constantly on the uncertainty of U.S. commitment to
the region – leads to the wrong questions being asked, and to actions taken
that exacerbate the intensifying security dilemma.
The following analysis is in two parts. The first section examines China
policy in the context of Southeast Asian strategies to manage regional great
powers during the post-Cold War strategic transition, highlighting the
initiative and innovation, but also exposing the particular instrumental
motivations specific to this collection of small states. The latter especially
created significant limitations to how much these strategies can ultimately
help to manage great power relations and regional order – a problem that
has become increasingly obvious over the last five years. The second
section analyses Southeast Asian responses to the Obama administration’s
‘pivot’ to Asia and the implications for their China policy as a way to
highlight the limitations discussed in the first section in the diplomatic,
military and economic realms. The chapter concludes by warning against
‘business-as-usual’ strategic thinking in Southeast Asia in light of the
growing dangers of not recognising the need to manage the rise of both
China and the United States.

China policy context: post-Cold War Southeast Asian strategies

vis-à-vis great powers
China’s strategic ascendance coincided with the end of the Cold War,
generating significant implications for Southeast Asia’s intra-mural as well
as extra-mural security considerations.
While the end of the Indochina conflict facilitated the full integration of
communist Southeast Asian states into ASEAN, this development also
exacerbated the twin challenges of maintaining the Association’s internal
cohesion and external relevance (Acharya 2001). At the same time, the
Soviet withdrawal from Southeast Asia and the success of China-ASEAN
joint pressure in resolving the Indochina conflicts reinforced China’s
strategic role in the region. The late 1980s had already seen brisk rates of
growth in China’s economy a decade into Deng Xiaoping’s reforms, and
when the settlement of the Indochina conflict removed the de facto
alignment between China and ASEAN, it also fuelled old suspicions about
China’s ideological and material influence in mainland Southeast Asia. The
imperative of finding new ways to manage a rising China, to reap its
economic benefits while containing the negative aspects of its growing
power, has increased over time. Moreover, the end of the global Cold War
also dissolved the raison d’être for U.S. forward deployment in Southeast
Asia. After decades of supporting the anachronistic U.S. presence in spite of
ASEAN’s rhetoric about regional autonomy, the Philippines ejected U.S.
forces from its air and naval bases in 1991. Rather than stimulating a wider
ASEAN drive toward substantive security autonomy, however, this brought
to a head deep-seated worries about a potential U.S. withdrawal from
Southeast Asia and the resulting unstable ‘power vacuum’. Essentially,
many ASEAN states – particularly Singapore, Indonesia and Malaysia –
demonstrated a belief in the ability of the U.S. to provide hegemonic
stability in the region, strengthened by their caution vis-à-vis China’s
growing power and influence.

Strategies
Southeast Asian post-Cold War strategies to manage great powers in East
Asia centred on two aims. The first and more publicly aired one was to
seize the initiative to frame international understandings of China’s rise in
terms of opportunities as well as potential threats, and to shift the
parameters of policies to manage the China challenge away from
confrontational containment towards cooperative socialisation. The
centrepiece of Southeast Asia’s approach to China is deep political and
economic engagement: ASEAN led in inviting China to become a
‘consultative partner’ in 1991, developing dialogue on political, scientific,
technological, economic and ‘non-traditional’ security issues, and
enmeshing Beijing in wider regional institutions. The expectation is that
sustained interaction will persuade Chinese leaders of the utility of abiding
by international rules and norms, so as to re-integrate China peacefully into
the regional and international order as a responsible great power.1 ASEAN
states argued repeatedly that there remained time to socialise China as it
rose, and that engagement was preferable to self-fulfilling prophesies if
China were treated as an enemy. Motivated by geography – Southeast Asian
states would always have to live in the shadow of China – but also by the
region’s strategic history and cultural memory of the stable Sino-centric
regional hierarchy prior to Western imperialism, these arguments mitigate
against strategies to contain China outright (Kang 2003).
In the 1990s, as Beijing sought to rehabilitate its international reputation
after the Tiananmen killings, the various ASEAN-led regional institutions,
especially the ASEAN Regional Forum (ARF ), became a premier
demonstration precinct for China to showcase its new sociability and to
reassure its neighbours about its benign intentions and commitment to a
‘peaceful rise’ (Foot 1998; Johnston 2008; Zheng 2005). Beijing complied
with the ARF norm of issuing defence white papers, hosted ARF meetings,
and used the ARF to introduce its ‘new security concept’ stressing peaceful
coexistence and cooperative security. Along with its initiative for a China–
ASEAN free trade area and multilateral negotiations with ASEAN leading
to the 2002 Declaration of Conduct regarding the South China Sea
territorial disputes, these all suggested that China was being socially and
morally bound to peaceful modes of interaction (Goh 2007; Shambaugh
2004/5).
Yet, Southeast Asian engagement of China was distinctive for its
embeddedness within the ‘omni-enmeshment’ of multiple great powers with
a stake in East Asian security (Goh 2007/8). ASEAN’s engagement efforts
were aimed not only at China, but also at the U.S., Japan, India and Russia.
This makes their aim of great power socialisation at once more ambitious,
but also more intertwined with balance of power logic and politics.
Southeast Asia’s omni-enmeshment of great powers within overlapping
regional institutions is a key factor in their balancing strategies, not an
alternative to them. By enfolding China into a web of multilateral
cooperation frameworks that also involve other major powers, Southeast
Asian states ensure mutual compliance by these great powers’ greater
ability to monitor and deter each other. At the same time, great powers can
use these institutions as political arenas for containing, constraining,
diluting or blocking each other’s power.2 China’s preference for ASEAN+3
versus Japan’s promotion of the East Asia Summit is often seen as a prime
example of balance of power by other means, for instance. More
constructively, omni-enmeshment also helps to channel great power
competition in normative ways within the constraints of institutions. For
instance, over the last two decades, Beijing’s willingness to stake a large
part of its regional legitimacy as a great power on its relationship with
Southeast Asia has increased the pressure on Washington to pay more
attention itself to legitimising its perceived central role in regional security.
Thus, the Obama administration was persuaded to sign up to ASEAN’s
Treaty of Amity and Cooperation (TAC) in 2010, for instance, in order to be
included in the EAS alongside China, Japan and India.
The second, less publicly discussed goal of Southeast Asian strategies
vis-à-vis great powers was to ensure U.S. strategic preponderance. That is,
Southeast Asian enmeshment and constrainment of China hinges upon
continued U.S. security dominance in the Asia-Pacific, since this is believed
to be the most critical element in persuading Beijing that any aggressive
action would be too costly and unlikely to succeed. As the Cold War was
winding down, in spite of being relatively peripheral ‘spokes’ in the San
Francisco system of U.S. alliances in the Asia-Pacific, Southeast Asian
states were front-runners in facilitating a continued U.S. forward presence
and deterrence in the region. In place of the permanent bases in the
Philippines, other countries, especially Singapore, provided facilities for
maintenance, repair, and for the relocation of supporting infrastructure for
the Seventh Fleet. By 1992, worsening U.S.-Japan trade conflicts, Japan’s
constitutional revision to allow the overseas deployment of peacekeepers,
and the passage of a law in China making extensive claims to the South
China Sea, all prompted additional access agreements, as well as every
ASEAN leader’s public support for the U.S. security role in the region.3
Indeed, ASEAN’s choice of a wide ‘Asia-Pacific’ membership for the
ARF – rather than a more geographically limited ‘East Asia’ one – centred
on the need to ‘keep the U.S. in’. Faced with the acute uncertainty of
continued U.S. security commitments, ASEAN states’ reaction was to
reinforce their security binding of the U.S. using a wide variety of means,
including multilateral institutions. This desire to insure against strategic
uncertainty by extending and bolstering one great power’s overwhelming
military preponderance required justification, and the ARF crucially helped
to lend legitimacy to ASEAN’s desire for the preponderant role of the U.S.
in regional security. As the Singapore Prime Minister put it: through the
ARF, ASEAN had ‘changed the political context of U.S. engagement’
because these countries had ‘exercised their sovereign prerogative to invite
the U.S. to join them in discussing the affairs of Southeast Asia’. As a
result, ‘no one can argue that the US presence in Southeast Asia is
illegitimate or an intrusion into the region’ (Goh 2001).
George W. Bush’s ‘Global War On Terror’ (GWOT) in the wake of the
terrorist attacks in the U.S. in September 2001 provided Southeast Asia with
opportunities to prove their strategic relevance and entrench security ties
with the U.S. ASEAN adopted various declarations, enhanced regional
cooperation in intelligence-sharing and coordinating anti-terrorism laws,
and set up a regional anti-terrorism training centre with U.S. funding. The
ARF adopted an agenda for implementing UN anti-terrorist measures,
including measures to block terrorist financing. U.S. alliances with the
Philippines and Thailand were revitalised as both were designated ‘major
non-NATO ally’ status. In the Philippines, where the decision to terminate
the military bases agreement with the U.S. had been deeply regretted after
the flaring of tensions with China in 1995 over territorial disputes in the
South China Sea, American combat forces were deployed to support
Filipino troops in fighting against Abu Sayyaf insurgents in Mindanao, and
a Joint Defense Agreement now gives the U.S. a long-term advisory role in
the modernisation of the Philippines Armed Forces. After the 2002 terrorist
bombing in Bali established Southeast Asia as the ‘second front’ in the
GWOT, Indonesia assumed new importance as the largest Muslim nation in
the region, and Washington restored in 2005 military-to-military relations,
which had been suspended since 1991 (Foot 2004). In the same year,
Washington signed with Singapore a new Strategic Framework Agreement,
which expanded bilateral cooperation in counter-terrorism, counter-
proliferation of weapons of mass destruction, joint military exercises and
training, policy dialogues and defense technology. The security agreements
with Singapore and the Philippines especially have outlasted the peak of the
GWOT, providing the bases for basing littoral combat ships and increased
equipment transfer respectively under the Obama administration’s military
refocus on Asia from 2011.
Southeast Asian strategic policy toward the U.S. may be summed up as
the facilitation of continued U.S. military dominance in the Asia-Pacific. In
this regard, the ‘balance of power’ rhetoric is misleading, because
Southeast Asian security policies seek to sustain U.S. preponderance, not to
facilitate an even distribution of power in the region.
These two goals of Southeast Asian great power strategies have had
significant impact upon both the regional ‘architecture’ and on the regional
social structure. During the transition to a post-Cold War world order, the
Southeast Asian states also helped to establish an extensive definition of the
Asia-Pacific region, by reinforcing the immutable U.S. role in East Asia,
and by attaching South Asia (via India and Pakistan) to this framework and
by recognising Russia’s membership. The importance of such inclusiveness
to the regional architecture was twofold: first, it helped to legitimise the
security interests and role of each of these great powers in East Asia; and
second, it also institutionalised the small states’ and middle powers’ claims
to legitimate voice and political relevance in the management of regional
security affairs. That ASEAN went on to develop further its bilateral
‘ASEAN+’ dialogues with each great power, and then to create additional
ASEAN-centred regional institutions –ASEAN+3,4 East Asia Summit5 and
ASEAN Defense Ministers Meeting Plus6 – testifies to what Eaton and
Stubbs (2006) called its ‘competence power’, its ability cohesively and
normatively to shape and frame regional perceptions and approaches to
security cooperation in ways beneficial to itself. This is manifested in the
logistics, functions and norms of the resulting institutions, which meet in
Southeast Asia in conjunction with ASEAN’s own summit, have their
agendas set by the ASEAN Chair, and – in the case of the EAS – have their
criteria of membership determined by accession to TAC, formal recognition
as an ASEAN ‘dialogue partner’, and unanimous acceptance by ASEAN.
This driver’s seat grants ASEAN structural power because these large
regional institutions are difficult to ‘re-programme’: subsequent regionalist
developments must adapt to, or be grafted onto, these ASEAN-led
institutions already entrenched at the heart of the strategic architecture
(Emmerson 2010).
But this regional architecture contains some more complex social
elements. Southeast Asian policies to support U.S. preponderance carry a
more pervasive goal than simply countervailing growing Chinese power,
since Southeast Asian states are trying to integrate China into the regional
order at the same time as they are trying to ensure that this order remains
U.S.-led. At critical junctures, other key East Asian states, particularly
Japan but also South Korea, have consistently opted to support the
continuation of the preponderant U.S. military presence. China has
criticised and tried to resist U.S. strategic relationships in the region,
including U.S. military ties with Southeast Asia, but has not yet directly
opposed or tried to supplant U.S. leadership (Goh 2013). This suggests that
the evolving East Asian social structure is moving toward a multi-layered
hierarchical order topped by the U.S. as global superpower but with China
as the leading regional great power and other regional powers falling in
ranks below them (Goh 2008; Clark 2011, chapter 9). In other words, many
regional states – including Southeast Asian states – go beyond the demands
of diversifying dependencies in supporting U.S. preponderance or even
hegemony.7
In general, many East Asian states support or tolerate U.S. hegemony
because of their belief that the distribution of benefits, while not ideal, is
preferable in this pluralist order than in any other alternatives they can
devise. They might construct secondary safety nets – enmeshing China in
the hopes of socialising it, financial regionalism, cultivating gradual moral
reconciliation – but in the meantime, the strategic oxygen for such
endeavours is perceived to flow from the hard deterrence and guarantorship
that the U.S. alone can provide. U.S. power does not have to be tamed in
the region so much as harnessed and channelled into binding security
commitments. This sits in contrast to East Asian approaches to China,
which concentrate on constraining and diluting it, and socialising it into a
becoming different type of power.

Limitations
These complex Southeast Asian strategies towards great powers are
innovative in defying the neat boundaries of mainstream International
Relations theories. However, they may not be innovative enough because
they pay insufficient attention to two vital and related issues that flow from
these strategies: the great power balance, and the great power bargain.
Having facilitated U.S. resurgence and preponderance in the region in spite
of the end of the Cold War and the distraction of counter-terrorism and wars
in the Middle East, ASEAN states are now faced with some awkward
questions about the balance of power – or more accurately, the deliberate
imbalance of power, between the U.S. and other regional great powers. On
the one hand, Southeast Asian strategists may have focused on constraining
rising China at the expense of the equally difficult task of how to ensure
that the U.S. tempers its preponderance with restraint and legitimacy. In
particular, Southeast Asian states need to consider now how to persuade
China to accept unequal power – and more importantly, differential (read:
less) authority – vis-à-vis the U.S.
The other aspect of great power balance is the stuff of classic geopolitics:
how should the changes in the U.S.–Japan–China strategic triangle be
managed? In material, operational and legal terms, the American resurgence
in East Asia has been crucially underpinned by updating and re-invigorating
the U.S. alliance with Japan. However, Japan’s increased military
capabilities and strategic role within the alliance since the mid-1990s has
undermined China’s assurance that the alliance keeps Japan in check, thus
intensifying the trilateral security dilemma (see Goh 2011a). Southeast
Asian states have very limited ability directly to transform the nature of this
vital triangular relationship; what is required is a new set of strategic
bargains that these great powers have to strike among themselves.
The optimistic view is that ASEAN has created overlapping institutions,
which help to mute the security dilemma by offering great powers multiple
opportunities to cooperate with different groups of states without generating
zero-sum games (Cha 2011). But the more profound task of creating
regional order requires great power relations to be regulated in terms of
institutionalised mutual understandings about constraints, rules of conduct
and conflict management. The urgent need for these ‘rules of the road’ has
been repeatedly highlighted by various events in 2013: the flaring up of
China and Japan’s conflicting claims to the Senkaku/Diaoyu islands,
China’s controversial declaration of an air defence identification zone over
the East China Sea and new fishing regulations in the South China Sea, and
the near-collision of the USS Cowpens with a vessel accompanying the
Chinese aircraft carrier Liaoning in the South China Sea.
And yet, the Southeast Asian claim to mediating great power peace rests
on not taking sides and in facilitating dialogue. In spite of constructivist
arguments that this would in time shift state interests and create mutual
identification, the ASEAN-centred channels do not yet appear to have
helped substantively in negotiating mutual constraints and a modus vivendi
among the great powers. First, the ASEAN style of multilateral
institutionalism brought the U.S., China and other major powers to the table
because the informal, consensual and non-binding norms entailed have been
relatively non-demanding, low cost and low stakes. Second, ASEAN has
provided the great powers with a minimalist normative position from which
to resist the more difficult processes of negotiating key strategic norms.
Notably, the ‘ASEAN way’ has institutionalised the means by which China
can block the development of other norms that would entail more sustained
restraint, transparency and scrutiny. China has also exploited ASEAN’s
conflict avoidance norm to resist addressing the South China Sea dispute
within these multilateral institutions. ASEAN’s style generated the non-
binding 2002 Declaration of Conduct, which was loose enough to allow
China to continue to pursue bilateral actions such as the controversial joint
exploration agreement with the Philippines in 2004, and to oppose over the
next decade ASEAN’s attempts to negotiate multilaterally on the Code of
Conduct. Third,
ASEAN’s model of ‘comfortable’ regionalism allows the great powers to
treat regional institutions as instruments of so-called ‘soft’ balancing, more
than as sites for institutionalising regional ‘rules of the game’ that would
contribute to a sustainable modus vivendi among the great powers. For
instance, the Abe Shinzo government assiduously courted ASEAN support
for Japanese opposition to China’s maritime assertiveness in 2013, and
again took the opportunity to increase the political momentum for the EAS
as opposed to ASEAN+3. Such institutional malaise is related to ASEAN’s
imperative of maintaining its ‘relevance’ in the rapidly changing Asia-
Pacific strategic landscape. The fear of being sidelined in regional affairs on
the basis of capacity suggests that ASEAN states would logically prefer the
perpetuation of some distance among the great powers, to the extent that
they would find it difficult to conduct independent dialogue or create a
concert, to the exclusion of smaller states and entities (Goh 2011b).

Southeast Asian responses to the U.S. ‘pivot’: implications for

U.S.–China relations
These limitations can be observed clearly in Southeast Asian responses to
the Obama administration’s ‘return’, ‘pivot’ or ‘rebalance’ towards Asia in
the last two to three years, and the impacts of these reactions on their
strategies to manage China’s rise. As Secretary of State Hilary Clinton
explained in her policy summary in November 2011, this pivot entails
Washington striving ‘to innovate, to compete, and to lead in new ways’ in
the region.
This re-assertion of U.S. strategic interest has coincided with growing
regional concerns about China’s apparent assertiveness in its territorial
disputes in the East and South China Seas; and Southeast Asian states
especially have reacted by trying to continue their policies of harnessing
U.S. power to contain China while managing differences in the exact
balance within national strategies to hedge between China and the U.S. Yet,
it would seem that Southeast Asia is now reacting within the wrong
strategic framework. The crucial difference between now and the immediate
post-Cold War period is that there are fewer doubts about U.S. commitment
to Asia given Washington’s intense concerns about the China threat. Thus,
there is now less need to ‘harness’ U.S. power than to persuade China to
live with U.S. leadership and to help facilitate a great power bargain, not
just a balance.

Diplomatic
While the military element has received the most attention, the U.S. re-
focus on Asia has its roots in 2009 and began diplomatically in 2010.
Chinese actions were crucial in re-activating American worries about the
China threat: Congressional, military and public concerns about Chinese
maritime assertiveness intensified in the U.S. after the 2009 Impeccable
incident, China’s reluctance to condemn North Korea after the sinking of
the Cheonan in March 2010, and Chinese officials’ references to the South
China Sea (SCS) a ‘core national interest’ during the same period. Longer-
term U.S. worries about China’s growing military power and corresponding
demands for spheres of influence were also fuelled by the discovery of a
new Chinese underground nuclear submarine base on Hainan Island that
can be used as a staging post for pursuing its maritime claims in the SCS
(Valencia 2009). As a result, one of the opening moves of the
Obama/Clinton pivot was finally signing up to ASEAN’s Treaty of Amity
and Cooperation in 2010, facilitating U.S. membership of the EAS.
 While this might have been an ideal opportunity to begin the work of
facilitating constructive Sino-American strategic dialogue and cooperation
within ASEAN-led regional institutions, the U.S. diplomatic pivot was
immediately harnessed by some Southeast Asian states worried about
China’s assertiveness in the SCS to put pressure on China. At the same ARF
meeting at which the U.S. acceded to TAC, Clinton (2010) made the first
extensive articulation of U.S. policy on the SCS since 1995, asserting U.S.
‘national interest in the freedom of navigation, open access to Asia’s
maritime commons, and respect for international law’ in the SCS, and
offered to mediate in the dispute. This goaded the Chinese Foreign Minister
into warning ASEAN that ‘China is a big country and other countries are
small countries, and that is just a fact’.8 Since then, President Obama,
Secretary of Defence Robert Gates and the State Department have all put
forward principles for managing the disputes and protecting U.S. interests
in the SCS.

Military
The varying Southeast Asian responses to these SCS elements of the U.S.
pivot amply illustrate the continuing challenges posed by intra-mural
disagreements in constraining ASEAN’s ability to mediate between the
great powers. Southeast Asian inclinations about just how and how much to
lean toward the U.S. and China respectively continue to be scattered across
the spectrum of hedging positions, and China’s more assertive stance in its
maritime claims plus the Obama administration’s ‘pivot’ to Asia have added
pressure on these fault lines. For instance, when regional concerns peaked
after the Sino-Japanese standoff in September–October 2010 when Japan
detained a Chinese trawler near the Senkaku islands, Singapore Prime
Minister Lee Hsien Loong publicly hailed the role of the U.S. as regional
security guarantor and manager. He emphasised the need for Washington to
maintain an active presence in Asia to show that it was ‘here to stay’, since
‘America plays a role in Asia that China cannot replace’, including
‘maintaining peace in the region’.9
This U.S. role as regional security guarantor stems critically from its
superior coercive authority in providing credible extended deterrence,
highlighted in the military element of the Obama administration’s pivot
towards the end of 2011. Militarily, this translated into a plan for
modernising basing arrangements, strengthening and connecting its security
partnerships, and enhancing its military presence across the Asia-Pacific
(U.S. Department of Defense 2012). As part of the redistribution of U.S.
forces after the drawdown from Afghanistan and Iraq, and occurring at a
time of fiscal austerity, this ‘rebalancing’ arguably held more symbolic than
operational significance. The rebalance will involve a modest projected
increase in U.S. Asia-Pacific military deployment, from 50 to 60 per cent of
its total air and naval forces. But some new arrangements, while modest,
targeted the SCS: the rotational deployment of 2,500 U.S. Marines in
northern Australia within projecting distance of the SCS, and four new U.S.
Navy littoral combat ships – vessels developed for rapid reaction in coastal
waters – in Singapore.10 The SCS focus was reinforced when Clinton
affirmed the U.S.–Philippines alliance from the deck of a U.S. warship in
Manila Bay and referred to the seas around Scarborough Shoal as the ‘West
Philippine Sea’.11 The nuclear attack submarine USS Carolina spent a week
in Subic Bay during the Sino–Filipino standoff over Scarborough Shoal.
Making hay in the ‘pivot’ sun, the Benigno Aquino government requested
advanced aircraft and other equipment assistance from its ally.12 In July
2012, the two sides agreed that American troops and aircraft would re-use
facilities at the former U.S. bases in Subic and Clark Field.13 U.S.–Vietnam
military interactions have also increased since 2010, when the two countries
conducted their first bilateral defence dialogue and joint military exercise.14
There have been some significant differences in the degree to which
ASEAN states are willing to support this U.S. military reassertion at the
expense of China. American diplomatic pressure in 2010 had helped to push
China towards agreeing the guidelines to implement the DoC with ASEAN
in 2011, but the military elements of the subsequent U.S. ‘pivot’ engendered
more resistance from Beijing. Indeed, Washington’s SCS focus appeared in
2012 to intensify the security dilemma by both emboldening the Philippines
and antagonising China into adopting stronger stances on their territorial
dispute. This in turn reignited ASEAN’s strategic ambivalence and disarray.
The Indonesian Foreign Minister cautioned that new U.S. basing
arrangements in Australia might provoke a ‘vicious cycle of tensions and
mistrust’, while his Singaporean counterpart warned against a zero-sum,
anti-China attitude in a region that is ‘big enough to accommodate a rising
China and a reinvigorated U.S.’.15 Even as Manila hailed U.S. alliance
support and stepped up antagonistic rhetoric against China, Cambodia as
Chair refused to put pressure on China regarding its conduct in July 2012,
thus jeopardising ASEAN’s diplomatic convention and reputation. With its
more viable independent military means and chequered history of conflict
with China, Vietnam even more amply demonstrates this strategic caution.
In 2010, even while it sought U.S. authority to pressure China over the SCS
disputes, Hanoi maintained close strategic ties and even deference to
Beijing. The Vietnamese Deputy Defence Minister assured China that
Vietnam would not form an alliance with another country, allow foreign
bases in its territory, or develop relations with another country targeted at a
third party. The two sides also held five confidential meetings to discuss
principles for settling maritime disputes, and inaugurated a bilateral
Strategic Defence and Security Dialogue (Li 2012; Thayer 2011).
However, these divisions within ASEAN regarding the military
dimension of the U.S. rebalance are in turn affected by their threat
perceptions of China. Should Beijing continue the trend of apparent
increased assertiveness in the South China Sea conflicts, for instance, its
behaviour would draw greater wariness even from those Southeast Asian
states that are unwilling to antagonise China or that have no direct claims
on the issue. For example, Hanoi was characteristically cautious in its initial
response when the Hainan provincial authorities enlarged the scope of
fishing laws over other countries’ activities in the South China Sea at the
end of 2013, but was moved to demand publicly that China abolish this
‘erroneous’ as well as ‘illegal and invalid’ regulation after bilateral high-
level meetings seemingly yielded unsatisfactory explanations from Chinese
officials (Thayer 2014). How the more moderate ASEAN states on this
issue – for instance Indonesia, Malaysia, Thailand and Singapore – will
respond when the Philippines brings this latest Chinese action to ASEAN
remains to be seen. If Chinese actions engender a more defensive collective
response from ASEAN, the general danger is that the Southeast Asian states
will again resort to ‘borrowing’ U.S. power to counter-balance China. This
would strengthen the trend towards U.S.–China mutual military
containment, rather than the negotiation of rules of conduct that would
regulate great power conduct in the region. In other words, the security
dilemma will be further intensified.
Economic
By the end of its first term, the Obama administration turned its attention to
broadening the Asian pivot by employing the full range of its power assets,
particularly in pressing its considerable economic interests in the form of
pushing for a ‘21st century trade pact’ in the Trans-Pacific Partnership
(TPP) agreement. The TPP is a set of negotiations growing out of an initial
2006 agreement between APEC members Chile, New Zealand, Brunei and
Singapore. Subsequently, Australia, Peru, Vietnam, the U.S., Malaysia,
Mexico and Canada have signed onto the negotiations begun in early 2010.
If these 11 states succeed in the negotiations, the TPP will create a free trade
area of 658 million people and almost US$21 trillion in economic activity.
Should South Korea and Japan join the negotiations – as they have
indicated that they may in 2013–4 – the free market territory will boast a
combined GDP of US$26 trillion and account for 30 per cent of world
exports. The TPP is portrayed as a more comprehensive and serious free
trade agreement than many existing Asian ones, but its ambitious agenda
makes it unlikely that negotiators will manage to meet the October 2013
deadline. Apart from the strong resistance of protectionist lobbies in various
sectors within national economies, the TPP’s negotiating agenda is U.S.-
dominated, and the current prospects are that membership will be
particularly difficult for large developing countries such as Indonesia and
China (see, for example, Lim et al. 2012).
Once again, the Southeast Asian response mirrors the opportunism as
well as limitations of the economic elements of great power management
thus far. ASEAN states are, on the one hand, split about their strategic
preferences, while on the other hand, chiefly engaged in politicising and
seeking to advance political agendas using these economic channels. At the
November 2012 East Asia Summit, ASEAN+6 leaders announced that they
would begin negotiations in 2013 for a Regional Comprehensive Economic
Partnership (RCEP), aiming to conclude a new trade pact by 2015. RCEP is
widely seen as a response to TPP, mirroring the consistent pattern of
countering regionalist enterprises that include the U.S. and non-Asian states
by promoting exclusive regionalism that includes China at American
expense. There remain significant uncertainties and fuzziness about RCEP,
including an unclear timetable and agenda that would have to take into
account a very diverse membership, including transitional and less-
developed economies. It is also unclear whether RCEP would mainly act as
a means to stitch together the mass of already existing bilateral trade
agreements in and beyond the region, or whether it would provide a
template for a new multilateral agreement. In either case, the danger of
settling for a lowest-common denominator-type agreement is significant, as
with many ASEAN-led enterprises.
Moreover, it would seem that RCEP is the latest example of the
Southeast Asian tendency to generate economic regionalism from a basic
political ‘domino effect’ (Ravenhill 2010). The primacy of political rather
than economic considerations is evident not only in the timing of the
announcement so close to the multiple accessions to the TPP, but also in
response to the announcement in May 2012 that China, Japan and South
Korea would negotiate a trilateral free-trade agreement. Several Southeast
Asian states reportedly canvassed for RCEP in direct response to the
Northeast Asian FTA talks, for fear of being overshadowed and sidelined by
the latter due to the combined economic weight of the three Northeast Asian
economies. Moreover, the RCEP initiative will also serve to divert attention
away from the intra-mural problems within ASEAN in negotiating the
economic liberalisation necessary to achieving the ASEAN Economic
Community vision by 2015. In any case, the TPP versus RCEP line-up is
likely to exacerbate intra-ASEAN differences, with Singapore, Malaysia
and Vietnam possibly focusing on promoting the TPP as members, while
the rest of ASEAN try to develop RCEP as the centrepiece of economic
integration in the region.

Conclusion
There is a danger that Southeast Asian post-Cold War strategies to manage
China’s rise and great power politics more generally have reached a plateau
and are beginning to incur growing marginal costs and dangers. Continued
strategic divisions among themselves and the focus on maintaining
ASEAN’s relevance have come at the price of sacrificing the goal of
facilitating the vital great power bargain that must underpin regional order.
Overall, Southeast Asian states do not yet explicitly recognise that their
encouragement of U.S. resurgence requires more complex management
than what they have achieved so far. In effect, Southeast Asian states have
helped to create a distinctive new regional social structure – one dominated
by the U.S. but trying to accommodate China. But they have facilitated the
development of a hierarchical order without being able to manage
adequately the consequences. Recent responses to the U.S. pivot illustrate
this problem.

Notes
1 That is, socialisation is the aim and end-point, with engagement as the starting process (see
Johnston and Ross 1999).
2 See Hughes (2009) for a good discussion of Japanese attempts to contain Chinese power using
regional institutions, and Goh (2007/8) on the accompanying Southeast Asian discourse on
developing a regional balance of influence, rather than power.
3 Every Southeast Asian state – with the exception of Myanmar, Laos and Cambodia – has
established military-to-military relations of some description with the U.S. today.
4 Created in 1997, the most established East Asian economic cooperation institution, which has
spawned a number of free trade agreements and, more significantly, regional financial
cooperation mechanisms such as the Chiang Mai Initiative regional currency swap facilities.
5 An annual meeting of the ASEAN+3 plus India, Australia and New Zealand begun in 2005, and
expanded to include the U.S. and Russia in 2011, which also addresses political and security
issues but in smaller groupings than the ARF.
6 The ADMM was inaugurated in 2006 and expanded in 2010 to include all EAS members
(ADMM+). From 2011 the ADMM+8 included the U.S. and Russia.
7 On the question of why, see Hamilton-Hart (2012) for a convincing argument that U.S. support
has well-served the interests of ruling regimes especially of the ‘old ASEAN’ states, and that
epistemic communities defined by state-sanctioned historical narratives and group think within
the professional policy elites in these countries have subsequently helped to perpetuate the pro-
U.S. bias.
8 ‘Clinton wades into South China Sea territorial dispute’, Washington Post, 23 July 2010. On the
limitations to Southeast Asian willingness to push the U.S.–China divide too far though, see
‘ASEAN caught in a tight spot’, The Straits Times, 16 September 2010.
9 ‘U.S., ASEAN to push back against China’, Wall Street Journal, 22 September 2010.
10 ‘U.S. Marine base for Darwin’, Sydney Morning Herald, 11 November 2011; ‘Singapore agrees
to U.S. deployment of littoral combat ships’, Channel News Asia, 2 June 2012.
11 ‘Clinton reaffirms military ties with the Philippines’, New York Times, 16 November 2011.
12 ‘Obama, Aquino hail growing U.S.-Philippine alliance’, Washington Post, 9 June 2012; ‘U.S.
helps the Philippines improve its military capability’, Guardian, 6 August 2012.
13 ‘U.S. can use Clark, Subic bases’, Philippine Star, 6 June 2012.
14 ‘U.S. and Vietnam stage joint naval activities’, BBC News, 10 August 2010; ‘U.S., Vietnam
explore enhanced defense cooperation’, American Forces Press Service, 18 August 2010.
15 ‘China, Indonesia wary of U.S. troops in Darwin’, ABC News, 17 November 2011; ‘Singapore
warns U.S. against anti-China election rhetoric’, BBC News, 8 February 2012.

References
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Problem of Regional Order. London: Routledge.
Cha, Victor. 2011. ‘Complex Patchworks: US Alliances as Part of Asia’s Regional Architecture’. Asia
Policy 11: 27–50.
Ciorciari, John. 2010. The Limits of Alignment: Southeast Asia and the Great Powers since 1975.
Washington, D.C.: Georgetown University Press.
Clark, Ian. 2011. Hegemony in International Society. Oxford: Oxford University Press.
Clinton, Hillary Rodham. 2010. Remarks at press availability. Hanoi, Vietnam, 23 July. Available at
www.state.gov/secretary/rm/2010/07/145095.htm. Accessed 12 September 2012.
Clinton, Hillary Rodham. 2011. ‘America’s Pacific Century’. Foreign Policy 189: 56–63.
Eaton, Sarah and Richard Stubbs. 2006. ‘Is ASEAN Powerful? Neo-realist versus Constructivist
Approaches to Power in Southeast Asia’. Pacific Review 19(2): 135–155.
Emmerson, Donald. 2010. Asian Regionalism and U.S. Policy: The Case for Creative Adaptation.
RSIS Working Paper 193.
Foot, Rosemary. 1998. ‘China in the ASEAN Regional Forum: Organizational Processes and
Domestic Modes of Thought’. Asian Survey 38(5): 425–440.
Foot, Rosemary. 2004. Human Rights and Counter-terrorism. Adelphi Paper 363. London: IISS.
Goh, Chok Tong. 2001. ‘Keynote Address to the U.S.-ASEAN Business Council Annual Dinner,
Washington, D.C.’. Reprinted in The Straits Times, 15 June.
Goh, Evelyn. 2007. ‘Southeast Asian Perspectives on the China Challenge’. Journal of Strategic
Studies 30(4): 809–832.
Goh, Evelyn. 2007/8. ‘Great Powers and Hierarchical Order in Southeast Asia: Analysing Regional
Security Strategies’. International Security 32(3): 113–157.
Goh, Evelyn. 2008. ‘Hierarchy and the Role of the United States in the East Asian Security Order’.
International Relations of the Asia-Pacific 8(3): 353–377.
Goh, Evelyn. 2011a. ‘How Japan Matters in the Evolving East Asian Security Order’. International
Affairs 87(4): 887–902.
Goh, Evelyn. 2011b. ‘Institutions and the Great Power Bargain in East Asia: ASEAN’s Limited
“Brokerage” Role’. International Relations of the Asia-Pacific 11(3): 373–401.
Goh, Evelyn. 2013. The Struggle for Order: Hegemony, Resistance, and Transition in Post-Cold War
East Asia. Oxford: Oxford University Press.
Hamilton-Hart, N. 2009. ‘War and Other Insecurities in East Asia: What the Security Studies Field
Does and Does Not Tell Us’. The Pacific Review 22(1): 49–71.
Hamilton-Hart, N. 2012. Hard Interests, Soft Illusions: Southeast Asia and American Power. Ithaca:
Cornell University Press.
Hughes, Christopher W. 2009. ‘Japan’s Response to China’s Rise: Regional Engagement, Global
Containment, Dangers of Collision’. International Affairs 85(4): 837–856.
Johnston, Alastair Iain. 2003. ‘Socialization in International Institutions: The ASEAN Way and
International Relations Theory’. In International Relations Theory and the Asia-Pacific, edited by
G. John Ikenberry and Michael Mastaduno, 107–162. New York: Columbia University Press.
Johnston, Alastair Iain. 2008. Social States: China in International Institutions, 1980–2000,
Princeton, NJ: Princeton University Press.
Johnston, Alastair Iain and Robert S. Ross, eds. 1999. Engaging China: The Management of an
Emerging Power. London: Routledge.
Kang, David C. 2003. ‘Getting Asia Wrong: The Need for New Analytical Frameworks’.
International Security 27(4): 57–85.
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11 China–Central Asia
A new economic, security, and logistic
network
Alessandro Arduino

Introduction
Currently, Central Asia’s perceptions of China are spread over a wide
spectrum, ranging from enthusiastic adoption of the Chinese business
model1 to ill-conceived fears over China’s expansion. While Beijing has
chosen not to engage Russia on military sales—as Central Asian countries
still adopt Russian weapon systems and military doctrine—the
confrontation on the economic front has already begun. The growing
economic presence of Chinese state-owned enterprises (SOEs) in the region
would supersede Russia’s historic influence. Chinese state-owned banks
and enterprises, which are spearheading China’s direct investments, would
be followed by Chinese private small and medium-sized enterprises (SMEs)
and local traders based mainly in the neighboring Xinjiang province.
Deng Xiaoping’s tenet of “ 韬 光 养 晦 ”2 shapes the steady progress of
Chinese investments in the region, but the strategy needs an urgent
modernization to embrace the new role or model that China has to offer to
the five young republics. Beijing’s ambitions3 in Central Asia are emerging
inexorably from the “韬 光养晦” toward a “中国模”,4 albeit with clearer
guidelines.5 In military terms, the landlocked area of the Central Asian
republics better suits the existing People’s Liberation Army’s (PLA)
capabilities; in contrast, in the Asia-Pacific theatre, the PLA Navy still
needs more time to develop a fully operational naval battle group around
the newly inaugurated carrier, the Liaoning. Besides the increase in scope
and size of regional military-to-military (M2M) programs, the linchpin of
China security in the region could be found outside it, namely in Pakistan.
During the last five decades, China and Pakistan’s bilateral cooperation has
evolved from trade and economic cooperation to a security one. Economic
interests in South Asia have been supported by the Islamabad network in
the region, only recently has China increased the scope of data gathering
and diplomatic efforts. While Pakistan is a “friend of China”,6 the Central
Asian republics still balance their friendship between China and Russia to
avoid having to be beholden to either regional power.
Since the Central Asian states gained independence, their sociopolitical
relationship with China has evolved from basic diplomacy (1991–1997) to
broader patterns of economic exchange and trade (1997–2001) to an “all
directional cooperation through bilateral ties and within the framework of
the SCO.”7 Despite this trend, it seems clear that China is not ready to
expand political and economic relations with Central Asia as it did with
Africa over the last 25 years.8 Central Asia is struggling with a new
international geopolitical order that encompasses a complex web of energy,
security, and political relations, while addressing its own needs in the midst
of convoluted socioeconomic transitions. The global financial and
economic crisis that has erupted in FY 2007–2008 has led new actors and
perspectives to the scene; hence the geopolitical environment has increased
in complexity. The Central Asian republics are subject to several external
pressures, including the centripetal forces of global capitalism with the
“New Silk Road” development map suggested by the United States,9 the
centrifugal forces of Islamic traditions,10 and the push towards the Eurasian
zone emphasized by Russian President Vladimir Putin.11
After a few years, the initial common patterns of development branched
separately for each of the newborn nations. Despite sharing common
challenges such as national identity, economic growth, border disputes, and
internal stability, each state has produced distinct outcomes. Richer and
more stable regimes such as those in Kazakhstan and Uzbekistan took
advantage of the profusion of natural resources, while fragile economies
like Tajikistan and Kyrgyzstan struggle for internal cohesion. In each
country, the authoritarian role of the president12 has been reinforced by a
strong relationship between tribal bonds and government officials, while the
scope of the reforms has been linked to the alternate fortunes of locals’
economies. The absence of a strong voice and representation for civil
society is due to not only the regimes’ authoritarian grip but also the re-
traditionalization of the former relationships networks.13
Foreign direct investments (FDI) and transregional economic integration
are viable solutions to deal with the region’s present and future problems,
but they could be enacted only when internal economic development is
accompanied by structural reforms designed to prevent a probable “Dutch
disease” for countries like Turkmenistan, which rely exclusively on natural
gas exports. Following the recent leadership transition, China must still
address several socioeconomic challenges within its own borders in order to
sustain the planned GDP growth rates of between 7 and 8 percent. Mistakes
in Central Asia’s overseas investments could stir up economic and social
instability at home, given that some 500 million rural Chinese are still
excluded from the economic growth and quality-of-life improvements
enjoyed by the minority. The success of Chinese policies in the area begins
with an economic dimension that is followed strictly by a security one, and
not vice-versa. The Chinese “socialist market economy” model could foster
a sustainable and peaceful development in the region, provided that China
advocates an inclusive growth policy. Chinese failure in local economic
development could spark social unrest that could escalate into international
confrontation. At the same time, the narrative of the Chinese FDI
investment pattern cannot be considered as a single and homogeneous unit
but as a multifaceted amalgam of interests led by state corporate actors. The
SOEs’ insatiable demand for natural resources coupled with easy access to
credit might influence the Foreign Affairs and Defense Ministry regional
policies to promote their own agenda.14
While China and Russia play a prominent role in the region, Turkey,15
India, and Iran are increasing their interests, because of historical, cultural,
and linguistic ties and also because of immediate concern over the power
vacuum created by the ISAF withdrawal from Afghanistan in 2014. The
current US and European economic and security outlook remains mainly
focused on the Northern Distribution Network (NDN), Caspian energy
resources, and drug smuggling issues. The US anti-terrorist agenda still
occupies primacy in Washington’s interaction with the region. The
announced closure of the Manas16 air base in Kyrgyzstan that ignited the
search for a new strategic center can help Washington maintain a security
foothold in the region. Although Russia has a greater vision of its own role
within the Eurasian context, Moscow presently lacks the means to support
that vision. Russia is mistakenly perceived as a fading power in Central
Asia. It is still an influential actor: Moscow’s soft power is still persuasive
through the broad diffusion of Russian language and culture, and its hard
power is showcased through military strength. But this is something that
Beijing is unwilling to contend for now. While Russia lacks sufficient
financial strength to support President Putin’s “Eurasia vision,”17 it is trying
to cope with China’s growing economic influence. For instance, the recent
Commonwealth of Independent States (CIS) customs union, which includes
Belarus and Kazakhstan, has erected a strong barrier to prevent cheap goods
produced in China from saturating the area.
This chapter aims to analyze how China’s growing economic, political,
and military power will affect the perceptions and reactions from the
Central Asian countries and how China will manage to satisfy its voracious
appetite for energy and commodities without compromising its diplomatic
relations with the fading Russia or dislodging the US anti-terrorist agenda
in the region.18 Future scenarios include China’s export of its “harmonious
society” or “Peaceful Rise” models, as well as its own brand of
authoritarian capitalism.19 Contrary to the EU, China evades accusations of
foreign authoritarian government and direct involvement in other countries
policy making; nevertheless, Beijing is preoccupied with the uncertainties
of power transfer and changes within Central Asia local governments.
Unpredictability and uncertainty are Beijing’s main concerns, not only in
the political sphere but also in the financial sphere, specifically risks
associated with long-term regional infrastructural investments. Current
Central Asian political transition has the potential to intensify political
disorder between regimes and oppositions, and foster radicalization of
religious groups.20 While China continues to adopt the policy of “non-
interference in internal affairs,”21 an internal crisis in any of these republics
could presumably lead Beijing to stretch its promise of “respect for
independence and sovereignty, while promoting regional stability.”22
China’s military power in the Central Asia
Each Central Asian country23 has its own peculiar perceptions of China’s
military and economic assertiveness in the region.24 Given the prominence
of the economic impact of Chinese power, it is pertinent to outline how
each country is trying to attract Chinese investments without having to
sever its links with Russia and become solely dependent on Beijing. While
countries with abundant natural resources (such as Turkmenistan,
Kazakhstan, and Uzbekistan) have more scope for negotiation on the terms
of China’s FDI, Tajikistan and Kyrgyzstan have much less
maneuverability.25 At the same time, allowing more Chinese political
influence is a gambit that the Central Asian republics play when Russia’s
political and military embrace gets too tight.
While China and Russia do not share similar goals in regional economic
development, they find a common path in military cooperation that resists
the “three evils” of extremism, separatism, and terrorism.26 China is
primarily concerned about how Central Asia’s socio-political instability is
going to affect its western borders.27 Beijing faces the threat of internal
fragility of Kyrgyzstan and Tajikistan regimes and the unpredictability
linked with the succession of aging founding leaders in Uzbekistan and
Kazakhstan.28 The ripple effects from a crisis could have devastating effects
on Chinese FDI profitability and even fuel Islamic movements for
independence in the Xinjiang Uyghur Autonomous Region. Considering the
risks posed by the outbreak of riots in the autonomous province, like the
recent carnage in Kashgar,29 Beijing is prepared to include Central Asian
dynamics as pieces of a larger geopolitical puzzle. Failing states around the
western borders are going to foment internal political and ethnic instability
posed by the East Turkestan Islamic Movement (ETIM) and other similar
groups30 in favor of Uyghur autonomy in Xinjiang.31 The memory of the
June 2011 ethnic cleaning in Osh, Kyrgyzstan’s second-largest city, is still
vivid in China. The ethnic purge enacted by Kyrgyz majority against the
local Uzbeks minority triggered fears that Kyrgyzstan could be heading
towards a civil war. The outcomes included a stream of refugees intruding
into China and the SCO’s display of its ineffective crisis response
mechanism. Perhaps the ISAF withdrawal from Afghanistan in 2014 is
going to exasperate the situation.32
In order to balance Russian aging but still effective military power with
the growing Chinese prowess, the five Central Asian republics adopted a
multi-vector policy of simultaneously joining two different “Security
Clubs” encompassing border defense and counterterrorism. Both China and
Russia have been advocating the proliferation of multilateral organizations
in the region, resulting in the Collective Security Treaty Organization
(CSTO) and the Shanghai Cooperation Organization (SCO).33 Several of
the Central Asian republics belong to these organizations; for instance,
Kazakhstan recently has chaired the SCO and also held the presidency of
the Organization for Security and Co-operation in Europe (OSCE), while
simultaneously presiding over the Seventh World Islamic Economic Forum.
While Russia is perceived as a declining power and China a rising one,
the strategic partnership between the two countries has not yet reached the
friction point. However, long-term regional cooperation is still more a
concept than a fact. Nevertheless, China and Russia share common interests
in maintaining stability and status quo. The SCO, with the benefit of
Chinese economic support, is a prominent organization in the area,
encompassing China, Russia, Kazakhstan, Uzbekistan, Kyrgyzstan, and
Tajikistan, whereas the CSTO comprises all the SCO countries (with the
exception of China and a brief latency of Uzbekistan, which recently re-
joined the organization) as well as Armenia and Belarus. The SCO observer
nations include India, Iran, Pakistan, Mongolia, and Afghanistan; Belarus,
Sri Lanka, and Turkey are considered dialogue partners.
In 2014, the worst-case scenario in Afghanistan was civil war with
devastating ripple effects across Central Asia. This potential dangerous
scenario has recently brought Uzbekistan and Kazakhstan into a
constructive dialogue over growing Chinese economic power, even though
the latter would not lead to a concomitant increase in security
responsibilities, at least not in the short-term. Currently, Central Asian
states, relatively less concerned about China’s growing military power,
perceive Beijing’s growing economic leverage as a tool that may be used to
influence local political outcomes.
 The last five years have witnessed a growing engagement of PLA and
People’s Armed Police (PAP) in joint bilateral and multilateral military
exercises. The status of military cooperation between Central Asia and
China is linked with the SCO framework of multilateral cooperation. This
has led to an important engagement of the PLA in joint military training
exercises with Russian and Central Asian armed forces. In their fight
against the region’s transnational criminal organizations (with links to drug
trafficking and Islamic terrorist cells), the bilateral exercises and
information sharing between China and individual countries have been
more effective than the multilateral Regional Anti-terrorist Structure
(RATS) based in Tashkent.34
The 2007 SCO joint-military exercise counterbalanced NATO’s influence
in the region, showcasing the participation of almost 7,000 PLA soldiers.
Besides the fact that the SCO manages a broader range of issues from
economics to logistics, Russia’s main concerns inside the SCO are related
to “hard” security.35 China’s growing influence in the organization has
shown signs of preeminence during the Abkhazia and South Ossetia
conflicts in Georgia. At that time, the SCO refused to recognize the
breakaway provinces supported by Moscow. While the CSTO is still an
important part of Vladimir Putin’s effort to counterbalance the expansion of
NATO in the Caucasus and in Central Asia, the CIS customs union
displayed a similar Russian effort to contain the Chinese economic
offensive. Under Yeltsin, Russian foreign policy started a gradual
detachment from the regional geopolitical game. Putin’s seeks to reverse the
trend.
China’s increasing military spending is partly propelled by Beijing’s
intention to protect overseas investments.36 The SCO joint military training
program provides an important testing ground for PLA’s limited
international operational experience. Thus PLA’s strategic and tactical
guidelines are targeted at the modernization of a force to achieve
dominance in local wars under conditions of information;37 the landlocked
geography of Central Asia is well suited to the task. Considering that PLA
active participation was last seen in 1979, this interforce cooperation allows
the PLA to test both doctrinal changes and force modernization put in place
since 1999. PLA participation in the SCO multilateral exercise also marks a
milestone in Chinese military diplomacy. PLA involvement in M2M
activities has been boosted since late 200238 and the SCO multilateral
exercises have been the largest in terms of force deployment. Between 2002
and 2011, PLA and PAP participated in 48 bilateral and multilateral
exercises39 and the year 2009 marks the beginning of a proactive M2M
strategy.40 In spite of the growing M2M relations, contrary to popular
expectations, Chinese growing economic power is not accompanied by the
same assertiveness to assume responsibility of the key regional security
issues.
The 2010 Peace Mission witnessed the participation of 8,000 Chinese
troops, including mechanized infantry and air assets;41 the symbolic role of
the exercise has far surpassed the strategic one. Despite lacking both
command integration and complex operational framework, the SCO
exercises provided a suitable environment to test new concepts and systems
in PLA including the Military Operations Other Than War (MOOTW).
MOOTW encompasses Beijing’s reaction to the “three evils”42 and its
willingness to quell not only Xinjiang autonomous impetuses but also
illegal transborder activities, mainly drug trafficking. In this respect, PAP
border defense units have been actively involved in a bilateral exercise with
Central Asian States fostering cooperation to counter common threats.43
Following the Marxist interpretation of von Clausewitz,44 China’s active
involvement in multilateral military exercises has to be read, first through
political lenses45 and not exclusively through operational dynamics. In this
respect, PLA participation in M2M activities is posed to reduce Central
Asian fears and anxieties over an “unknown army” modernizing at a rapid
pace. In terms of military assistance, Beijing’s role appears to be limited:
equipment transfers to Kazakhstan, and vehicles and communication
equipment transfers to the border units.46 Russia still provides the bulk of
hardware to Central Asia. Russian weapon sales to Central Asia are at
preferential prices given the CIS internal market framework and bilateral
exchanges;47 moreover, China is also dependent on Moscow for advanced
military technology.48
With the 2014 withdrawal of ISAF from Afghanistan, the neighboring
states will have to formulate new policies for regional stability. In
geopolitical terms, Afghanistan is the linchpin between Central Asia and
South Asia. Therefore, the Afghan issue not only involves Central Asia but
also the core interests of several regional powers including India, Pakistan,
Iran, and Turkey. The SCO-or CSTO-led stabilization force would not be
able to immediately fill the strategic vacuum created by the withdrawal of
US and allied troops. While Russia seems more focused on a “hard”
peacekeeping model, China can play a mediating role in supporting local
economic development. China’s economic diplomacy, more than the active
involvement of the PLA, could be the nexus between Afghanistan
stabilization and regional economic integration with Central Asia. In spite
of condemning all forms of terrorism in the aftermath of September 11,
China did not allow any transit rights to ISAF. The 100-kilometre border
zone between China and Afghanistan, given its high altitude and lack of
viable infrastructure, poses neither an immediate security concern nor an
economic opportunity.
While China seems reluctant to shoulder the same financial burdens
assumed by US operations in Afghanistan, Beijing now has 2014 as a clear
deadline for making the required political, economic, and security
commitments to sustain peace and development. The increase in
transnational crimes, including drug trafficking, could provide funds and
weapons to the Islamic extremists’ network. Currently the American
commitment to Afghanistan is progressively fading. It has not succeeded in
obtaining the planned pacification and eradication of terrorist sanctuaries.
While the Afghan engagement contributed to the deterioration of the
American primacy on the Grand Chessboard,49 China is conscious of the
perilous implications of a deeper involvement in Kabul’s affairs. At the
same time, China’s US$3 billion investments in the Mes Aynak copper mine
might promote job creation, upgrade local human resources, and logistic
integration. Starting with the promised rail hub, China could foster a
sustainable economic, legal, and social development; but at the moment, the
total amount to be devoted to the investment is more on paper than in
realized projects. Beijing is well aware of the fact that investments must be
protected, and after 2014, there will be the need to provide security to its
own personnel and infrastructures; in this regard, the growth of private
security agencies in China is a pertinent development.50
The Chinese economic footprint increase in Central Asia and the
symmetrical growth of cross-border activities by various terrorist,
extremist, and criminal organizations are going to amplify the risks on
Chinese workers’ safety. Beijing will have to address these threats at three
different levels. The first level encompasses kidnapping and extortion by
non-political actors that perceive Chinese businessmen or SOEs top
management as an easy source of profit. The second level is associated with
the same threats but the actors involved are political and/or religiously
motivated, and ransom may not be the sole driver. The third level is related
to the escalation of undifferentiated violence against Chinese migrant
workers, with the implicit agreement of the local regime, and it could be
sparked by a negative spillover of the Chinese FDI or by the use of the
“Chinese fear”51 as a scapegoat to avoid internal demonstrations.
The current rise in China’s military power would not pose an immediate
and direct challenge to Russia. The strengthening of the SCO military
cooperation is still limited both in structural and operational terms, and the
main defining ethos of SCO multilateral security component will always be
the “principle of non-interference”.52 Similarly, the differences in language,
doctrine, and operational concepts as well as equipment between China and
the former soviet Central Asian armies which are dominated by Soviet-era
doctrines and systems, would limit any serious reform and cooperation.
Although China also relies heavily on Russian technology, its defense
industry has not only successfully reverse engineered some of these systems
and started local production but in many cases advanced to the next
generation of Russian systems.
Moscow might be willing to oversee the military operations in Central
Asia under the aegis of the CSTO; however, it is doubtful if after 2014, the
Armed Forces of the Russian Federation are going to re-enter Afghanistan.
In this regard, the growing Chinese economic predominance in Central Asia
and the incoming power vacuum might force China to become an
“unwilling” security provider in the regional security arena.

China’s growing economic power in Central Asia: role of

energy and logistics
China’s penetration of the Central Asian markets—with key infrastructural
projects followed by cheap goods and an increasing number of migrant
workers—has created widespread concerns. Additionally, even the lines of
credit offered by policy banks, such as the China Development Bank, were
at times suspected to be a possible conduit for a Chinese hidden political
agenda in the region.
An emblematic photo of former Chinese president Hu Jintao, Turkmen
President Gurbanguly Berdimuhamedow, Uzbek President Islam Karimov,
and Kazakh president Nursultan Nazarbayev taken in December 2009 at the
inauguration of the Turkmenistan–China natural gas pipeline epitomizes the
prominent role of energy and security issues that link the four countries.
The 1833-kilometre pipeline not only ensures a steady flow of natural gas
to Xinjiang but also underlines the Chinese SOEs’ pragmatic approach of
using European and Russian technologies and expertise. While the Chinese
project has been implemented in record time, the Western proposals ranging
from the Nabucco project to the TAPI are still in their infancy. In the
meantime, the Turkmen government has drastically reduced the terms of
their former monopolistic agreement with the Russian Gazprom in favor of
a better deal with China Petrochemical Corporation (Sinopec). China’s
success in Turkmenistan is rooted elsewhere, namely, in Beijing’s activities
in Kazakhstan, through the cooperation between KazMunaiGaz (KMG) and
Sinopec (2005) and the start of a series of takeovers that allowed China’s
“three-sisters”53 energy companies to obtain a strategically important
regional position. An example in this regard is the 2005 hostile takeover by
China of PetroKazakhstan, a Canadian-registered company with all its
assets located in Kazakhstan. This deal guaranteed Beijing full ownership
of several oil fields in the Kumkol area, not far from the China–Kazakhstan
oil pipeline. The deal successfully displayed China’s long-term planning
and growing financial expertise in foreign stock markets. In contrast,
competitors from Indian and Russian state-owned groups, Oil and Natural
Gas Corporation and LukOil, failed to secure the deal.
During the last few years, Chinese SOEs have deepened their presence in
the region with energy pipelines, railroads, and highways, making a mark in
terms of quality as well as in the ability to execute projects within given
timelines. The dynamics of Central Asian energy exports are well
exemplified by the current political transition and uncertainty that
characterize the overall region. Long-term projects as well as planned
supplies are in constant fluctuation.54 The key geographical location of
Central Asia offers an effective energy supply route to multiple markets.
While Central Asia energy export potential is still significant in the long-
term, the medium-term production outlook remains uncertain.
On a North-South axis, Russia and Iran do not offer viable market
opportunities for Central Asian energy resources owing to their own large
gas reserves and recent dispute on gas deliveries. On the Western side, the
proposed Trans-Caspian pipeline offers Turkmenistan another bidder for its
own natural gas resources instead of Sinopec and the former monopolist
Gazprom. However, unresolved disputes on territorial boundaries in the
Caspian Sea are delaying the decade-old project. Another idea that lacks
project viability and political feasibility in the near future is the proposed
Turkmenistan–Afghanistan–Pakistan– India Pipeline (TAPI). While the
Trans-Caspian pipeline aims to secure energy supply to Europe—avoiding
any dependence on Russia—the TAPI is intended to link Central Asia and
South Asia, bypassing Russia, Iran, and China. Political support from
United States and India for the project is challenged by technical, financial,
and security problems. Starting from these premises, the Eastern route to
the Chinese gas market offers considerable opportunities. Considering the
current status quo, the energy market could be the tipping point of Central
Asia multi-vector foreign policy.
Another key component of the Chinese economic footprint in the region
is related to Beijing’s vision to promote market integration via modern
highways and railroads. China Railway High-speed (CRH) and China
Bridge and Road Corporation (CBRC) have already acquired a good
reputation with the Asian Development Bank and the Islamic Development
Bank through the construction of important infrastructural projects.55 In
contrast to a general reputation of a low-quality label, “Made in China”
CBRC constructions are synonymous with efficiency. An example is the
highway that crosses the Irkeshtam pass which offers good travel
conditions, despite the difficult climatic conditions. Beijing investments in
Kyrgyzstan focus on the upgrading of the road network to connect the
country’s market with Uzbekistan, Kazakhstan, and Xinjiang’s logistic
network.
The then-premier Wen Jiabao, during the September 2012 launch of the
Euro-Asian trade fair in Urumqi, mentioned that the autonomous province
of Xinjiang—given its strategic geographical location—is an ideal
springboard for investment that links China, Central Asia, and Europe. In
2011 alone, the rise in foreign investment in Xinjiang exceeded US$3
billion, helping cities like Hami and Kashgar to grow at 30 and 142 percent
respectively. In the first six months of 2012, the GDP growth in the
autonomous province exceeded the national average figures at 10.7 per
cent.56 China’s interest in the area per capita GDP increase is part of a long-
term strategy aimed to defuse social tensions. Therefore, the new road
networks, boosted during the beginning of the Twelfth Five-Year
Development Plan (2011–2015), would play a strategic role in overall
regional stability.
At the same time, the Beijing “Loans for Oil” financial model is leading
to an increase of scope and size in future cooperation projects.
Nevertheless, the suspicious local population welcomes the Chinese Yuan,
but not the migration of Chinese workers.57 The Central Asian countries are
apprehensive of deeper economic integration with China because of the
potential influence of foreign and security policies in these countries.
Taking into account the economic differences and necessities ranging from
Kazakhstan to Tajikistan, there is still a compelling need for infrastructural
investments. Countries like Uzbekistan are actively persuading foreign
investors to increase not only the cash flow but also technological transfer.
At the same time, each of the Central Asian countries is well aware that
increasing Chinese investment might also lead to an analogous increase in
political leverage.

China’s regional security architecture and the role of SCO

The evolution of the “Shanghai Five” into SCO resulted in positive
outcomes for the region, such as the resolution of the disputes over 3,000
km of land bordering China and Russia. In recent years, Moscow has tried
to shape the organization into a military-oriented structure, while Beijing
has kept a steady focus on economic and financial integration. The SCO’s
proven inability to intervene during the Kyrgyzstan crisis has underlined its
inherent limitations in safeguarding security and peacekeeping. While the
SCO Declaration of 15 June 2001 drafted a common vision for fighting
terrorism, extremism, and transnational crimes, the following ten years had
seen more bilateral initiatives than multilateral cooperation. The founding
of the 2005 SCO RATS was intended to regulate and implement long-term
security-cooperation programs under the framework of the SCO, while
promoting counter-terrorism M2M exercises.58 While the CSTO follows
Russia’s guidance in implementing a flexible and highly trained fast-
response military, the SCO under the aegis of China is prepared to promote
gradual economic integration. The creation of a common SCO bank would
further strengthen the economic integration process.59 Although the goal
seems too distant to be achieved in the near future, China is steadily
advancing this core objective with bilateral financial agreements with SCO
partners via both Yuan-currency swaps60 and direct investments in
infrastructures. Furthermore, the Loan for Oil policy enacted by China in
Africa and South America is also gaining more influence in the region.
In this respect, Russia was successful in hindering China’s financial
offensive in the area with the inclusion of Kazakhstan in the CIS customs
union, thereby shielding local production from Chinese competition. It
seems improbable that other countries such as Kyrgyzstan and Tajikistan
will follow the same pattern. While Kazakhstan and Russia rely on energy-
export earnings to sustain local industrial development, Kyrgyzstan and
Tajikistan face the dilemma of having to protect their markets from the
influx of cheap Chinese products and having to rely on the same products to
curb high inflation.61
In its second decade of existence, the SCO faces several challenges:
internal instability in some member states; spillover effects of the
Afghanistan conflict; Middle East “springs” and the “color revolutions” of
neighboring countries; new non-traditional security threats arising from
water security; and transnational money laundering, as well as drug and
human trafficking. While China is slowly but inexorably acquiring a
progressive foothold in the Central Asian logistics and economic systems,
Beijing must realize that any failure to enact an inclusive developmental
model could spark social unrest and foster latent anti-Chinese sentiments
among the local population. Meanwhile, the progressive reduction of trade
barriers between Xinjiang and the five republics could promote social
integration.
China’s huge population and increasing demand for land create an
underlying fear in the region. There is a widespread perception that Chinese
migrant workers would eventually settle down in Central Asia given the
regional proximity with Xinjiang and the employment opportunities offered
by Chinese SOEs. The main fear is related to the possibility of an
unbalanced growth between locals and migrants in remote and scarcely
populated areas as well as the possibility of Chinese migrants becoming the
majority in certain parts. These fears—imaginary as well as real—require a
common business negotiation to consider, not only the financial viability of
the project but also the social compatibility dimension. Ranging from land
acquisitions to natural resource exploitations, there is the need to take into
account behavioral variables. The incident at the Chinese-owned Taldy-
Bulak Levoberejny62 gold mine in Kyrgyzstan exemplifies this issue. More
than 500 local residents physically confronted 300 Chinese miners
operating on behalf of a privately owned Fujian gold-mining company.
According to the Russian News Agency RIA Novosti, a minor incident
triggered the violent confrontation that was settled only by police
intervention and the relocation of the Chinese workers to another village.
The fracture points in the Chinese investment model surfaced easily,
evidence of the long-standing diffidence towards Chinese from region’s
historical context to present-day inequalities and disparities in economic
treatment.
Moreover, there is a diffused perception that Chinese companies operate
a predatory policy, depleting local resources without allowing any positive
economic spillovers into the local communities. Serious incidents caused by
the lack of worker safety, pollution, and endemic corruption in most
common business practices have fueled various forms of tension, with the
potential to spiral into violence and incidents of international scope. China’s
main task now is to refrain from giving the impression that it is simply
using Central Asia as a resource pit.63
While China’s interests in the overall region are increasing, Beijing’s
willingness to use force continues to be conservative. At the same time, the
presence of US bases operating directly or via private security companies
(such as Academi, former Xe-Blackwater) could nurture China’s “western
arc of containment” paranoia. Even a proxy US presence in the area could
be perceived by Chinese officials as American attempts to surround China.
For example, the lack of international agreements has led to the extensive
US deployment of drones in areas surrounding China’s borders. This has
raised security concerns for Beijing. The rise of the number of drone
missions during the last two years64 in the area could potentially propel an
arms race as well as exacerbate the overall distrust.
Also the handling of the Afghan issue after 2014 will test the prospect of
Central Asian security architecture. The security concerns are already
appearing over the horizon, but the mechanisms to handle the challenges
have not been put into full effect. A lack of intervention may lead to
regional instability, whereas the primacy of only one state in the
peacekeeping role may be perceived as hegemonic. The near future is still
characterized by short-term bilateral cooperation efforts, rather than long-
term solutions. An example of this trend is the trilateral consultation
mechanism institutionalized in 2011 by Beijing, Islamabad, and Kabul, with
Pakistan and Afghanistan as observers in the SCO.
The needs for both an effective regional security mechanism and an
operative system for crisis management—mutually agreed upon by the SCO
member states—have led to closer relations between Uzbekistan and
Kazakhstan. Only a few years ago, such a relationship was deemed highly
improbable due to both countries’ race for the leading position on regional
affairs. Uzbekistan and Kazakhstan’s efforts underline how both the SCO
and CSTO are either unable or unwilling to face major security threats.65

The economic cost of Asian nationalism: cooperation,

competition, or conflict?
Although China’s soft power is currently increasing in the region, the
unwillingness of Beijing’s recently appointed fifth generation of leaders to
export a “Chinese Model” still riddled with inner contradictions must be
taken into account.66 China has yet to undertake internal structural changes
of creating a sustainable economy with a welfare-state system capable of
ensuring accessible health care for an aging population, addressing the
seasonal spikes of migrant unemployment, and providing a financial safety
network against excessive borrowing and bad loans to provincial
governments. Coping with these current domestic issues would also equip
Beijing with new tools to implement economic and social integration
successfully in Central Asia, translating the “Chinese Model” into the
successful “Chinese Dream”.67 Beijing is capable of influencing ideas and
setting the agenda in Central Asia regional forums but the counterbalancing
interests of Russia are giving space to each Central Asia country to play a
multi-vector foreign policy. The failure to establish the SCO Development
Bank promoted by China68 is a clear illustration that regional integration
will not come by the choice of a sole hegemonic power.
Chinese leading commitment in building Central Asian logistic and
economic infrastructures, with trade integration of Afghanistan into the
SCO club, could start a virtuous stabilization process. In the meantime, the
security and power vacuum in the region is going to stimulate a possible
cooperation between aspiring local powers, namely Kazakhstan and
Uzbekistan. Central Asia regional security stabilization will have to focus
on its internal threats posed by local regime changes and by local armed
radical groups, apart from just staring at religious extremism coming from
Afghanistan. Central Asian security narrative is far more complex than the
one that takes into consideration only the military or only the economic
growth of China. While Chinese investments in military modernization will
enable Beijing in the mid to long term to increase PLA missions’ scope and
range, in the short term, China’s main instrument to influence regional
outcomes still involves economic tools. Considering that the rising local
discontent is directed against unequal resource distribution and the ruling
political system, the solution is regional economic integration. Such
integration will reduce the chance of domestic violence, and increase
regional capabilities to quell transnational criminal networks and religious
extremists. Also Central Asia integration will enable a faster and efficient
response to regional security threats through coordination among the
regional countries and international organization ranging from SCO and
CSTO to OSCE, without the exclusive leadership of an external
superpower.69
In the short-term, the regional economic model (based on the export of
natural resources) has to be shielded from sudden financial crisis.
Additional steps for structural reforms have to be taken to solve the issues
of growing state debts, inefficiencies in public spending, and limited fiscal
revenues. In the long term, there is the need to promote a balance between
the public and private sectors; in this regard efforts should be channeled to
make public spending transparent, establish an efficient banking system and
develop human capital. Consequently, the conditio sine qua non to regional
sustainable growth is related to each Central Asian country’s capacity to
preserve its own internal stability and border security while maximizing the
efficiency of the Chinese investment capital flow. In the multilateral
perspective, China has to refrain from adopting an aggressive policy of
natural resource exploitation, and instead, it should make an effort to
support an inclusive growth in Central Asia. On the energy chessboard,
Central Asia is prepared to become a strategic arena with China as a
prominent player. Therefore, the growing Chinese economic predominance
in Central Asia and the threats related to porous borders are leading Beijing
to become an “unwilling” leading security provider.

Notes
1 Alessandro Arduino, The Influence of China’s Sovereign Wealth Fund in Central Asia: China’s
New Role in a Multi-Polar World and What It will Mean for the EU (CASCC, 2011) p. 5.
2 Tao guang yang hui: not to show off one’s capability but to keep a low profile. Xiong Guangkai,
China’s Diplomatic Strategy: Implication and Translation of “Tao Guang Yang Hui” by General
XGK, former Deputy Chief of Staff of the Chinese People’s Liberation Army (Chinese People
Institute of Foreign Affairs, 2010).
3 Joshua Cooper Ramo, The Beijing Consensus (London: Foreign Policy Centre, 2004).
4 Zhongguo moshi: China’s model, state-led alternative to neo-liberal model.
5 Berry Naughton, “China Distinctive System: Can It be a Model for Others?” Journal of
Contemporary China 19: 65, 2010.
6 “The strength of Pakistan-China friendship and its steady growth are based squarely on the
convergence of their strategic interests.” Ambassador Javid Husain, “Prospects of China-Pak
friendship,” The Nation, March 5, 2103.
7 Li Lifan, The SCO and how Chinese Foreign Policy Works (SIPCAS, 2011) p. 157.
8 Pang Zhongying, China’s Soft Power Dilemma: The Beijing Consensus Revisited (London:
Lexington Books, 2009).
9 Najiam Rafique and Fahd Humayun, Washington and the New Silk Road: A New Great Game in
Central Asia? (Institute of Strategic Studies Islamabad, 2011).
10 Bulat Sultanov, http://eurodialogue.org/Bulat-Sultanov-We-Shouldn-Be-Afraid-of-Neighbors-
but-Respect-Them.
11 Vladimir Putin, “A new integration project for Eurasia: The future in the making,” Izvestia
Daily, October 4, 2011.
12 Max Webber’s definition of “Sultanistic Regime” where the locus of power is personalized by a
network of family and tribal relationships.
13
 . . . a general absence of civil society which has to be blamed not on repression but on the
retraditionalisation of Central Asia’s political and the social life which began in late 1980s’
understood here as the revival of kin-based (blood or social) networks of association.
(Gretsky Sergei, A new security architecture for Central Asia? Central Asia–
Caucasus Institute–Johns Hopkins University, March 16, 2011)
14 Zhang, Baohui, “Chinese foreign policy in transition: Trends and implications,” Journal of
Current Chinese Affairs, 39: 2, 2010, 39–68.
15

Turkish investment and interest in Central Asia, not least in energy assets, has also grown
considerably. To the degree that Turkey takes for granted that it is foreordained to play the
role of an energy hub between the Caspian and Central Asian Producers and European
consumers . . .
(Stephen Blank, “What impact would Turkish membership have on the SCO?”
CACI Analyst, April 2013
16 In June 2013, the Kyryz Supreme Council endorsed a bill signed by President Atambayev that
will end the lease of the Manas transit center to the United States in June 2014.
17 Putin, “A new integration project for Eurasia.”
18 Kadyrov Shokhrat, Systemic Transformation of the States of Central Asia (International
Research Program Eastern Study Department, Institute of Political Science – University of
Warsaw, 2008).
19 W. Baumol, R. Litan, and C. Schramm, Good Capitalism, Bad Capitalism and the Economics of
Prosperity and Growth (Yale University Press, 2007).
20 “Considering that each Central Asian country shares extensive borders with several equally
crisis-prone neighbors, security disintegration in one could have swift and disastrous
consequences for the rest.” China’s Central Asian Problem, Crisis Group Asia Report no. 244,
February 27, 2013, p. 27.
21 Xing Guangcheng, The Relationship between China and the New Independent Central Asian
Countries (Haerbing: Heilongjiang Education Press, 1996).
22 Ibid.
23 “Central Asia conjures up different associations for different people. In its recent history, the
issues that surround oil, political and socio-economic transition and security have shaped and
dominated the way in which the region is perceived.” Sally N. Cummings, Oil, Transition and
Security in Central Asia (London: Routledge, 2003) p. 162.
24 “China for both economic and security purposes, is interested in maintaining the status quo in
Central Asia.” China’s Central Asian Problem, Crisis Group Asia Report no. 244, February 27,
2013, p. 13.
25 Nargis Kassenova, China as an Emerging Donor in Tajikistan and Kyrgyzstan (Paris: IFRI,
2009).
26 “SCO sets blueprint for next decade,”
www.scosummit2012.org/english/2012-;06/08/c_131640161.htm.
27 Shi Lan, “International Symposium on Central Asian and Xinjiang: Cooperation and Mutual
Benefit,” Urumqi, July 12, 2013.
28 “Much like the inexact art of Kremlinology—divining the fortunes of the Soviet elite—
Kazakhstan has produced its own parlor game of tracking the ups and downs of various political
players.” Philip Shishkin, Central Asia Report (Asian Society, 2012) p. 8.
29 http://news.xinhuanet.com/english/china/2013-;04/29/c_132349219.htm.
30 Tehrik-e Taliban Pakistan (TTP), Islamic Movement of Uzbekistan IMU.
31 Interviews conducted by the author with Chinese scholars in Shanghai and Urumuqi. Jacob
Zenn, “The Indigenization of the Islamic Movement of Uzbekistan,” Jamestown Terrorism
Monitor, Vol. 10 Issue 2, January 26, 2012.
32 “Central Asia might develop into a conflict like Middle East.” China’s Central Asian Problem,
Crisis Group Asia Report no. 244, February 27, 2013, p. 17 note 107.
33 J. Bellacqua, The Future of China-Russia Relations (Lexington: University Press of Kentucky,
2010).
34 Regional Anti-terrorist Structure (RATS), www.ecrats.com/en/normative_documents/2005.
35 “Russia and China fear domestic terrorism (in Chechnya and Xinjiang, respectively), are
concerned with instability in Central Asia, are opposed to “color revolutions” in Central Asia,
and seek to limit US and NATO influence in the region.” Bellacqua, The Future of China-Russia
relations.
36 Official Chinese military spending budget of 670.2 billion Yuan (US$106.26 billion) for 2012,
an increase of 11.2 percent from the 2011 budget. (Li Zhaoxing’s announcement prior to the
18th CPC National People’s Congress, October 2012).
37 Qiao Liang and Wang Xiangsui, Chao xian zhan (Hubei: Chang Jiang Ed. November 2010).
38 Mark Ryan, David Finkelstein and Michael Devitt, Chinese Warfighting: The PLA Experience
since 1949 (New York: Shape, 2003).
39 Annual Report to Congress, Military and Security Developments Involving the People’s
Republic of China 2012 (Office of the Secretary of Defense, May 2012) pp. 34–35.
40 Ibid., p. 4.
41 Richard Weitz, “Assessing Russian Chinese Military Exercises,” Small Wars Journal,
September 30, 2009
42 Zhao Huasheng, Shanghai Cooperation Organization: Analysis and Outlook, (Beijing:
Publishing House of Contemporary Affairs, 2012).
43 Dennis J. Blasko, “People’s Liberation Army, and People’s Armed Police ground exercises with
foreign forces,” in Roy Kamphausen, David Lai and Andrew Scobell (eds), The PLA at Home
and Abroad: Assessing the Operational Capabilities of China’s Military (Strategic Studies
Institute, 2010).
44 A. Shavrov and M. Galkin, Metodologiia voennonauchnogo poznaniia (Moscow: Voenizdad,
1997).
45 Azar Gat, “Clausewitz and the Marxists: Yet another look,” Journal of Contemporary History,
Vol. 27, No 2, April 1992, pp. 363–382.
46 US$15 million to Tajikistan (from 1993), US$2 million loans to Kyrgyzstan (from 2002),
around US$4 million to Uzbekistan (from 2000) and US$3 million loans to Turkmenistan (from
2007), for the purchase of Chinese equipment. S. Peyrouse and M. Laruelle, China as a
Neighbor, Central Asian Perspectives and Strategies (Central Asia–Caucasus Institute and Silk
 Road Studies Program, 2009) and S. Peyrouse, “Military Cooperation between China and
Central Asia: Breakthrough, Limits, and Prospects,” China Brief, Volume 10, Issue 5 (The
James Town Foundation, 2010).
47 Paul Holtom, Arm Transfers to Europe and Central Asia, SIPRI Background paper (February
2012), Table 1, p. 2.
48 “China to buy Russian fighters, submarines,”
www.globaltimes.cn/content/770621.shtml#.UY2Xlevl6Xs.
49 Zbigniew Brzezinski, The Grand Chessboard: American Primacy and its Geostrategic
Imperatives (New York: Basic Books, 1997).
50 Chinese private-security companies have already taken a few timid steps onto the international
scene, cooperating with more seasoned British and American contractors in crisis areas ranging
from Sudan to Iraq. At the same time, shifting the security role to a private company with
limited liabilities with the mission to protect Chinese workers and assets in foreign land, could
reduce the perception of China’s growing military power. Currently in Afghanistan, the problem
is addressed by Beijing contracting locally several layers of security, starting from local police,
to landlord militia, and finally to the Afghan National Army in order to avoid relying on a single
source of security and at the same time, preventing a direct confrontation between PLA and
insurgents (Author’s interview with Chinese scholars on the role of private Chinese contractors,
Shanghai, 2013). “With the US forces pull out, Chinese miners in Afghanistan will increasingly
be on their own for security.” For more information on private security firms in China, refer to
Ericson Andrew and Collins Gabe, “Enter China’s security firms,” The Diplomat, February 21,
2012 and Daniel Houpt “Assessing China’s response options to kidnappings abroad,” China
Brief, Volume 12, Issue 10 (Jamestown Foundation, 2012).
51 “Fear of the Dragon. China still spooks his neighbors,” The Economist, November 11, 2004.
52 Chen Zhimin, Soft Balancing and Reciprocal Engagement: International Structures and China’s
Foreign Policy Choice (Academic Papers, FUDAN University, n.d.) pp. 16, 18–19, available at
www.cewp.fudan.edu.cn.
53 CNPC-Petro China, Sinopec Group, and CNOOC Ltd.
54 ENI, Kazakhstan Turkmenistan Highlights (Rome, 2011).
55 Blog edited by Raffaello Pantucci: http://chinaincentralasia.com.
56 Source: “Xinjiang’s half year GDP grows 10.7 percent,” China.org.cn, July 23, 2012,
www.china.org.cn/business/2012-07/23/content_25997337.htm; “Xinjiang’s GDP grows 10.7%
in H1,” China Daily, July 24, 2012, www.chinadaily.com.cn/business/2012-
07/24/content_15612100.htm; “Investors drawn to Xingjiang,” China Daily, September 12,
2012, www.chinadaily.com.cn/business/2012-09/03/content_15727783.htm.
57 “The new Chinese roads are perceived by the local population as a fast transit route for Chinese
tanks.” Raffaello Pantucci during 2012 symposium in Shanghai.
58 Sun Zhuangzhi, New Structure in Central Asia and Regional Security (Chinese Academy of
Social Sciences, 2001) pp. 20–21.
59 “Chairman of China Development Bank (CDB) Chen Yuan told a press conference on the
sidelines of the SCO summit that the CDB’s loans within the SCO focus on energy
infrastructure, transportation, agriculture, and trade.”
http://news.xinhuanet.com/english/china/2012-06/06/c_131635781.htm.
60 Source: China Statistical Yearbook 2011: 841.2 billion Yuan China preferential swaps with 12
countries; 2009: oil for infrastructure loans 10 billion US$; 7 billion Yuan (2009 to 2011) swap
between People’s Bank of China (PBoC) and National Bank of Kazakhstan.
61 Ali Al-Eyd et al., Global Food Price Inflation and Policy Responses in Central Asia (IMF,
March 2012) p. 6.
62 The gold mine has been acquired by the Chinese company Zijin Mining Group from Fujian in
2011 for US$660 million following a trend from 2009 that has seen more than 50 Chinese
mining companies operating in the area. Liu Linlin, Global Times, October 26, 2012.
63 Li Lifan, The SCO and how Chinese Foreign Policy Works (Stockholm International Program
for Central Asian Studies) p. 161.
64 Of all USAF airstrikes in Afghanistan in 2012, 8.8 percent (263 of 2989) were by
Predator/Reaper UAS. Peter W. Singer, “Do Drones Undermine Democracy?” New York Times,
January 21, 2012, www.nytimes.com/2012/01/22/opinion/sunday/do-drones-undermine-
democracy.html?pagewanted=all&_r=0 and Noah Shachtman, “Military Stats Reveal Epicenter
of U.S. Drone War,” Wired, September 9, 2012, www.wired.com/2012/11/drones-afghan-air-
war.
65 “The sources of domestic weakness and violence in Central Asia and the promotion of agendas
of reform are being overlooked in favor of combating the future threat of external terrorism.”
Neil Melvin, Don’t Oversell Overspill: Afghanistan and Emerging Conflicts in Central Asia
(Central Asia Policy Brief, no. 6, December 2012).
66 Roland Beck and Michael Fidora, The Impact of Sovereign Wealth Funds on Global Financial
Markets (Frankfurt, European Central Bank Occasional Paper Series no. 91, July 2008).
67 “Chasing the Chinese dream: Xi Jinping’s vision”, The Economist, May 4, 2013.
68 “China may contribute $8 billion to establish SCO Development Bank. . . . Chinese Premier
Wen Jiabao proposed during the 9th prime minister meeting in Dushanbe.” China Daily,
December 2, 2010.
69 Sultanov K. Bulat, “The Shanghai Organisation for Cooperation: The Tool for Security in
Central Asia?” in Anja H. Ebnöther, Maj. Ernst M. Felberbauer and Martin Malek (eds), Facing
the Terrorist Challenge (Geneva Centre for the Democratic Control of Armed Forces, 2005) p.
259.
12 China’s challenges in
accommodating both Koreas
Choo Jaewoo

Introduction
China’s rise is not without challenges. Although China has been persistent
and consistent in its peaceful rise discourse, its recent behavior was neither
convincing nor exemplary in the eyes of the neighboring states. Even its
lone ally, North Korea, would readily agree. Beijing’s external behavior has
been often dubbed as “aggressive” and “assertive” towards Pyongyang.
China has aggressively persuaded North Korea to adopt economic reforms
and a policy of opening the country in recent years, drawing a positive
response from it at one point. It has also been assertive in pressuring North
Korea once negotiation for such policies began. However, Beijing’s
assertive demands would only backfire should Pyongyang decide to halt all
the negotiations and implementation of mutually agreed issues.
South Koreans do not think that China’s reactions to the tragedies
inflicted by North Korean military provocations were acceptable according
to international norms. China refrained from expressing condolences for the
loss of 46 South Korean sailors to their government. It often sided,
explicitly or implicitly, with North Korea. For example, it blamed South
Korea for ignoring North Korea’s repeated warnings against participating in
the joint military exercises with the United States. China’s behavior has
been widely perceived as violating international norms and contradicting
the world’s verdict on North Korea as the perpetrator. In this context, South
Korea is naturally worried when China, a great power, ignores international
norms.
Some critical questions arise in this context: What will it take for Beijing
to better accommodate China’s interest in both Koreas? Will it be able to
balance its relations between a traditional ally and a newfound partner? Can
we expect China to be more normative in dealing with developments in
inter-Korean relations? Will China’s current behavior position China as a
facilitator or bystander of the peace and stability of the Korean Peninsula?
What would be the best possible way for China to position itself in the
ongoing confrontation between the two Koreas? The answers lie in the way
China has been pursuing its interests in each Korea. While Beijing tries to
sustain cooperative and friendly relations with Seoul through successful
summits, it attempts to lure Pyongyang to adopt economic reforms to open
up the country.

South Korea’s concerns about China’s rise

South Korea’s concern with the rise of China is threefold. First, the rise of
China poses some fundamental questions for South Korea: How will China
position itself on Korean Peninsula unification in general, and North Korea
in particular? Will China cooperate and embrace the consequences of the
unification? Alternatively, will it hinder the unification process by taking
over North Korea? In other words, from Korean perspectives, will it
become a force that saves North Korea from getting absorbed by South
Korea, or from the possible economic hard landing? With its growing
economic power, Beijing is widely perceived as capable of using its
economic resources and other financial tools (such as aid and soft loans) to
prevent Korean unification under the auspices of Seoul. Some extreme
opinion in Seoul even argues that Beijing is willing to annex Pyongyang as
its fourth province in northeast China along with three provinces, Heilong,
Jilin and Liaoning.
The second concern is whether China’s external behavior will fully
comply with international norms and practices. For many South Koreans,
China’s behavior has fallen short of international norms. There is growing
skepticism over China’s behavior as it accrues more and more power and
wealth. Many neighboring states doubt whether China’s compliance with
international norms and practices will be commensurate with its rising
regional and global power status. They believe that the best way for China
to act responsibly is to follow international norms and practices, and by
doing so, assuage South Korea’s concerns and positively influence its
perception of China’s rise.
China has not had any particular compliance record on security conflicts
that is instigated by its ally. The most recent case is China’s belated
condolences on the loss of 46 South Korean sailors when the corvette
Cheonan vessel was sunk by a North Korean submarine in March 2010.
China took almost a month to deliver condolences to the South Korean
government and people. China also failed to comply with UN sanctions
when it had voted for North Korea’s successive nuclear tests. China failed
to heed the international community’s call to condemn North Korea for
shelling Yeonpyeong Island and killing two South Korean marines and two
civilians in November 2010. Despite the fact that the entire shelling was
televised live by CCTV, a television station run by the Chinese Communist
Party, Beijing justified the shelling by citing North Korea’s reasoning. Both
incidents show that Beijing failed to conform to international views and
sentiments on North Korea’s wrongdoings.
The third concern relates to China’s unilateral and aggressive actions
taken for its interests, while neglecting those of others. South Korea has
experienced such behavior from China in the past. All the cases in which
China had displayed such behavior critically undermined the confidence,
trust, amicability and fondness that the South Korean public had for China.
Such a diminished perception of China in turn jeopardizes Chinese public
sentiments towards South Korea.
Moreover, South Koreans feel snubbed by the Chinese because they often
shut down the channels of communication at their own discretion. The
Chinese tend to act on reasoning such as whether the issue is a sovereign
matter, whether the claim is groundless, whether Chinese interests are
involved, among others. Stripped of opportunities to air its view, the South
Korean government often doubts the effectiveness of China’s “New
Security Concept” to solve conflicts by peaceful means (negotiation). All
these cases, in the eyes of the South Korean public and elites, only
pinpoints to one conclusion: On a whim, China would cancel talks
whenever it conceives that talks are not necessary and it can also act
unilaterally without considering others’ needs because no one can challenge
it.
China has displayed this attitude during discussion with South Korea
over issues of mutual concern. For instance, South Korea’s decision in 2000
to sanction full-fledged safeguards on the import of all Chinese garlic
products was intended to protect Korean farmers’ interests. China retaliated
by banning imports of mobile handsets and polyethylene that were
absolutely irrelevant to the issue but caused much more damage to its
economy and trade. The negotiation was only resumed at the will of China
after China gained the upper hand and South Korea made heavy
concessions.
Another incident caused the worst downturn in the short history of the
bilateral relationship. In 2004, China undertook a study project to
incorporate one of the Three Kingdoms of Korea, Koguryo (37 bc–ad 668)
into its local history. The rewriting of the history project, known as
“Northeast Project” (Dongbeigongcheng), was undertaken by Chinese think
tanks in a northeastern province and authorized by the Chinese Communist
Party (CCP). The South Korean public was naturally upset by China’s
distortion of their ancient history and regarded China guilty of doing the
very same thing it accused Japan of doing. China at first said that it was
open for discussion but soon closed the matter, citing reasons related to
“internal” and “sovereignty” matters. China insisted on resolving the
problem through both countries’ scholars and experts. It sent its special
envoys, including then-Vice Foreign Minister Wang Yi in 2003, the Chinese
People’s Political Consultative Conference (CPPCC) Chairman Jia Qinglin
and another Vice Foreign Minister Wu Dawei on different occasions in
2004. Contrary to their suggestions, however, Chinese scholars to date are
banned from having informal meetings, let alone holding conferences with
their South Korean counterparts on this particular subject for obvious
reasons. South Korea’s favorable perception of China would eventually
reach its nadir.1
A salient example of concern associated with China’s rising power was
the sinking of the corvette Cheonan in 2010. The way China handled and
positioned itself in this incident highlighted South Korean concerns over the
rise of China. It will be discussed in greater detail below. The latest similar
concern comes with China’s unilateral declaration of an Air Defense
Identification Zone (ADIZ) in November 2013. China extended its ADIZ to
include part of South Korea’s Exclusive Economic Zone (EEZ) and also
part of its maritime territory, demarcated by a rock island called Leodo
Reef. At the third Korea–China military strategic dialogue held in Seoul in
November 2013, South Korea motioned the issue to the floor only to meet
China’s outright rejection. China offered no explanation for its refusal and
we can only assume it adopted the “sovereignty and internal matter”
reasoning again.
After experiencing the aforementioned incidents, South Korea became
more discontented with Chinese behavior that followed China’s rise. There
is a growing propensity in South Korean society not to view China’s
external behavior as normative. Words such as snobbish, negligent,
indifferent, snubbing, unilateral and bullying are commonly used in South
Korean media to describe Chinese external behavior. Widespread
discontent, however, is not always without a cure. Every time a contentious
issue emerged, the bilateral relationship between South Korea and China
would return to its friendly, cordial, amicable, accommodating and
cooperative form, with help of summit meetings. Fortunately for the two
countries, the successive upgrading of the partnership relationship has been
the panacea that saved the relationship.
Successful summits, for instance, have entailed sequential upgrading of
the partnership relations: cooperative partnership in 1998, comprehensive
partnership in 2003, strategic partnership in 2008 and strategic cooperation
in 2013. Upgrading of the partnership may embody no more than political
symbolism as the leaders of the two states have a propensity to bestow
much literary meaning to their diplomatic endeavor. Nevertheless, South
Korean people tend to subscribe to rhetoric without proper understanding of
the definition of partnership. Neither did the leaders clearly understand the
meaning of the partnership. In the end, however, South Koreans realize the
importance of enhancing ties with China. Changes in mutual perception of
the South Koreans and Chinese following the summit helped to overcome
mutual misgivings.
China’s peculiar response to the sinking of the Cheonan
Despite upgrading the bilateral relationship of South Korea and China to
strategic partnership in 2008, the notion of the partnership was challenged
by the sinking of the Cheonan. South Korea had banked on China’s
normative response (i.e. immediate act of expressing condolences over the
tragic incident). However, China withheld from conveying condolences
because it decided not to get involved in the international investigation. It
was not the first time that South Korea has suffered from human casualties
inflicted by North Korea’s provocations in the post-Cold War era. Neither
was it the first time that China refrained from making an immediate and
normative response to South Korea’s losses and sufferings. Beijing, for
obvious political reasons such as its alliance with North Korea, refrained
from acting normatively toward Seoul. Over time, the effects of China’s
persistently indifferent, crisis-averse attitude has taken a toll on the South
Korean public. A significant drop in South Korea’s favorability rating of
China (from 48 percent in 2008 when the strategic partnership was forged
to 38 percent in 2010). The implications of its rise spoke volumes, given
China’s abnormal behavior after the sinking of the Cheonan.2
China’s attitude towards the South Korea–US handling of the Cheonan
case underwent a series of changes. At the outset of the sinking, it
maintained a traditional crisis-averse attitude. Without immediately issuing
any note of condolence for the loss of 46 lives when the Cheonan corvette
sank on March 26, 2010, for a month, China insisted that the parties
involved keep calm, and remain objective in their investigation. It was not
until April 20, 2010 that China issued a statement to express “deep regrets”
and commitment to monitor the “scientific and objective investigation
process” led by South Korea.3 When the Joint Investigation Group’s Final
Report was issued on May 20, China finally expressed “condolences for the
victims of the Cheonan incident.” Nevertheless, it denied the investigation
report that North Korea was the culprit. It reasoned that “investigative
results were not yet finalized,” and insisted that “the issue be settled
peacefully.” The Chinese call for peaceful settlement meant “restraint and
calmness by the related parties, prevention of further tensions in the region,
maintenance of peace and stability, resumption of the Six-Party Talks, and
upholding of non-proliferation principle on the Korean Peninsula.”4
 After Beijing’s seeming reversion to “taking into consideration the
reports of the investigation” in its future consideration of the sinking case, it
once again changed its position. It strongly opposed the punitive measures
such as joint military exercises held by United States and South Korea. It
was also defensive of North Korea’s push for referral at the UN Security
Council in early June. China only called it “hypothetical,” implying that the
hasty decision was based on circumstantial evidence only because of the
ongoing and inconclusive nature of the investigation.5 China’s defensive
posture was confirmed by Premier Wen Jiabao during his visit to South
Korea later that month. He reiterated Beijing’s resolve to “judge (the case)
objectively and decide action based on the truth of the matter” with a strong
implication that it would decline to comply with Seoul’s request for support
in condemning North Korea.6 Accompanying Premier Wen, Zhang Yunling,
Director of Academy Division of International Studies at Chinese Academy
of Social Sciences (CASS), confessed, “It is difficult for China to provide a
clear stance on this issue, since China’s support for South Korea can lead
North Korea to the brink and possibly provoke Pyongyang to go to war.”7 It
was a clear indication that China had no intention to back up South Korea
for it believed that the crisis escalated because of the measures taken by
Seoul and Washington.
China’s response to the incident would become more peculiar later when
South Korea and the United States decided to conduct a joint military
exercise as both a punitive and remedial measure to boost defense against
North Korea’s submarines and torpedo-type attacks. Before the decision
was finalized, and before the announcement of the plan in early June, China
vehemently expressed its objection on the grounds that unrestrained
measures as such could have potential to escalate the tension in the situation
and it simply insulted South Koreans. When the plan became official on
June 2, 2010,8 the Chinese Foreign Ministry released a statement two days
later, calling “related parties to show coolness and prevent escalation of
tension in the region,” and to take “note of Deputy Chief of PLA’s General
Staff Ma Xiaotian’s (recent) opposition to South Korea-US joint military
exercises off the Yellow Sea.”9 Building on these remarks, Luo Yuan, Major
General of the Chinese People’s Liberation Army (PLA) think-tank Military
Science Academy, contended that “US aircraft carriers would be targets for
Chinese military drills should they exercise on the Yellow Sea.”10 The
deployment of US aircraft carriers was simply beyond Beijing’s
comprehension, prompting Beijing to relate these defensive exercises to the
core of the United States’ renewed Asian policy.11 Skeptical of the United
States, though reluctantly, China exercised restraint and continuously called
for “related parties to show understanding and to acknowledge the position
of China.”12
Two factors are attributable to China’s assertiveness. First is China’s
abrupt and precarious reinterpretation of the definition of its maritime
territory in association with the Korean Peninsula. China has incorporated
the Yellow Sea as its front waters and now sees the Yellow Sea not as a
territory that can be shared (i.e. public waters), but rather as an extension of
its sovereign territory (i.e. territorial sea).13 Therefore, it claims to have all
rights to oppose all international naval activities off the Yellow Sea. The
area is no longer conceived as a mere security buffer of China, but is now
compounded with the concept of national security interest, and regarded as
a so-called “core interest” in its own right. Second, China remains anxious
about the uncertainties of the consequences of the military exercises.
Beijing claims that its military exercise in the Yellow Sea in June prior to
the US–South Korean military exercise in September as regular and
legitimate, discounting any latent uncertainties.14 However, it sees the latter
as a potential threat to the peace and stability of the region.15 Should China
continue to treat the Yellow Sea as its backyard? China could perceive US–
South Korean military exercises as offensive, and this leads to negative
consequences for regional security.

South Korea’s perception of China’s rise

It is widely accepted that China will continue to grow economically and
accrue more political and military power in the foreseeable future.16
Strategic and policy implications of China’s rise may vary according to a
state’s geographical location and geostrategic position to China; its
economic dependency on China; and the level of its playing field, regional
or global. Recent surveys found that many neighboring states including the
United States feel threatened by the prospect and possible consequences of
China’s rise.17 Assuming the states are referent objectives to the rise of
China, the sense of insecurity stems from the uncertainty in China’s non-
democratic behavior.
South Koreans are gravely concerned about the impact of China’s rise on
the fate of the Korean Peninsula. These concerns are most commonly found
in the domain of questions asked in surveys associated with the rise of
China. Some common survey questions include: How favorably do you
view China and its rise? Which country (United States, Japan or Russia) do
you think will oppose South Korea’s unification with North Korea the
most? Will a risen China be a threat or which country will be the most
threatening to South Korea in the foreseeable future?
In general, South Koreans have usually held a favorable view towards
China. However, since 2010, South Korea’s favorability ratings of China
have consistently taken a downward spiral from 52 percent in 2007 (when
the last pro-China government was in Seoul) to 38 percent in 2010. It rose
by 8 percent to 46 percent in 2013 following the summit in June.18 Despite
higher favorability ratings, an overwhelming majority of Koreans (79
percent) believes that China has little consideration for South Korea’s
interest. It is another living proof of China’s abnormal behavior affecting
South Korea’s perception of China.19
According to the results of an annual survey conducted by the Institute of
Unification and Peace at the Seoul National University in the summer of
2013, China was regarded as a competitor by 43.9 percent of respondents, a
cause for alarm by 35.3 percent of respondents, a cooperative partner by
22.4 percent of respondents, and an adversary by only 3.2 percent of
respondents.20
However, if questions were polarized into answers with choices such as
competitor or as cooperative partner, survey results show that South
Koreans have a rather balanced view about China. For instance, in 2013,
there was a persistent pattern in the diversity of their views: the ratio of
competitor and cooperative partner standing at 4:5 or 3:5. The slight
variation is generally attributed to the outcomes of the summit. However,
there seems to be persistency in South Korea’s view at 4:5. In general, half
of the South Koreans still regard China as a cooperative partner, albeit a
competitor view is on the rise.21
 Results of a survey indicate several nations that favor the notion of
Korean unification: the United States (29.4 percent), China (7.6 percent),
Russia (5.3 percent) and Japan (2.0 percent).22 China was perceived as the
most influential country regarding unification by 59.4 percent of
correspondents. The United States followed with 25.3 percent and Japan 7.6
percent. Regarding China’s position on unification, 59.6 percent of South
Koreans thought that China wanted neither South Korea nor North Korea to
achieve unification but preferred the status quo. While 26.2 percent of
respondents were convinced that China would want North Korea to achieve
unification, only 5.7 percent thought China would agree to unification by
South Korea.23 When it came to the question whether states are an
impediment to the unification, the survey showed the following ratings:
China (47.1 percent), North Korea (17.9 percent), the United States (17.6
percent), Japan (7.6 percent) and Russia (2 percent).24
Another annual survey, conducted by the Hyundai Economic Research
Institute in 2013, showed 38.1 percent of South Koreans thought that China
would be the most helpful state, second to the United States (45.5 percent);
35.2 percent of the experts agreed. Compared to the previous year when
29.2 percent of respondents thought China would be the most helpful state,
there was a slight jump in the South Koreans’ perception. A significantly
large increment was witnessed in the expert group compared to the previous
year when a mere 18.8 percent agreed. In 2012, the majority of South
Koreans (67.6 percent) picked China as the state that most opposed
unification. In 2013, China was still given the same status, though the
approval rating dropped to 45.2 percent. The experts showed a similar
pattern in agreeing with the general public in 2012. In 2013, the survey
results showed the ratings at 69.0 percent and 52.4 percent respectively.25
The state that posed the biggest security threat in the next ten years was
perceived to be China (40.9 percent), followed by North Korea (21
percent), Japan (20 percent), the United States (7.1 percent) and Russia (1.3
percent). Another survey also showed that China was perceived as the most
threatening state and the rest in a different mix. The results were as follows:
China (53.2 percent), followed by the United States (13.5 percent), North
Korea (11.4 percent), Japan (8.4 percent) and Russia (2.5 percent).26
However, the current most threatening state was picked in the following
order: North Korea (37.8 percent), Japan (27.8 percent), China (18.3
percent), the United States (6.6 percent) and Russia (2.3 percent).27

China’s North Korean policy: change or no change?

Interest in the development of China’s North Korean policy is increasing for
two reasons. First, such interest stems from bewilderment over China’s
recent and alleged practice of sanctions on North Korea. The decision is
unprecedented because Beijing voted in favor of UN punitive sanctions but
refused to take part in them. Yet Beijing has reportedly imposed sanctions
on North Korean financial transaction and cross-border cargo inspection
since April 2013. These sanctions adopted by Beijing are independent of
those set by the UN resolutions.
Second, such interest also stems from the growing frustration of the top
Chinese Communist Party (CCP) leaders. These leaders seldom expressed
their discontent prior to North Korea’s first nuclear test in 2006. They
labeled North Korea’s behavior as hanran or “brazen.”28 China’s recent
frustration erupted not only at the ministerial level (e.g. Foreign Affairs
Minister), but also at the party level (i.e. the members in the Politburo’s
Standing Committee of the CCP including Li Keqiang, the current premier
and the number two man in the Party). While their warnings were explicitly
directed at North Korea, the number one man in the party, General
Secretary Xi Jinping, delivered a similar message to Pyongyang, though in
a more discrete and indirect way.
For example, while Chinese Foreign Minister Wang Yi alerted North
Korea not to make any trouble on his nation’s doorstep on April 7, 2013,
Chinese Premier Li Keqiang warned North Korea to “halt provocations” on
April 13, 2013. On April 8, 2013, in his keynote speech at Boao Forum held
in Hainan, Xi indirectly told Pyongyang, “No one should be allowed to
throw a region and even the whole world into chaos for selfish gains.”
Furthermore, on April 15, 2013, an editorial in Renmin Ribao (People’s
Daily) which is known as the official “mouthpiece” of the Communist Party
(CCP), has for the first time in history warned North Korea to refrain from
provocative statements and actions.29 Although China had seldom been
concerned with North Korea’s verbal threats in the past, these official
warnings naturally predisposed Beijing to change its foreign policy towards
Pyongyang.
Despite the top leaders’ frustration, China has never indicated the
possibility of a change in its policy towards North Korea. Instead, the CCP
was clever enough to immediately formulate its own principles to justify its
sanctions on North Korea and to dodge blame should it send a wrong
message to North Korea. According to these principles, the sanctions were
crucial for addressing North Korea’s behavior and its impact on the
situation. North Korea was perceived as: (1) threatening the security
environment in China’s northeastern region; (2) endangering China’s
“interest space” in the same region; (3) building capabilities for a direct
military attack on the United States, Japan and/or South Korea; and (4)
creating geopolitical conditions for Japan and South Korea to acquire
nuclear weapons.30 These principles were announced prior to the Chinese
official notice of imposing sanctions in April or in May. The notice was
handed down from the State Council to the relevant agencies such as the
Ministry of Transport on April 17, 2013.31 However, it was not until May
that the first alleged sanction measure was reportedly undertaken by the
Chinese authority on a North Korean bank known as “DPRK Foreign Trade
Bank.” The Chinese counterpart was the Bank of China. All financial
transactions between the two banks ceased operations by May 7, 2013.32
These principles, however, do not suggest a change in China’s policy
towards North Korea for two reasons. First, the timing and the source of the
announcement: it was announced a few days after the third nuclear test and
before the adoption of UN Resolution 2094 against North Korea’s third
nuclear test in March 2013. The source of the delivery to the public was the
Huanqiu Shibao (Global Times), a sister newspaper of Renmin Ribao.
Given its status as the political “mouthpiece” of the CCP, it is the only
valuable source open to the public for insight into the principles and the
official position of the CCP.33 Second, the principles were carefully drafted
to avoid antagonizing Pyongyang. While Beijing overtly states that the
motive is national interest-driven, it also tags an external prerequisite to the
root cause of its “independent” sanctions, such as no external attack on
North Korea, and no domino effects of nuclearization by other regional
states.
 Regarding the potential impact of North Korea’s nuclear test, Beijing’s
concerns stem from the northeastern provinces’ traumatic experience with
chemicals spilling into the Songhua River. The spillage came from both
external and domestic sources. The first contamination of the river was in
the 1960s from the explosion of a former Soviet chemical factory. A similar
incident happened in 2005 to a Chinese factory. Hence, Beijing is
concerned about possible radioactive pollution of the regions that are only
100 kilometres from the nuclear test site in North Korea. In sum, while
insisting that relevant agencies respect UN resolutions, China has pursued
its own course of sanctions based on its own predicament, principles and
major national interest. The recently announced principles reflect China’s
predicament and interests, and highlight the independent nature of Chinese
sanctions imposed on North Korea.
Chinese sanctions against North Korea, however, fail to confirm
speculations that they will lead to changes in China’s North Korean policy.
First, no official statement from CCP has carried such implications. An
official of the Central Communist Party School of China wrote an opinion
article in Financial Times in February 2013 to call for a change,34 whereas
an editorial by a leading Chinese newspaper simply denounced it as
“fantasy” and for being “extreme.”35 Second, China’s humanitarian aid has
not completely ceased, albeit with a temporary halt and a substantial
reduction in recent times.36 China’s principle is not to victimize non-
referent objects of the sanctions, i.e. the innocent subjects of the sanctioned
nations. Hence, Chinese punitive sanctions are aimed at those violating the
UN resolutions in North Korea and not the ordinary citizens of the country.
Third, as early as 2009, the CCP at the meeting of Central Foreign Affairs
Leading Small Group had already isolated the North Korean nuclear issue
from the stability and peace of the Korean Peninsula issue. Since then,
China has prioritized the goal of denuclearization of the Korean Peninsula
over the goal of keeping the peace and stability of the peninsula. However,
there is no indication of changes in terms of policy line.
Sustainability of the “special relationship” between China and
North Korea
As analyzed above, there will be no fundamental change in China’s policy
towards North Korea in the foreseeable future mainly because China’s
policy towards North Korea is buttressed by two factors. One is the 1961
Treaty of Friendship and Cooperation, which is the foundation of the
alliance relationship between the two countries. The other is the relationship
mechanism, which is unparalleled in the diplomatic practice between so-
called “normal” states. The diplomatic practice between China and North
Korea is conducted exclusively by the ruling parties of the respective
country. With these two factors, the bilateral relationship can only be
characterized as “special.”37
However, in recent times, there is growing speculation that China has
been striving to re-characterize the relationship as a “normal” state
relationship (i.e. normal state-to-state relations). This remains an illusion.
Many have wrongly believed that normal state-to-state relations will
completely take over the party-to-party relations. But this will not happen
until we witness the demise of the leadership of the communist parties in
both states. Never has the CCP claimed that its relations with the foreign
communist counterpart will be managed and conducted at the state level. As
long as the CCP reigns in China, it will adhere to the party-to-party
relations principle with its communist counterpart in North Korea.
From this perspective, the “special” aspect of the bilateral relationship
between China and North Korea will endure and persevere in the coming
years. It is for this reason that North Korea may be highly confident of
China’s alliance and support. Regardless of the circumstances, Pyongyang
and Beijing are well aware that a downturn in their relationship cannot
undermine their “traditional” ties to the extent of putting the party
relationship at risk. It would take the demise of the communist party ruling
in either one or both countries to shake their solidarity. The solidarity of the
party-to-party relations between China and North Korea was demonstrated
even at one of its nadir periods following China’s normalization of
relationship with South Korea in 1992. Contrary to conventional wisdom,
the alliance lasted because contacts at the party level were never suspended,
albeit at the governmental level.
 Many who were mistaken by the latter tend to negatively assess the
impact of China’s normalization with South Korea on China–North Korea
bilateral relations. Had this been the case, the alliance would have been
unsustainable, meaning that life support from Beijing to Pyongyang would
cease. To sustain this life support, for example, an extension of the
economic and technology cooperation agreement was granted in 1995 with
party officials in attendance. Other similar events and occasions were never
been put on hold because of the suspension of exchanges and contacts at the
governmental level. In this way, party contacts and exchange persevered in
the aftermath of China’s normalization with South Korea. Furthermore,
many mistook the 1999 announcement of the normalization of the
relationship between China and North Korea to be at the party level. On the
contrary, what the two countries meant was the relationship at the state
level. In fact, the party level relationship has never been interrupted by any
cause, external or internal.
Hence, the robust institutional and personal connection between China
and North Korea is the result of the solidarity of party relations. All the
military and party institutions involved are well-connected. Personal ties are
well-respected by party officials. Furthermore, the restoration of the
relationship in 1999 has led both the CCP and DPRK’s Labor Party to
endorse government-to-government relations. Against this background,
Pyongyang is confident of China’s loyalty and commitment to the alliance,
and vice-versa. It is also well aware that its provocative behavior should not
go beyond certain limits (“redline”). As long as Pyongyang has a legitimate
reason to protect itself from external threats, it will enjoy Beijing’s political
and security support.
To confirm its commitment to the alliance following the normalization of
relations with South Korea (a major adversary of North Korea), China has
long stipulated that it is obliged to use military intervention only if North
Korea suffers an attack or invasion.38 In this perspective, China’s siding
with the North on its provocations becomes more than a natural act. China
was bought, for example, by Pyongyang regarding its shelling of
Yeonpyeong Island on the grounds that South Korea’s live firing during the
military exercise landed in North Korean waters and maritime territories,
thereby subjecting the North to its “external” threat theory and justifying its
counteraction of shelling the island. Naturally, the North was able to garner
sympathy and support from China.39
Although the institutional ties are close and well-connected at both party
and military levels, China’s alliance with North Korea is expected to go
beyond verbal assurance and political commitment. The noteworthy aspect
of the military alliance is the absence of joint military exercise between the
two countries. Moreover, China has constantly refused to conduct any sort
of defense activity with North Korea since the early 1990s. The latest
demand for procurement of Chinese defense by North Korea came during
high-level North Korean visits to China: Kim Jong-Il’s visit to China in
2010 and two separate visits in 2009 made by the naval chief of staff and
the air force chief of staff. The absence of hardware connection in the
military aspect of the alliance does not affect the solidarity of personal
connections, institutional ties and personnel exchange.
High-ranking officials of the party engage on a regular basis with the
military officials from both countries. These occasions include CCP Central
Liaison Office director’s visit in the start of the year, “Victory Day” of the
Korean War, commemoration of the alliance, commemoration of the
intervention of the War, and New Year celebration in their respective
capitals. More importantly, their visits are reciprocal. Although in the era of
Kim Jung Il, his number of visits to China was not always matched by his
Chinese counterpart, however, the courtesy was always returned by high-
ranking officials (i.e. standing members in the politburo of the CCP).
Simultaneously, Kim’s visits to China and reception of high-ranking
Chinese party officials were always accompanied by a similar group of
personnel from his party and military. Some would accompany him for a
number of consecutive years and are replaced by others who in turn were
replaced by those they had replaced. It may have been for tactical reasons
due to Kim’s concern about their overexposure to China’s success and
growing ties with their Chinese counterparts.
Over time, North Korea’s party officials and military generals developed
a strong bond with their Chinese counterparts. Through this network of
personal relations, North Korea was able to successfully garner much
needed economic assistance and humanitarian aid from China, though the
“special relationship” factor cannot be discounted. Kim Jong Un, after
having inherited the leadership from his late father in December 2011, has,
at least in the first year of his reign, kept these officials in the party and in
the military. It was a logical choice for Kim Jong Un at the time because he
lacked personal ties to the Chinese and the CCP. Jang Song Taek, Kim Jong
Gak, Li Yong Ho and Kim Yong Chun, to name a few, were the politburo
standing members of the Rodong (Labor) Party and top-ranking military
generals in the first year of Kim Jong Un’s government. They were once the
core group of officials that accompanied Kim Jong Il when he visited
China, and when he received Chinese delegations in Pyongyang from 1999
to 2011.
However, in April 2013, Kim Jung Un reshuffled the standing members
in the politburo and added new faces like Choi Ryong Hae and Park Bong
Ju, removing everybody but Jang Song Taek. Choi Ryong Hae is no
stranger to Beijing as he was part of Kim Jong-Il’s delegation to China in
2010 and 2011. Jang Song Taek, a brother-in-law of Kim Jong-Il, is well-
respected and liked by the CCP. He has been a low-profile, frequent traveler
to many parts of China. Hence, through these three main figures, Kim Jong-
Un’s regime is relatively well-connected to Beijing.
In the military, some generals who served in the Military Commission
and Central Military Commission (CMC) under the Party are still active.
They include O Kuk Ryol, Kim Jong Gak, Joo Kyu Chang and Ri Myong
Su in the Military Commission, and Hyon Chol Hae, Kim Jong Gak, and Ri
Myong Su in the CMC. Jang Song Taek joined these military commissions
in the later years of Kim Jong-Il’s reign and rose to the deputy level. The
appointment of Jang Song Taek to lead economic cooperation matters and
Choi Ryong Hae, political and diplomatic matters, indicate Pyongyang’s
awareness of Beijing’s respect for its country. These officers serve as North
Korea’s functioning China window, despite futile attempts in recent times.
Regardless of how unsuccessful their engagement with Beijing has been,
they are still well-received by Beijing. For example, during difficult times,
Choi was suddenly dispatched as a special envoy to Beijing in May.

Implications of China’s rise for North Korea

Growth of China’s power capabilities has created contradictions in its
dealings with Pyongyang. China’s economic success has elevated Beijing to
the role of critical benefactor of the Pyongyang regime; yet Beijing claims
that it cannot influence Pyongyang to serve its interests or the interests of
countries near the Korean Peninsula. China’s reasoning is simple: Beijing
lacks both will and power to change North Korea’s behavior. First, China’s
stance exhibits the absence of will because of its long-standing commitment
to abide by one of its core and long-standing diplomatic principles (i.e.
“non-interference in one’s domestic affairs”) from the “Five Principles of
Peaceful Co-existence.” Second, it does not conceive itself to have the
power to change the outcomes of North Korea’s provocative behavior.
Since its foundation in 1949, China and the CCP have never been
successful in dealing with another country’s provocations. Neither do they
foresee an opportunity to prevent such provocations. One salient example is
the North’s invasion in the Korean War in 1950, despite its prior
consultation with both North Korea and the former Soviet Union.
Furthermore, they have seldom publicly condemned North Korea for its
belligerent and violent behavior. Third, China needs a peaceful and stable
international environment on its borders, and therefore, is in dire pursuit of
the status quo. As long as the status quo is preserved, Beijing will perceive
the situation as peaceful and stable. This is well-documented in the
country’s Diplomatic White Paper. It defines the status quo as a peaceful
and stable situation in which there is no crisis and no provocation caused by
violent measures. If tension escalates with devastating consequences, the
situation is perceived as unstable and tense.
Against this background, North Korea is well-aware of China’s tolerance
limits for its pushing the envelope and getting away with it. The threshold
for North Korea’s provocations lies in the equilibrium of the status quo. As
long as the status quo is not broken, North Korea knows it can get away
with it. It can also be attributed to the way it is carried out, that is without
early warnings but in a discrete manner. Hence, China can only remain as a
bystander without prior knowledge of the advent of the provocation. It can
be influential only if it can prevent the recurrence of provocations by North
Korea. This is, however, where China often fails and is criticized for “not
doing enough” to stop North Korea’s provocative and precarious acts.
China has realized through its own experience that one of the best ways
to change one’s behavior requires a cognitive change in one’s perception of
the predicament. In the case of North Korea, China sees the answer in North
Korea following in the footsteps of Chinese economic reforms and opening
to the outside world. To achieve this end, it has strived to persuade and
convince North Korea on numerous occasions since the normalization of
the bilateral relationship in 1999. Beijing has proactively attempted to
influence the top officials including Kim Jong-Il during their visits to
China. As a result, there have been some positive indications since 2010.
In early 2010, the central theme of the bilateral relationship was nothing
but economics. Economic cooperation gained momentum and peaked
during Kim Jong-Il’s second visit to China in the same year. He publicly
declared that he would “positively consider” China’s demand for economic
reform and the opening up of his country. Upon his return, Kim Jong-Il
designated an area off the mouth of the Yalu River (Hwangguempyong)
along with Wihwa islands as a joint free trade area. He also accelerated the
opening of the special economic zones of Rajin and Sonbong. The two
countries established the Rajin-Sonbong Management Committee along
with Hwangguempyong Management Committee in the fall of the same
year to handle the planning, construction and development of the regions.
The two Committees would meet with representatives from respective
countries, and by August 2012, they have already held three rounds of
negotiations and discussion.
Beijing was impressed with Pyongyang’s efforts on the passing of Kim
Jong-Il. It was convinced that North Korea genuinely aspired to economic
reform. North Korea would comply with Beijing’s demands with much
effort and sincerity. Beijing demanded North Korea implement institutional
and administrative reform measures, including legislating a new
constitution, as well as formulating laws and rules to set up new
administrative apparatuses and agencies.40 China decided to create a so-
called “North Korea Fund” whereby the Chinese government and the China
National Development Bank and Chinese businessmen would jointly invest
US$3 billion. Beijing also showed confidence in Pyongyang’s effort when it
appointed its Commerce Minister Chen Deming to take the lead in
negotiations with the North Korean team headed by Jang Song Taek.
Furthermore, Minister Chen held an internal meeting with the Chinese
businessmen who were active in North Korea in order to understand their
needs and secure success.
During their third Management Committee meeting in Beijing (August
2012), China expressed its dissatisfaction when North Korea failed to meet
the demands presented at the second meeting. China had expected North
Korea to carry out reform by delivering more concrete and specific
measures (mostly institution-related measures).41 However, North Korea
failed to meet China’s expectations and the meeting was called off
indefinitely. Since then, the talks for economic cooperation between the two
countries have stalled and China seemed compelled to feel it had been
disappointed once again.
China can play a role to advance reforms in North Korea in three areas.
First, it can help North Korea to come out of isolation and integrate with the
world community. If this happens, North Korea can become a more pacifist
state. Second, China’s grandiose plan to “rejuvenate China’s northeastern
regions” in 2004 fell apart because of the North Korean factor in terms of
security and geo-economics. North Korea’s prevailing inconsistent reforms
and continuous militant behavior failed to secure an environment conducive
for the plan. Until now, China is denied access to ports and ocean routes
east of North Korea and its northeastern provinces are vulnerable to North
Korea’s belligerent behavior. Third, Beijing can put to an end to North
Korea’s aspiration for becoming a nuclear weapons state. Opening up North
Korea and facilitating its integration into the international community will
raise North Korea’s confidence and trust in the neighboring states. In other
words, such effects of a “democratic peace” can spill-over to North Korea’s
security outlook and perception.

Conclusion
China’s rise is creating dilemmas in Asia with potentially unknown
consequences. While it is still perceived as a potential threat to the security
interests of peripheral states, with its new power capabilities, it is also
forced by Beijing to undergo a transformation to keep the status quo and
preserve the current power structure. In either way, the consequences of
China’s rise are alarming to the neighboring states. Based on the
observation of China’s recent pattern of behavior, it is safe to assume that it
will take some time for China to practice normal diplomacy and pursue its
interests in accordance with the international norms.
The main cause of such awkward Chinese behavior is that Beijing does
not seem to know how to behave given its current status and growing
capabilities. It seems that China needs time to learn to practice diplomacy in
accordance with international norms. It will need time to learn to woo North
Korea, a long-secluded state, out of seclusion. China was isolated and
voluntarily came out of isolation. To come out of seclusion, North Korea
will require an environment conducive to reform. Beijing cannot rely on
giving persistent instructions that are perceived by North Korea as assertive
and demanding. Hence, Beijing will have to find a more effective way of
wooing Pyongyang out of seclusion. Indeed, one serious factor that China
has to take into account is the fundamental difference between the notion of
isolation and the notion of seclusion.
On the normative front of diplomatic practice, China has enjoyed much
success in conforming to international norms in its diplomacy. However, it
will have to make more effort to embrace perceptions that are shared by
many. Often it seems that China is not on the same page with the rest when
it comes to sharing perceptions and concepts; it tends to rely on its own
interpretation. China will have to try harder to be on the same page with
South Korea, for the latter is on the same page with the rest of the world. To
realize this end, China’s perception needs to be guided by the values that
are fundamentally shared by the rest of the world.

Notes
1 According to a survey in South Korea at that time, 58.2 percent of the respondents expressed
their dislike for China. KBS http://find.joins.com/joinsdb_content_f.asp?id=DY012004091425,
accessed December 22, 2006.
2 Andrew Kohult et al., America’s Global Image Remains More Positive than China’s, July 18,
2013, www.pewglobal.org/files/2013/07/Pew-Research-Global-Attitudes-Project-Balance-of-
Power-Report-FINAL-July-18-2013.pdf, accessed January 10, 2014, p. 24.
3 Chinese Foreign Ministry Spokesperson’s Press Briefing, April 20, 2010,
www.fmprc.gov.cn/chn/pds/wjdt/fyrbt/t683586.htm, accessed April 23, 2010.
4 Chinese Foreign Ministry Spokesperson’s Press Briefing, May 20, 2010,
www.fmprc.gov.cn/chn/pds/wjdt/fyrbt/default_3.htm, accessed May 22, 2010.
5 Chinese Foreign Ministry Spokesperson’s Press Briefing, May 4, 2010,
www.fmprc.gov.cn/chn/pds/wjdt/fyrbt/t689720.htm, accessed May 7, 2010.
6 Sung-Ryeol Cho, “Post-Cheonan Northeast Asia and the future,” Talk delivered on June 10,
2010 at the Peace Foundation, Seoul, Korea. Full text is available at
www.inss.re.kr/app/board/view.act;jsessionid=C525BFD149016C47C9BCD7572DEBA17D?
metaCode=s_intr_ac&boardId=3157d5cd2a0f69c434c1fd83, accessed July 2, 2010.
7 Zhongguo Xinwen Zhoukan [News China Weekly], June 21, 2010, p. 27.
 8 It was originally slated to begin on June 8. However, it was postponed for an indefinite period of
time after China’s fervent opposition and condemnation of the announcement. “U.S. to join
South Korean military exercise off North Korea Coast,” ABC News, June 2, 2010.
9 Xinhuanet, June 6, 2010, http://news.xinhuanet.com/world/2010–;07/06/c_12305072.htm,
accessed June 7, 2010; Yonhap News, July 7, 2010.
10 The Dong-AIlbo, July 7, 2010.
11 Zhongguo Xinwenwang [Sina News], August 19, 2010,
http://mil.news.sina.com.cn/2010–;08–;19/0723606785.html, accessed August 20, 2010.
12 Chinese Foreign Ministry Spokesperson’s Press Briefing, August 6, 2010,
www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/dhdw/t722290.htm, accessed August 10, 2010.
13 Chinese Foreign Ministry Spokesperson’s Press Briefing, July 8, 2010,
www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/jzhsl/t714888.htm, accessed July 11, 2010, and July 13,
2010, www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/jzhsl/t716403.htm, accessed July 16, 2010.
14 China’s claim on “regular” exercise is questionable. It is noteworthy that in the past, Shandong
and Shenyang Military Regions (junqu) have conducted joint military drills, yet they are far
from being regular. Regular military exercises are often given specific names. The one that
China conducted in late June of 2010 as a countermeasure exercise was anonymous, implying
how impromptu it was.
15 Chinese Foreign Ministry Spokesperson’s Press Briefing, July 6, 2010,
www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/jzhsl/t714332.htm and June 29 and June 29, 2010,
www.fmprc.gov.cn/chn/gxh/tyb/fyrbt/jzhsl/t712549.htm, accessed July 9, 2010.
16 World Economic Forum, China and the World: Scenario to 2025, (Geneva, Switzerland: World
Economic Forum, 2006); Charles Wolf, Jr., Siddhartha Dalal, Julie DaVanzo et al., China and
India, 2025: A Comprehensive Assessment, (Santa Monica, CA: RAND Corporation, 2011); The
World Bank, Development Research Center of the State Council, the People’s Republic of
China, China 2030: Building a Modern, Harmonious, and Creative Society, (Washington, D.C.:
The World Bank, 2013). On the military front, see Department of Defense, Quadrennial Defense
Review Report, (Washington, D.C.: Department of Defense, February 2010); Department of
Defense, Nuclear Posture Review Report, (Washington, D.C.: Department of Defense, April
2010); The White House, National Security Strategy, (Washington, D.C.: The White House,
May 2010); and Michael D. Swaine, Mike M. Mochizuki, Michael L. Brown et al., China’s
Military and the US-Japan Alliance in 2030: A Strategic Net Assessment, (Washington, D.C.:
Carnegie Endowment for International Peace, 2013).
17 Kohult et al., America’s Global Image Remains More Positive than China’s.
18 Ibid, p. 24.
19 Ibid., p. 31.
20 “Negative perception on North Korea growing . . . 16.4% see it as an adversary,” News1, August
9, 2013.
21 Ji-yoon Kim et al., “Koreans’ changing perception of neighboring states in 2013: Favorability in
their perception of the US, China, Japan, and North Korea and assessment on international
relations,” Issue Brief, No. 83, (Seoul: Asean Institute for Policy Studies, December 26, 2013),
p. 5.
22 “Sixty-two percent called for more assistance to North Korea in case of the unification, none of
the US, China, Japan, and Russia will want the unification, 51% responded,” ChosunIlbo,
 January 1, 2014.
23 “Diminishing hopes on unification . . . 33% in their 20s, ascertain of no unification,” Dong-A
Ilbo, April 1, 2013.
24 “Forty-one percent of the public sees China as the most threatening future state,” SegyeIlbo,
October 5, 2012.
25 Hyundai Economic Research Institute, “Unification consensus and needs survey,” VIP Report,
Vol. 13, No. 38, November 18, 2013, p. 5.
26 “Forty-one percent of the public sees China as the most threatening future state,” SegyeIlbo.
27 “Threatening state to our national security in 10 years,” SeyeIlbo, October 25, 2012.
28 Joseph Khan, “China, angered, takes hard line with North,” New York Times, October 10, 2006,
www.nytimes.com/2006/10/10/world/asia/10iht-china.3097004.html?_r=0, accessed October 11,
2006.
29 Shelun (Editorial), “Qieshituidongbandaojushizhuanhuan” (Effectively promote easing the
situation on the Korean Peninsula), Renmin Ribao (People’s Daily), April 15, 2013. The first
ever warning from a Chinese official in response to North Korea’s verbal threat had preceded
the official remarks immediately following the third nuclear test on February 12, 2013. Then
Foreign Minister Yang Jieche alerted North Korea “to refrain from any words and actions that
may further worsen the situation and return to the right track of dialogue and consultation at an
early date.” “China ‘firmly’ opposes DPRK’s nuclear test: Yang summons ambassador,” Xinhua,
February 12, 2013.
30 Editorial (Sheping), “Chaohe, zhongguoxubuqienuobuhuanxiangbujizao” (North Korea’s
nuclear, China does not need to be timid, illusive and irritable), Huanqiushibao (Global Times),
February 17, 2013.
31 Ministry of Transportation Notification, “On the notice of implementing UN Resolution No.
2094 (Guanyuzhixinglianheguoanlihui di2094hao jueyi de tongzhi),” April 17, 2013
www.moc.gov.cn/zizhan/siju/guojisi/duobianhezuo/guojiheyue/duobiantiaoyue/201304/t201304
25_1402013.html (posted on April 25, 2013), accessed May 2, 2013.
32 “China reduces banking lifeline to N. Korea,” Financial Times, May 7, 2013,
www.ft.com/cms/s/0/a7154272-b702-11e2-a249-00144feabdc0.html, accessed May 9, 2013.
33 For an in-depth analysis on the editorial analyses of the Chinese newspaper, see Jaewoo Choo,
“China’s frustration over North Korea: editorial analysis, December 2012–April 2013,” Korea
Journal of Security Analysis, (forthcoming August 2013).
34 Deng Yuwen, “China should Abandon North Korea,” Financial Times, February 27, 2013.
35 Editorial (Sheping), “ ‘Fangqichaoxian’ de zhuzhangguoyuhuanwei he jiduan” (“Abandonment
of North Korea” argument excessive fantasy and extremist), Huanqiushibao (Global Times),
April 12, 2013.
36 Beijing’s Brand Ambassador: A Conversation with Cui Tiankai,” Foreign Affairs, May, 2013.
37 The notion of “special relationship” was reconfirmed and reaffirmed during a recent visit by a
high-ranking official from the CCP to North Korea on July 25, 2013.
38 In line with this view, a similar argument is well-presented in a Chinese article by Shen Jiru. See
Shen Jiru, “An urgent matter in order to maintain security in Northeast Asia: How to stop the
dangerous games in North Korea’s nuclear crisis (Weihu Dongbeiya Anquan de Dangwuzhi Jin:
Zhizhi Chaoxian Hewentishangde Weixian Boyi”), World Economics and Politics (Shijie
 Jingjiyu Zhengzhi), No. 9, 2003, p. 57. Such a view was also confirmed by the author’s
interview with Chinese North Korean experts, January 22–February 3, 2007, also published in
the author’s report “Changes in China’s Policy toward North Korea and Economic Assistance,”
submitted on March 31, 2007, to the National Intelligence Commission at the Korea National
Assembly.
39 Kevin Shepard, “Northeast Asian Regional Security after the Cheonan Incident: A North Korean
Perspective,” paper presented at the Asean Institute for Policy Studies Symposium on Post-
Cheonan Regional Security, August 13, 2010, Seoul, Korea; Zhu Feng, “Cheonan Impact,
China’s Response, and the Future of Northeast Asian Security,” Strategy Studies 49, July, 2010,
pp. 68–83; and Park Hong-Seo, “Dilemma of the U.S. and China by the sinking of Cheonan,”
Current Issues [in Korean], No. 163, May 2010,
http://knsi.org/~knsiorg/knsi/admin/work/works/KNSIiss163_phs100503_1.pdf, accessed July
5, 2012.
40 “Sino-N. Korea economic zones in ‘essential’ stage” (Zhongchao jingji maoyiqu jinru shijixing
kaifa jiedua), China.org.cn, September 7, 2012, www.china.org.cn/chinese.2012-
09/07/content26459076.htm, accessed August 28, 2013).
41 “China and North Korea establishes ‘two economic zones’ management committee”
(Zhongchao chengli “liang ge jingjiqu” guanlihui), Dongfang zaobao (Dongfang Daily), August
15, 2012.
13 The rise of China and Japan’s
foreign policy reorientation
Ken Jimbo

Introduction
Japan–China bilateral relations are experiencing a historical turning point. In
2010, China surpassed Japan’s nominal GDP and became the world’s
second-largest economy. Japan–China economic interdependence has
deepened at an unprecedented level as shown by vibrant private sector trade,
investment and the dramatically increasing people-to-people exchange
between the two countries. As the two largest economies in Asia, both
governments have upgraded bilateral relations to promote a “mutually
beneficial relationship based on common strategic interests” in May 2008
with a recognition that the Japan–China relationship is “one of the most
important bilateral relationships for each of two countries.”1
Despite shared recognition to expand their economic relations, Japan–
China strategic rivalry and competition have recently become acute and less
conciliatory. As the growth of Chinese power becomes the irreversible trend,
Japan’s perception of the relative bilateral superiority to China has
dramatically waned. With Japan’s security concerns over China’s “assertive”
maritime activities Japan–China relations fall more frequently into tensions
and distrust over defense and security policies, history recognitions, disputes
and claims over the East China Sea gas fields and Senkaku/Diaoyu Islands.2
Bilateral tensions over the fishing boat collision incident in September 2010
have proven that there were few mechanisms for crisis management and
escalation control between Tokyo and Beijing.
 Throughout the postwar period, Japan’s China policy rested on the
premise that Japan’s economy and military capabilties were far superior to
those of China. Japan’s search for commercial liberalism—a prosperous
China would eventually become friendly to Japan—was manifested by a
proactive investment strategy by Japan’s private sectors, as well as by the
provision of the Official Development Assistance (ODA) since the 1970s.
With the end of the Cold War and the rise of China in the early 1990s, Japan
gradually shifted its China policy towards reluctant realism (Michael J.
Green), which involves responding to China’s growing military power by
pursuing internal and external balancing.3 However, these policy shifts were
also associated under Japan’s relative superiority over China throughout
1990s and until recently.
The shift of relative bilateral power superiority from Japan to China
creates bilateral relations, for the first time in modern history, where Chinese
GDP is constantly larger than that of Japan, and the gap is rapidly widening.
This economic power shift has already begun to spill over to military and
foreign policy dimensions. In particular, the strengthening of air and naval
power as well as missile capabilities is strengthening China’s anti-access
capabilities with regard to areas where China’s core interests are involved,
while also expanding its area denial capabilities in theaters where U.S.
forward-deployed forces previously had uncontested supremacy. With the
recent upgrading of the People’s Liberation Army (PLA) and maritime law-
enforcement capabilities, China assertively displayed a greater voice and
influence over its territorial claims including over Senkaku/Diaoyu Islands
in East China Sea. China is coming to possess the ability to wield physical
veto power according to its own preferences. With the rise of China’s
political influence, it has already become highly difficult for Japan to form
and execute its foreign policy without giving China’s intentions due
consideration.
Thus, the dynamic power shift in Japan–China relations has made the old-
fashioned management of bilateral relations utterly obsolete. Japan is in
search of a new foreign policy orientation towards the rise of China. In
calibrating Japan’s foreign and security policy reorientation in view of the
rise in Chinese power, this chapter mainly focuses on the following
questions and agendas.
1 Dynamics of distribution of power: What are the scale and pace of the
changing balance of power in Japan–China relations in the past, present
and future? How does this change make a difference in Japan’s strategic
profile?
2 Japan’s foreign policy discourse: What are emerging trends and
benchmark issues in the last 5–7 years regarding growing Chinese
power? What are the main policy options that Japan is pursuing to
strengthen its bargaining position towards the growth of Chinese
power? How does Japan reconcile the need to enhance the balancing
strategy while simultaneously promoting deeper economic
interdependence?
3 Japan’s evolving defense policy: What have been the major defense
policy shifts in the latest National Defense Policy Guidelines (NDPG)?
How effectively do the NDPG and Mid-term Defense Program (2011–
2015) address the growth of Chinese military power? How have the
Japan–U.S. alliance and U.S. strategic rebalancing to Asia contributed
to the military dimension of Japan–China relations and the bargaining
position of Tokyo?

Japan–China power distribution outlook towards 2030

Japan–China economic outlook towards 2030

The debates on the power shift and power transition, along with their
application to the future U.S.–China relation have attracted many scholars in
recent years. The central puzzle within these debates are, as Chinese power
approaches the level of the U.S., whether intensified rivalry and security
competition between the U.S. and China is inevitable, and whether
cooperation will be hard to sustain.4 While the U.S.–China power transition
remains to be the most important structural factor in future Asia-Pacific
security, it is also important to look at the power shift and power transition in
the sub-system in the region, most notably Japan–China relations, and also
between Japan and the rest of Asia. Indeed, as of 2010, the power shift is a
more conspicuous reality in Japan–China than U.S.–China relations.
 In 1990, China’s GDP at US$390.3 billion was only 12.6 percent of
Japan’s GDP of US$3,103.699 (nominal, current prices). However, China’s
GDP began to rapidly close the gap by becoming 13.6 percent in 1995, 27.0
percent in 2000, 49.4 percent in 2005, then exceeding Japan’s GDP by 108
percent (Japan: 5,488.6/China: 5,930.4) in 2010; see Figure 13.1.5 The
current growth trend suggests that the gap is rapidly widening as China
maintains relative high growth while Japan remains in the economic
stagnation. The IMF World Economic Outlook suggests that Chinese GDP
versus Japan’s GDP will be 172.8 percent in 2015, while the Tokyo
Foundation’s estimate further goes on as becoming 234.6 percent in 2020,
325.4 percent in 2025, and 445.8 percent in 2030 respectively. Conversely,
Japan’s GDP versus Chinese GDP will shrink to 22.4 percent in 2030.6
As the data in Table 13.1 indicate, in 2010 China surpassed Japan’s
economy. If the linear predictions hold true, by end of this decade China’s
GDP would be more than double that of Japan, and by 2030 the latter’s
economy will amount to only 23 per cent of the former; a far cry from the
heyday of Japan as the economic giant of Asia. Similarly, the prevailing
economic indicators suggest China would surpass the U.S. by around 2025
to become the world’s largest economy.
Figure 13.1 Japan–China trade and Japan–US trade volumes (actual value) (JPY trillion) (source:
illustrated Japan–China trade and Japan–US trade over time
(http://www2.ttcn.ne.jp/honkawa/5050.html)).

Table 13.1 Nominal GDP of Japan, China and United States, 2010–2030 (2011 US$/billion current
price (estimates))

Source: Tokyo Foundation Asia Security Project (modified).

Notes
Assumption A: High per capita GDP states: Japan, U.S., Australia and Singapore will maintain
average nominal growth rate of 2011–2016 until 2020.
Assumption B: High per capita GDP states’ 2020–2030 projection is based on the GS 2007 data that
provides projection data of every 5 years (modified by the margins of error between GS 2007 and
IMF/WEF 2011*).
Assumption C: Emerging states: China, Korea and ASEAN5* (IMF definition of ASEAN5 includes
Indonesia, Malaysia, Thailand, Philippines and Vietnam) corresponds with the average growth rate
of 2011–2016 but adjusted to the rate GS 2007 provides every 5 years.

These emerging economic trends also changed Japan’s trade relationships.

As shown in Figure 13.1, for example, Japan–U.S. trade (total imports and
exports) in 1990 amounted to 20.6 trillion yen while Japan–China trade was
4.8 trillion yen. The volume of Japan–U.S. trade was five times larger than
that of Japan– China trade. However, 14 years later in 2004, trade statistics
show that Japan– U.S. trade at 20.5 trillion yen and Japan–China trade at
22.2 trillion yen had reversed positions. Although some effects from the
Lehman shock in 2009 are apparent, it is evident that where the amount of
trade between Japan and the U.S. stayed flat up to 2008, the amount of trade
between Japan and China was rising steadily. China expanded in scale at a
rapid pace even just in terms of the economic relationship with Japan.
Military dimension of Japan–China 2030 projection
How does this future economic outlook translate into the security and
military dimension of power shifts in Japan–China relations? One helpful
indicator might be comparing the size of military spending of both nations.
If the current level of military spending as a share of GDP continues to
prevail in the future, the nominal GDP projection also implies how much
these countries can spend in the military domain. Needless to say, military
spending is only one among various indicators of military power. The figure
to be mentioned only represents the power of budgetary expenditure towards
the military sector. However, as advanced military equipment and
technologies are procured in the international markets, the military spending
may proportionally correspond with the level of hardware procurements.
In calculating the future trends of the military spending, the Tokyo
Foundation’s study referred to the data sets of the Stockholm International
Peace Research Institute (SIPRI). As a presumption, this study adopted the
percentage Nominal GDP of Japan, China and United States, 2010–2030
(2011 US$/billion current price (estimates)) of GDP of military spending in
2010 – Japan (1.0 percent), China (2.1 percent), and U.S. (4.8 percent). The
study also included two alternative scenarios for China and the U.S.7 Since
the U.S. Department of Defense estimates the real size of China’s defense
budget is approximately 1.4 times larger than SIPRI data, it included China’s
high-estimate path, adding 40 percent to SIPRI standards. Another
alternative includes U.S. defense budget cuts. As the U.S. federal budget is
facing increasingly severe constraints, the growth rate of the U.S. military
budget will be reduced significantly towards 2020. Therefore, the study also
adopted the alternative scenario in which the U.S. defense budget goes down
to 3.0 percent—roughly at the level of FY1999—as the percentage of GDP.
As seen in Table 13.2, the 2010–2030 projection of military spending
manifests in drastic form in Japan–China relations. China’s national defense
spending is rising beyond Japan’s defense expenditures at a rapid rate, and
the bilateral military balance between Japan and China is expected to tip
over to a state of overwhelming ascendancy on the part of China. Chinese
defense spending will be 4.9 times (6.9 times in high-estimate) larger than
that of Japan’s in 2020 and 9.4 times (13.1 times) larger in 2030. In the
coming era Japan will find it increasingly difficult to deal with China’s
military rise by its own defense efforts.
 Moreover, the U.S.–China dimension of this figure suggests that China’s
defense budget based on SIPRI data will reach a level close to the U.S. (3.0
percent) and possibly exceed it if China’s real budget is on the high-
estimated path in 2030. The simulation suggests, modestly, that U.S. military
supremacy will be significantly contested by the rise of Chinese military
power. This also suggests that U.S.–Japan alliance vis-à-vis China would not
be taken for granted as a security regime of uncontested supremacy in
coming decades.

Table 13.2 Military spending of Japan, China and United States, 2010–2030 (2010 US$/million)

Source: The Tokyo Foundation Asia Security Project (modified).

Notes
Using data sets of the Stockholm International Peace Research Institute (SIPRI). Selecting countries
from Asia-Pacific region and comparing data based on constant U.S. dollars as of 2009.
Basic assumption: percentage of GDP allocated for Military Expenditure in 2009 will be maintained
till 2030.
Assumption on China (1): It is widely recognized that Chinese official defense budget announcement
(Chinese Yuan) did not conform to international standards. SIPRI has estimated that the real budget
is 150–160 percent of the Chinese official announcement.
Assumption on China (2): U.S. DOD claims that SIPRI even underestimates the Chinese military
budget. U.S. Department of Defense, Military and Security Developments involving the People’s
Republic of China (August 2010) estimates Chinese military counts up to more than US$ 150
billion (SIPRI 140 percent added). Considering these views, this study also indicates High
Estimation Path by adding 140 percent of the SIPRI standards.
Assumption on U.S.: The United States has announced major steps to reduce military expenditure due
to severe fiscal pressure on the federal budget. This study also considers the rate if U.S. takes steps
to reduce budget to level of Clinton Administration in 1999 (3.0 percent), shown as Low Estimate
Path.
Whether China in or China out? Japan’s foreign policy
discourse

Trends of foreign policy discourse: 2006–2012

Since Prime Minister Junichiro Koizumi (April 2001–September 2006) left
office, the politics of Japan has fallen into a deep malaise. From September
2006 until December 2012 (6 years and 4 months), Japan had 7 Prime
Ministers, 12 Foreign Ministers and 14 Defense Ministers. Some analysts
ironically characterized this trend as a ‘Japanese revolving door system’ as
the average timeframe of a Prime Minister’s survival was less than a year
during this period.8
When Shinzo Abe was handed the LDP leadership in 2006, the Liberal
Democratic Party (LDP) dominated the lower house with 296 seats inherited
from Koizumi’s miraculous triumph in the general election in September
2005. Yet the LDP’s downfall began during the first Abe administration
when the LDP and its coalition lost their majority in the House of Councilors
(Upper House) after the July 2007 election. Since then the “twisted Diet,”
where the ruling party does not have a majority in the Upper House, has
constantly plagued Japan’s legislative process, leading to a long-term
gridlock and deficiencies in key decision making. Succeeding Prime
Ministers, Yasuo Fukuda and Taro Aso were unable to find a breakthrough,
thus alloowing the historical loss in the general election in September 2009.
The victory by the Democratic Party of Japan (DPJ) brought an end of
more than half a century of almost uninterrupted rule by the LDP.9 Despite
the high rate of support by the public, the DPJ was unable to capitalize on
the political sustainability. Prime Minister Yukio Hatoyama stepped down
from office eight months after his inauguration, due to the mishandling of
U.S.–Japan security relations over the U.S. Marine relocation issues in
Okinawa. His successor Naoto Kan stayed for 16 months but the public
support and confidence towards the DPJ administration deteriorated,
especially after the Great Earthquake in March 2011. With the decision to
dissolve the lower house by his successor Yoshihiko Noda in December
2012, the DPJ allowed the LDP a landslide victory to regain the power in the
general election.
 With such a low survival rate of top leaders in the past six years, it is very
difficult to generalize about the foreign policy discourse in the Japanese
government. Indeed, concepts and slogans for Japan’s diplomacy proposed
by Prime Ministers and Foreign Ministers popped up once, and were then
replaced by another sequentially. Records of major foreign policy initiatives
include: the Value-Oriented Diplomacy/the Arc of Freedom and Prosperity
(by FM Taro Aso, October 2005–August 2007), the Resonant Diplomacy (by
PM Yasuo Fukuda, September 2007–September 2008), the promotion of the
East Asia Community (PM Yukio Hatoyama, September 2009–May 2010),
the Economic Diplomacy (FM Seiji Maehara, September 2010–March
2011), the Network Diplomacy (by FM Koichiro Genba, September 2011–
December 2012), and Asia’s Security Diamond (by PM Shinzo Abe,
December 2012–present).
Does this seemingly whack-a-mole foreign policy discourse only suggest
that there are deep confusions and inconsistencies in Japan’s diplomacy? In
responding to this question, finding the explanatory variable for the
fluctuation of diplomatic concepts other than Japan’s domestic political
instability is necessary. Indeed, it was Japan’s unfounded China policy that
has been showcasing the poor consistency of its foreign policy discourse. It
becomes clearer by introducing quadrant of the coordinate axis of Japan’s
foreign policy emphasis in the past six years between China and the U.S.
The horizontal axis represents “China-In” (Japan’s diplomacy regards China
as an equal-footing strategic partner) and “China-Out” (Japan regards
forming the regional order without China, or regards China as second-layer
actor), and the vertical axis represents “Strong U.S. Commitment” and
“Weak U.S. Commitment.” By plotting the milestones of Japan’s foreign
policy concepts, one can find a U-shaped swing figure (see Figure 13.2).
In particular, there is a deep crevasse, either conscious or unconscious, in
Japan’s diplomatic community as to whether to regard China as an insider or
outsider of the regional order in East Asia or Asia-Pacific. During the first
Shinzo Abe administration, the concept of Value-Oriented Diplomacy
explicitly declared the preference of coalition among democracies as its
diplomatic profile, and China was merely mentioned in its concept. The
following Yasuo Fukuda administration avoided inheriting the concept of
Value-oriented Diplomacy and conceptualized his policy as Resonant
Diplomacy, which implied that Japan prefers the co-existence of strategic
relations with the U.S. and with China that should not be mutually exclusive.
It then created the foundation for President Hu Jingtao’s visit to Japan and
the Japan–China Joint Statement on “Mutually Beneficial Relationship
Based on Common Strategic Interests.” After the historical victory of the
Democratic Party of Japan (DPJ) at the general election in September 2009,
Prime Minister Yukio Hatoyama assumed office with his own diplomatic
concept of East Asia Community. He even mentioned that Japan should
distance itself from the United States and tilt more towards Asia. However,
the fishery boat collision incident off the coast of Senkaku Islands in
September 2010 has drastically changed Japan’s perception of China, which
led the following two administrations to pursue Network Diplomacy in Asia
with more emphasis on collective soft balancing towards China. Since the
LDP got back into power in the general election of December 2012, the
second Shinzo Abe administration began to resume its Value-oriented
diplomacy with more emphasis on maritime democracy coalition.

Figure 13.2 Flow of Japan’s diplomatic concepts in 2006–2012.

Phase I (China out) 2006–2007

Value-oriented diplomacy/the arc of freedom and prosperity

On November 30, 2006, then Foreign Minister Taro Aso launched two new
foreign policy concepts in his public speech, namely “value-oriented
diplomacy” and the “arc of freedom and prosperity.”10 In his words, value-
oriented diplomacy “involves placing emphasis on the ‘universal values’
such as democracy, freedom, human rights, the rule of law, and the market
economy as we advance our diplomatic endeavors.”11 This slogan was
associated with the geographical concept of the arc of freedom and
prosperity. The main goal of this policy was to enhance cooperation with
other states pursuing democracy and market economies, with the arc
extending from Eastern Europe through the Middle East, South Asia and
Southeast Asia all the way to the Russian Far East.
As Aso declared that these two concepts constituted the new diplomatic
pillar of Japan, the Ministry of Foreign Affairs (MOFA) also campaigned on
the front page of Diplomatic Blue Book of 2007.12 The Abe-Aso proactive
diplomacy under the new concepts indeed enhanced new cooperation and
partnerships.13 Japan embarked on seeking new strategic relations with
Europe through NATO’s global partnership initiative, as well as engagement
in Eastern Europe. Japan also placed importance on Australia, with the
consolidation of security partnership by signing the “Japan-Australia Joint
Declaration on Security Cooperation” on March 13, 2007.14 Japan’s
diplomatic outreach to India was also highlighted. Prime Minister Abe and
Prime Minister of India Singh signed a “Joint Statement towards Japan-India
Strategic Partnership” on December 15, 2006.15
Japan’s proactive diplomatic endeavors associated with Abe-Aso’s new
concepts certainly created a wide range of security partners along with the
‘arc’. However, given less emphasis on a direct diplomatic approach towards
Beijing, the Abe-Aso strategy provoked stark negative reactions from China.
Indeed, various voices from Beijing regarded this strategic concept as
“China encirclement” and insisted that it would lose the opportunity for
further Japan–China reconciliation. The value-oriented diplomacy also
lacked synergy with the development of U.S.–China relations. During 2005–
2007, the U.S. Department of State promoted the concept of China as the
“responsible stakeholder,” which created the foundation of deeper economic
and strategic cooperation between the two powers. While Japan aspired to
the China-Out diplomatic concept, the U.S. (and many other Asia-Pacific
states) sought the opportunity of China-In approaches.

Phase II (China-In) 2008–2010

Mutually beneficial relationship/East Asian community

As soon as Abe stepped down, citing ill health, in September 2007, the
administration of his successor, Yasuo Fukuda, quietly but decisively
removed this policy, concluding that democracy promotion and values-based
diplomacy would not produce the expected results. Fukuda is regarded as a
doveish personality with a pro-China background within the LDP and has
been known as being critical towards Abe-Aso diplomacy. Soon after
assuming the office, his foreign policy team refrained from continuing with
the Abe-Aso ideological agenda, then characterized his policy as “resonant
diplomacy” (kyomei gaiko).16 Fukuda reiterated the importance of “active
Japanese diplomacy towards Asia, in resonance with the U.S.-Japan
alliance.” Obviously, the concept self-declared that Japan was ready to shift
towards “China-in” diplomacy, compatible with strengthening the alliance
with the U.S.
Fukuda’s call for the “resonant diplomacy” came to fruition by realizing
the President Hu Jingtao’s visit to Tokyo on May 6–10, 2008. Japan and
China have come up with the Joint Statement on Comprehensive Promotion
of “Mutually Beneficial Relationship” Based on Common Strategic
Interests.17 This joint statement urged both governments to resolve bilateral
issues through consultations and comprehensive sets of cooperation on the
following five pillars: 1) enhancement of mutual trust in the political area, 2)
promotion of people-to-people and cultural exchange as well as the
sentiments of friendships, 3) mutually beneficial cooperation (energy and
environment, trade and investment, cooperation in the East China Sea), 4)
contribution to the Asia-Pacific, 5) contribution to global issues.
After the historic landslide victory of the Democratic Party of Japan (DPJ)
at the general election on August 30, 2009, Prime Minister Yukio Hatoyama
further manifested Japan’s “China-in” diplomatic approach through the
concept of “East Asia Community.”18 Hatoyama’s vision of East Asia
Community, as he described in his speech, was nothing more than a
continuation of Japan’s approach towards community building in East Asia
Summit, ASEAN+3 and Japan–China– Korea trilateral cooperation.19
However, the context of placing this concept brought about various
criticisms from the U.S. and domestic conservative groups as Hatoyama
often mentioned about taking a distance from Washington and tilting more
towards Asia, and key DPJ senior leaders expressed the opinion that the East
Asia Community would not include the participation of the U.S.

Phase III (China out) 2010–present

Senkaku/network diplomacy/Asia’s Security Diamond

Hatoyama’s quest for the East Asia Community with the “China-in” notion
was dramatically modified by Prime Minister Naoto Kan who succeeded
Hatoyama after his resignation in June 2010. Washington’s deep mistrust of
the Hatoyama administration’s foreign policy, especially over the issue of
U.S. Marine’s Futenma relocation facility in Okinawa, as well as over his
diplomatic tilt towards China, led to a deterioration of U.S.–Japan alliance
management. Hatoyama eventually gave up all of his alternative options for
the U.S. Marine relocation, and has settled on the Henoko relocation plan,
which was originally agreed by the LDP before the DPJ came to power. With
the significant loss of popularity, as well as the departure of coalition partner
Social Democratic Party, Hatoyama decided to step down. The East Asia
Community and the “China-in” notion also faded in diplomatic discourse, as
Kan’s immediate assignment was to restore Washington’s trust.
Another game changer was the Senkaku fishery boat collision incident in
September 2010. It occurred in the morning of September 7, when the
Chinese trawler, Minjinyu 5179, operating in disputed waters, collided with
Japanese Coast Guard patrol boats near the Senkaku Islands. The collision
and Japan’s subsequent detention of the captain resulted in a major
diplomatic dispute between Japan and China. The Chinese government
suspended major official meetings and halted the export of rare earth
minerals to Japan. After ten days of diplomatic tension between the two
countries, detained Chinese crew members were released by the local
prosecution office without charge. As a result, the media and the public
criticized the Japanese government for a weak-kneed response towards
China and called for a resolute attitude. The annual survey of pubic opinion
of foreign policy in October 2010 showed the worst record of affinity
towards China. The figures show a sharp downturn of affinity from 2009
(38.5 percent) to 2010 (20.0 percent) and a rise of non-affinity from 2009
(58.5 percent) to 2010 (77.8 percent).20
When the balance of power in the Japan–China relation is shifting towards
Beijing, the assertive nature of Chinese power increased Japan’s domestic
political correctness to counter China. Prime Minister Yoshihiko Noda, who
inherited the Prime Minister’s office in September 2011 after the resignation
of Naoto Kan, promoted network diplomacy with like-minded states in Asia.
This includes the upgrading of strategic partnerships with ASEAN on
maritime security with the obvious intention to collectively balance Chinese
influence (discussed in a later section).
The China-out foreign policy orientation is further manifested by the
resurgence of the LDP after the general election in December 2012, and by
the revival of Abe Shinzo becoming, once again, Prime Minister. Soon after
assuming office, Shinzo Abe revealed his diplomatic strategy entitled
“Asia’s Democratic Security Diamond” on the website of the Project
Syndicate.21 In his article, Abe asserted that “ongoing disputes in the East
China Sea and the South China Sea mean that Japan’s top foreign-policy
priority must be to expand the country’s strategic horizons.” According to
Abe, such horizons were explored through envisaging “a strategy whereby
Australia, India, Japan, and the US state of Hawaii form a diamond to
safeguard the maritime commons stretching from the Indian Ocean region to
the western Pacific.” As this concept resembles the “arc of freedom and
prosperity” of 2007, which emphasized ties with continental Eurasia
democracies, “Asia’s Security Diamond” reiterated forming a coalition
among maritime democracies in Asia. Curiously enough, Abe mentioned that
the Japan–China relationship “is vital to the well-being of many Japanese,”
but as prioritization of Japan’s diplomacy, he reiterated that “Japan must first
anchor its ties on the other side of the Pacific.” With its revival by Shinzo
Abe, the “China-out” policy dynamic is seemingly further accelerated.
Japan’s new strategic imperative: crafting deterrence and
collective balancing vis-à-vis China
The rise of Chinese power has also accelerated the process of reconfiguring
Japan’s defense policy, the U.S.–Japan alliance and Japan’s security
partnerships in the Asia-Pacific.

New defense policy: “dynamic defense” and “dynamic deterrence”

Japan’s National Defense Policy Guideline (NDPG) adopted on December
17, 2010, adopted a new concept called “Dynamic Defense” (doh-teki boei
ryoku).22 This concept replaced the Self-Defense Forces (SDF )’s long
standing “Basic-Defense Force Concept” (kiban-teki boei ryoku kohso) that
was formularized in the 1970s. The former concept placed an emphasis on
securing Japan’s minimum requirement for defense in order to avoid being
regarded itself as a power vacuum in the region. This policy led to the
placement of Self-Defense Forces across Japan, including the deployment of
a major Ground Self-Defense Forces battalion in Hokkaido.
The new “dynamic defense” and “dynamic deterrence” concepts, in
contrast, focus on the “operational use of the defense force such as
demonstrating the nation’s will and its strong defense capabilities through
timely and tailored military operations under normal conditions.” These
concepts were especially targeted at enhancing: 1) operational readiness in
dealing with a situation surrounding Japan by reinforcing intelligence,
surveillance and reconnaissance (ISR) capabilities, 2) quick and seamless
response to various contingencies and 3) multi-layered promotion of
cooperative activities with foreign countries.
As a geographical focus, the new Guidelines called for reinforcement of
the defense preparation for southwestern regions of Japan. This was led by
China’s growing activities both in the air and at sea, alongside with the sea
change of military balance of power. Risks and threats in the southwestern
region could be classified as (1) low intensity: violation of maritime interests
by intrusion of fishing boats and marine observation vessels, or (2)
medium/high intensity: destruction of a base (U.S. Forces and Self Defense
Forces) and logistics infrastructure (ballistic/cruise missiles, special forces
and cyber attack), and attack and invasion on Japan’s numerous island
regions. The design of the new Guidelines could be understood as an
initiative to manage (1) with Japan’s own “Dynamic Defense,” and deal with
(2) by maintaining and reinforcing joint action with U.S. and U.S. extended
deterrence.

Balancing China through enhanced security partnerships in Asia

Japan is also enhancing multi-layered security partnership in the Asia-Pacific
region beyond the traditional alliance relationship with the U.S. This
partnership includes a) networking with U.S. allies and partner countries
(especially South Korea and Australia), b) enhancing security cooperation
with ASEAN countries, c) enhancing cooperation with India and other
countries in maritime security, d) establishing practical and cooperative
relationship through the ASEAN Regional Forum (ARF) and the ASEAN
Defense Minister’s Meeting Plus (ADMM Plus).
Helping to build the ASEAN’s maritime security capacity has also become
a key policy focus of the Japanese government. First, Japan is more actively
engaging in joint military exercises and training in Southeast Asia. In the
past several years, Japan has increased its profile to participate in joint
exercises, humanitarian assistance, disaster relief and non-combatant
evacuation operations. The Japan Self Defense Force (JSDF) has
participated in the U.S.–Thai Cobra Gold joint/combined exercises since
2005 and joined in the U.S.–Philippines Balitakan series for the first time in
March–April 2012. In July 2011, Japan conducted its first joint maritime
military exercise with the U.S. and Australia in the South China Sea off the
coast of Brunei. Japan has been an active participant in the Pacific
Partnership, a dedicated humanitarian and civic assistance mission in
Southeast Asia. With increased participation in multilateral joint military
exercises and training, Japan is significantly increasing its networking,
communications and security cooperation with regional states. Starting from
the fiscal year 2012, the Ministry of Defense will embark on an assistance
program for security capacity-building in ASEAN countries in such fields as
humanitarian assistance, disaster relief and counter-piracy operations.
Although the current budget is rather small, it is expected to expand over the
longer term.
Second, Japan has become more vocally supportive of ASEAN’s security
capacity by boosting the Official Development Assistance (ODA). During
the Japan–ASEAN Summit Meeting in November 2011, Prime Minister
Yoshihiko Noda pledged $25 billion to promote flagship projects for
enhancing ASEAN connectivity. At the Japan–Mekong Summit in April
2012, Japan also pledged $7.4 billion in aid over three years to help five
Mekong states’ infrastructure projects. Aspects of ASEAN’s critical
infrastructure such as airports, ports, roads, power generation stations and
electricity supply, communications, and software development are important,
and often highly compatible, components of their security sectors. Foreign
Minister Koichiro Gemba is now conspicuously promoting the “strategic use
of ODA” to seek connectivity between Japan’s aid and regional security. If
Japan’s financial assistance is more strategically oriented to support these
functions, it can serve as a major tool for ASEAN to build up its defense
infrastructure.
Such capacity could also support an effective U.S. military presence in
this region. As former Secretaries of Defense Robert Gates and Leon Panetta
mentioned, the importance of “building the capacity of others,” enhancing
the capacity of U.S. allies and friends in Asia, is a major component of the
rebalancing strategy. If the ASEAN coastal states are able to perform
effective intelligence, surveillance and reconnaissance (ISR) operations and
develop their low-intensity operation capabilities, escalation management at
the initial level of tensions would be dramatically improved. This
infrastructure could also provide potential alternative access points for U.S.
forces in Southeast Asia. In pursuing a “geographically distributed,
operationally resilient and politically sustainable” presence, capacity
building in Southeast Asia would bring about cohesive guidelines, as stated
in the latest 2+2 Joint Statement, for the Japan–U.S. alliance.
Finally, the government of Japan is seeking to promote direct arms exports
to support the defense infrastructure of ASEAN countries. In December
2011, Japan decided to ease the restrictions imposed under its Three
Principles on Arms Exports. While maintaining the basic philosophy of
restraining exports, overseas transfers of defense equipment are now allowed
in principle in cases related to contributing to peace and advancing
international cooperation. For example, Japan is providing the Philippines
with patrol vessels for its coast guard and maritime communications systems
through ODA in the coming years. Building upon the eased restrictions,
Japan is gearing up to consider exporting patrol vessels, aircraft and multi-
purpose support ships to enhance ASEAN’s maritime security capabilities. If
this hardware assistance is coupled with technical support and training by
the Japan Coast Guard and the MSDF, Japan’s support will more effectively
contribute to their maritime security.

Conclusion
The rise of Chinese power presents a major impact on Japan’s foreign and
security policy reorientations. Japan’s strategic challenge derives from two
structural shifts from long-standing premises: (1) uncontested supremacy of
the United States in East Asia and (2) Japan’s relative bilateral superiority
vis-à-vis China. China’s rise and the relative decline of the United States
have shifted the former premise of uncontested supremacy to “contested”
supremacy.23 China’s overtaking of Japan in GDP also gradually transferred
to the military domain, which led bilateral balance of power in China’s favor.
Japan’s foreign and security policy responses towards the rise of Chinese
power can be best described as the pursuant of an internal and external
balancing. In spite of normative conflict in Japan’s foreign policy discourse
over “China-in” (engagement) and “China-out” (balancing) concept in recent
years, it gradually became the tendency that the latter creates the political
correctness overwhelming the former. This trend became more obvious after
the heightened tension over the Senkaku Islands since September 2010.
After the failure of a silent status-quo management, the Senkaku became the
major issue for securing the sovereignty of both countries, thus making both
sides less conciliatory. Without a grand bargain between Tokyo and Beijing
which is mutually acceptable and politically sustaining, Japan’s quest for
balancing China is likely to be persistent.
For manifestation of Japan’s effective balancing strategy against China,
the U.S–Japan alliance continues to play a pivotal role. In this regard, the
U.S. rebalancing to the Asia-Pacific region since 2010, with a series of
reinforcements of U.S. forward presence in the region, has been a
welcoming trend for Japan. However, Japan also anticipates the fear of U.S.
support becoming more conditional given that U.S. supremacy is gradually
being contested by the expanding A2/AD capability of China. Thus, Japan’s
own efforts to place more emphasis on developing indigenous defense
capabilities for dealing with low intensity conflicts and ISR missions has
become very important, while concomitantly ensuring U.S. security
commitment in the escalatory scenarios.
Japan also placed more emphasis on regional security partnerships in the
Asia-Pacific region. Recent expansion of Japan’s security relations with
Australia, India and ASEAN member states indicate a series of collective
soft-balancing against China. The new dimension of such partnerships
includes the capacity building of ASEAN coastal states such as the
Philippines and Vietnam. With expanded participation in joint training and
exercises, “strategic use” of ODA and the arms exports to partner states,
Japan’s security engagement in Southeast Asia has become more vocal to
address the changing balance of power in East Asia.

Notes
1 The Japan Ministry of Foreign Affairs, text of Joint Statement between the Government of Japan
and the Government of the People’s Republic of China on Comprehensive Promotion of a
“Mutually Beneficial Relationship Based on Common Strategic Interests” (May 8, 2008),
www.mofa.go.jp/region/asia-paci/china/joint0805.html.
2 For Japanese perception of China’s growing military assertiveness, see National Institute of
Defense Studies (NIDS), China Security Report, the annual report by NIDS since 2010,
www.nids.go.jp/english/publication/chinareport/index.html.
3 Michael J. Green, Japan’s Reluctant Realism: Foreign Policy Challenges in an Era of Uncertain
Power, New York: Palgrave, 2001, pp. 77–109. Also see Benjamin Self, “China and Japan:
Façade of Friendship,” Washington Quarterly, Vol. 26, No. 1, Winter 2002–3, pp. 77–88.
4 See John J. Mearsheimer, The Tragedy of Great Power Politics, New York: W. W. Norton, 2001;
Aaron Friedberg, “The Future of U.S.-China Relations: Is Conflict Inevitable?” International
Security, Vol. 30, No. 2 (Fall 2005).
5 International Monetary Fund (IMF ), World Economic Outlook Database,
www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx, accessed January 25, 2013.
6 Tokyo Foundation Asia Security Project, Japan’s Security Strategy towards China: Integration,
Balancing and Deterrence in the Era of Power Shift (October 31, 2011),
www.tokyofoundation.org/en/articles/2011/china-strategy.
7 Tokyo Foundation Asia Security Project, Japan’s Security Strategy towards China.
8 Kosuke Takahashi, “Ten Reasons for Japan’s Revolving Door,” Asia Times, June 11, 2011.
9 T.J. Pempel, “Between Pork and Productivity: The Collapse of the Liberal Democratic Party,”
The Journal of Japanese Studies, Vol. 36, No. 2, Summer 2010, pp. 227–254.
10 For detailed analysis of the “Value-oriented Diplomacy” and the “Arc of Freedom and
Prosperity,” see Ken Jimbo, Nihon Gaiko ni Okeru Rinen wo Meguru Tenkai: Kachi no Gaiko,
Jiyu to Han-ei no Ko wo Kaiko Shite (In Search of Values in Japanese Diplomacy: Value-oriented
Diplomacy and the Arc of Freedom and Prosperity), Sekai Heiwa Kenkyujo Chosa Kenkyu
Hokokusho (The Institute of International Policy Analysis), March, 2009; Yuichi Hosoya, “The
 Rise and Fall of Japan’s Grand Strategy: The ‘Arc of Freedom and Prosperity’ and the Future
Asian Order,” Asia-Pacific Review, Vol. 18, No. 1, May 2011, pp. 13–24; Tomohiko Taniguchi,
“Beyond ‘the Arc of Freedom and Prosperity’: Debating Universal Values in Japanese Grand
Strategy,” German Marshall Fund, Asia Paper Series 2010, October, 2010.
www.gmfus.org/galleries/ct_publication_attachments/Taniguchi_AFP_Oct10_final.pdf.
11 Taro Aso, “Arc of Freedom and Prosperity: Japan’s Expanding Diplomatic Horizons,” November
30, 2006, www.mofa.go.jp/announce/fm/aso/speech0611.html.
12 Japan Ministry of Foreign Affairs, Diplomatic Bluebook 2007, March 2007. See English
translation version (summary), www.mofa.go.jp/policy/other/bluebook/2007/html/index.html.
13 See Speech by Prime Minister Shinzo Abe at NATO, “Japan and NATO: Toward Further
Collaboration,” January 12, 2007, www.mofa.go.jp/region/europe/pmv0701/nato.html.
14 Japan Ministry of Foreign Affairs, Text of Japan-Australia Joint Declaration on Security
Cooperation, March 13, 2007, www.mofa.go.jp/region/asia-paci/australia/joint0703.html.
15 Japan Ministry of Foreign Affairs, Text of Joint Statement towards Japan-India Strategic
Partnership, www.mofa.go.jp/region/asia-paci/india/pdfs/joint0612.pdf.
16 Speech of Prime Minister Yasuo Fukuda, “When the Pacific Ocean Becomes ‘Inland Sea’: Five
Pledges to a Future of Asia that ‘Act Together’,” May 22, 2008, www.mofa.go.jp/region/asia-
paci/speech0805–2.html.
17 The Japan Ministry of Foreign Affairs, text of Joint Statement between the Government of Japan
and the Government of the People’s Republic of China on Comprehensive Promotion of a
“Mutually Beneficial Relationship Based on Common Strategic Interests,” May 8, 2008,
www.mofa.go.jp/region/asia-paci/china/joint0805.html.
18 For Hatoyama’s quest for East Asia Community, see Ryo Sahashi, “Hatoyama Yukio Seiken Ni
Okeru Ajia Gaikou: Higashi Ajia Kyodo-tai Koso no Henyo wo Tegakari Ni” (Japan’s Asia
Policy during the Yukio Hatoyama Administration: A Study of the “East Asian Community”
Proposal and its Transformation), Mondai to Kenkyu (Issues and Research), Vol. 40, No. 2 (April
2011), pp. 93–131.
19 Speech by Prime Minister Yukio Hatoyama, “Japan’s New Commitment to Asia: Toward a
Realization of East Asia Community,” November 15, 2009,
www.kantei.go.jp/foreign/hatoyama/statement/200911/15singapore_e.html.
20 The Cabinet Office of Japan, Gaiko ni Kansuru Yoron Chosa (Survey on Public Opinions about
Foreign Policy), conducted in October 2012, released on November 26, 2012. Text (in Japanese)
available www.cao.go.jp/survey/h24/h24-gaiko/index.html.
21 Shinzo Abe, “Asia’s Democratic Security Diamond,” December 27, 2012, www.project-
syndicate.org/commentary/a-strategic-alliance-for-japan-and-india-by-shinzo-abe.
22 Japan Ministry of Defense, National Defense Program Guidelines for FY2011 and Beyond,
December 17, 2010, text (provisional English translation) available
www.mod.go.jp/e/d_act/d_policy/pdf/guidelinesFY2011.pdf.
23 Hugh White, The China Choice, Black Inc, 2012.
14 The changing security
dynamics in Northeast Asia
and the US alliances with
Japan and South Korea
Toward synchronization
Hiroyasu Akutsu1

Introduction
In response to the global strategic shifts seen during the last decade,
especially China’s rise in economic, political, and military dimensions, the
United States finally decided to “pivot” or “rebalance” to Asia. Although
US political and military commitment and presence had always been in the
region even after the end of the Cold War, the tone and tenor of rebalancing
has given a new vigor to the US engagement with Asia, especially since
China’s military rise has increasingly been reinforced. This is seen in the
recent case of China’s creation of the East China Sea air-defense
identification zone (ADIZ). Against this backdrop, this chapter aims to
answer two pertinent questions: How should Japan and South Korea, the
closest allies of the United States in Northeast Asia, respond? And how
should they reshape and strengthen their ties to help the United States
sustain its strategy?
Over the last two decades, the China factor played only a marginal role in
the Japan–South Korea (Republic of Korea, ROK) security cooperation; in
recent years, it has been widely accepted that China’s strategic influence
would become more crucial not only for the resolution of the impasse over
the Korean Peninsula but also for many strategic issues in Northeast Asia.
The Japan–US–South Korea security cooperation historically has been
focused on dealing with North Korea’s nuclear and missile threats. But
given the growth of China’s comprehensive power, Japan and South Korea
are at a critical juncture where these two quasi-allies have to redefine their
security relations in the face of China’s rise and the US strategic response to
this rise.
In answering the above questions, this chapter contains a brief review of
the Japanese and South Korean responses to their respective alliance with
the United States in the context of the changing security dynamics of
Northeast Asia. This is followed by a discussion of Japan–South Korea
security cooperation, and a brief review of the experience of Japan–
Australia security cooperation. The conclusion covers some useful
implications for future Japan–South Korea cooperation designed to
strengthen the nexus between the US–Japan and US–ROK alliances.

The constant and changing North Korean factor

Washington has always hoped that Japan and South Korea, its two essential
alliance partners in Northeast Asia, would cooperate to deter North Korea’s
threat and stabilize the region. In the past decades, the US–Japan alliance
was the lynchpin in the US East Asian strategy and the US–South Korea
alliance had a narrower focus of dealing with the threat from North Korea.
Japan, the United States, and South Korea share the traditional and
common threat from North Korea. In the wake of the 1993–94 nuclear crisis
and North Korea’s continued provocations in the mid-1990s, there appeared
several specific proposals for the Japan–South Korea security cooperation.2
Seoul wants the US–South Korea alliance to deal with security issues other
than North Korea. However, with the reality of North Korea as its main and
present threat, the alliance has remained primarily focused on North Korea.
Many sorts of classified plans, including OPLAN 5029 and other related
and specific operational plans, against the North Korean situation have
already been updated according to the country’s threat level.3
 The US–Japan alliance’s main focus has been North Korea’s ballistic
missile threat. Their ballistic missile defense (BMD) program has been
updated according to North Korea’s capability and the technological
progress. Japan has always been under the threat of North Korea’s mid-
range ballistic missile series, the Rodong 1 and 2.4 With the rapid progress
of North Korea’s missile capability, the United States and Japan have been
pushed to accelerate their cooperation in advancing the quality of the
system. In the wake of North Korea’s third nuclear test in February 2013,
the United States decided to deploy to Japan the second TPY-2 radar. Both
Japan and the United States agreed to promote this plan.
In dealing with North Korean missile attacks, Japan has reportedly
discussed North Korean contingencies such as evacuating Japanese
nationals on the Korean Peninsula and dealing with the entry of “boat
people” from North Korea into Japanese territorial waters.5 As for non-
combatant evacuation operations (NEO) for Japanese nationals from the
Korean Peninsula, the US–South Korean forces would play a leading role.
It was reported that since 1996, the US and South Korean forces had
regularly conducted joint NEO exercises and that they had planned in 2012
to evacuate 220,000 US and Japanese nationals from South Korea in times
of contingency on the peninsula.6

The looming China factor

Since the 1990s, many scholars have recognized and discussed the China
factor as the nexus between the US–South Korea alliance and the US–Japan
alliance as well as the Japan–South Korea security cooperation. However, it
has never been explicitly discussed at the governmental level. A
distinguished South Korean expert on China pointed out more than a decade
ago:

[W]hile US alliance ties with Japan and Korea remain strong and are
likely to do so in the foreseeable future, will they continue to be robust
enough to withstand future regional challenges and crises, of which the
“China factor” looms largest? Shouldn’t Japan and Korea pursue
hedging strategies now and in the future, as all rational actors would
do?7
The above questions have repeatedly been asked and addressed in academic
and politico-military policy study circles in the United States, South Korea,
Japan, and elsewhere since the end of the Cold War; at the governmental
level, there seems to have been no concrete and effective discussion.
As I will discuss in the rest of this chapter, while China’s rise is not an
urgent issue in the US–ROK alliance transformation, it has been a dominant
issue in the changing US–Japan alliance. A brief comparison of Japan and
South Korea’s approaches to North Korea and China is provided, see Table
14.2 in the Appendix.

China’s rise and the US–ROK alliance

South Korea faces two dilemmas. First, it involves China’s role in dealing
with North Korea since the end of the Korean War. Although South Korea
and China established their formal diplomatic relationship in 1992, China’s
continued status as North Korea’s ally du jour and its influence on the
North Korean issue have been major concerns for South Korea. Despite
occasional diplomatic friction between the two countries, South Korea’s
increasing trade dependence on China has induced Seoul to continue to
engage China. South Korea’s continuing trend of sustaining and upgrading
its “strategic partnership” with Beijing has been reinforced by China’s
continued rise both regionally and globally.
Nevertheless, within the South Korean military establishment, the ROK
Navy perceives China’s growing naval power differently. Since 1995, the
ROK Navy has been striving to improve its capabilities to become a blue-
water navy with the slogan “To the Sea, To the World.” The desire to
improve its naval capabilities may have been further reinforced by China’s
naval behavior in response to the US–South Korea plans for naval exercises
in the wake of the Yeonpyeong incident in 2010.8
More fundamentally, South Korea’s other dilemma is the potential
scenario of choosing between the United States and China. In fact, in both
academic and policy circles, there are at least two divergent views on South
Korea’s response to China’s rise with reference to the United States.
Although according to South Korean academic and policy elites, the public
perception of China might not be clearly anti-Chinese or pro-Chinese,
growing US–China rivalry will force South Korea to choose to go against
its interests by siding closely with the US security. This view tends to lead
to an argument that South Korea should engage China and maintain a close
alliance with the United States. The other view holds that the proper course
is to balance these positions by paying more attention to South Korea’s
relations with other countries in Asia including Japan.9 Chun Chae-sung, a
professor at the Seoul National University, aptly captures this dilemma:

For almost a decade, South Korea’s biggest trading partner has been
China, while the United States has been its most important security
partner. Given this context, the future tasks for the U.S.-ROK alliance
will be to peacefully manage the evolution of the regional balance of
power, establish a cooperative mechanism for working with China, and
address regional security issues, such as North Korea, territorial
disputes, and human security concerns. This will only be possible
when the trust that is necessary for long-term strategic cooperation
exists among South Korea, the United States, and China.10

Regarding the impact of China’s military rise on the US–ROK alliance, no

obvious impact has been perceived so far. One of the ostensible reasons for
the US Asia pivot or rebalancing is the desire to reduce its political and
military stretch to the Middle East, beginning in the wake of 9/11 in 2001.
However, this is not the main reason for the changing role of the US forces
in Korea or the transformation of the US–ROK alliance. Based on joint
studies by South Korean and US military think tanks, it seems that many
experts believe that some of these changes have already begun in the 1990s.
As partial transfer of US military roles to the ROK forces, 80 percent of the
missions around the demilitarized zone (DMZ), such as war-time landmine-
sweeping, prevention of maritime penetration by North Korean agents and
search and rescue, had already been transferred to the ROK military by
2008.
After 9/11, the US war on terror in Afghanistan and Iraq forced the
United States to move one-third of the US Army 2nd Infantry to Iraq, and
this raised the fear of “abandonment” in South Korea, even under the Roh
Moo-hyun administration that opposes US military policies. But the death
of a female teenager in an accident caused by US military personnel in 2002
made the South Korean public more skeptical of the presence of US forces
in South Korea. The anti-American public sentiment in South Korea had
undermined the foundations of the US–ROK alliance.
The start of the US–South Korea consultation on alliance transformation
in 2003 under the Roh Moo-hyun administration further challenged the
rationale for the so-called tripwire. Both sides agreed at the Future of
Alliance meeting in 2004 to relocate US bases in Korea to two major
locations further south. However, South Korea gave no clear answer to the
question of “strategic flexibility,” referring to the mobilization of US forces
in Korea for strategic purposes beyond the North Korean issue.
On January 19, 2006, South Korea formally accepted “strategic
flexibility” at the US–ROK Defense Ministerial meeting (SCAP). Later in
October 2006, based on this agreement, the US–ROK 38th Security
Consultative Meeting (SCM) held in Washington D.C. agreed that “strategic
flexibility” would be an important component of the US–ROK alliance in
the future. “Strategic flexibility” implied that the US military bases in South
Korea could be used in the times of contingency over the Taiwan Strait, but
South Korea has maintained reservations on this issue fearing that it could
harm South Korea–China relations.
In June 2009, US President Barak Obama and South Korean President
Lee Myung-bak agreed to seek ways to enhance the US–ROK alliance and
tackle the security environment in Northeast Asia. Both the 2009 summit
meeting and the following defense and foreign policy ministerial meeting
(“2 Plus 2”) in July 2010 confirmed to make the alliance a “bilateral,
regional, and global” engagement.
One may assume that China’s opposition to the US–ROK naval exercise
in the West/Yellow Sea to deter North Korea’s further provocations after the
Yeonpyeong incident in 2010 clearly frustrated South Korea. But such
frustration did not translate into any hardline policy toward China by South
Korea. Instead, South Korea has pursued its military dialogue and exchange
approach since 2011 by conducting the annual South Korea–China
strategic/defense dialogue. In order to obtain China’s cooperation in the
process of Korean unification, South Korea seeks to play safe with China in
the military dimension in order to maintain stable relations. Its deepening
economic dependence on China has also become an important factor behind
Seoul’s attitude toward China.
 Additionally, from a strategic point of view, China’s ability to get the
United States and South Korea to shift the location of naval exercises might
indicate PLA Navy anti-access and area denial (A2/AD) capabilities in the
West/Yellow Sea, but this view has not been explicitly discussed at the
governmental level.
Instead, along with the existing policy line of transforming the US–ROK
alliance into “a bilateral, regional, and global alliance,” the ROK military
will be given more autonomy in dealing with North Korea’s threat by 2015.
But the China factor seems to be missing from this development.
On the other hand, one major effect of the US rebalancing would be
Seoul’s rising concern of increased financial burden to sustain US military
presence in South Korea, given that the US defense spending is likely to
decline in the near future.11

China’s rise and the US–Japan alliance

China’s rise has been a constant subject of discussion among Japanese
security planners and between Japanese and the US allies for the past two
decades. To be more precise, there was a time immediately after the 1990–
91 Persian Gulf War when Japan was seen as the next greatest threat to the
United States. In fact, the Clinton administration saw Japan as an
“economic threat” to the United States and imposed a series of invasive
demands on Tokyo to reduce the share of Japanese industries’ engagement
in the international high-technology and manufacturing sectors. Fortunately,
despite economic friction between allies, both sides managed to conclude a
number of compromises and agreements.
As we will see later, the emergence of the North Korean nuclear issue
through the late 1980s to 1990s also strengthened the US–Japan alliance.
Above all, the 1995–96 Taiwan Strait Crisis has affirmed the US
commitment to maintain the security of the Asia-Pacific region by
constantly stationing 100,000 US military personnel there. During the
crisis, China launched missiles near Taiwan to influence the ongoing
presidential election campaign and prevent Lee Teng-hui, an advocate for
Taiwan independence, from winning the election. The US dispatch of two
Aegis ships resolved the crisis as China decided to withdraw. The first half
of the 1990s is sometimes called an era of “alliance adrift.” This is because
of not only the Clinton administration’s rather aggressive economic policy
toward Japan but also Japan’s political turmoil after the break-up of the
Liberal Democratic Party, which had long been a dominant ruling power
after World War II.12 In any event, it was the so-called Nye Initiative that
reaffirmed the commitment of the US–Japan alliance.
Most recently, with the increasing Chinese assertive naval behavior, the
2010 Japan’s National Program Guidelines (NDPG) emphasized defense
and deterrence on the southwestern part of Japanese territory through the
flexible exercise of defense capabilities. For example, when North Korea
announced its planned launch of Unha 3 “satellite rocket” over Japan’s
southwestern islands in April in 2012, the Japan Self-Defense Forces
(JSDF) deployed Aegis-class destroyers in the waters surrounding those
islands, as well as Patriot air/missile defense missile (PAC-3) batteries and
chemical protection units on Okinawa, Miyako, and Ishigaki islands to deal
with the possible dangers of an incoming missile or debris.
Japan’s growing capability to swiftly deploy necessary forces has been
seen as crucial by both Japanese and US defense policy planners. In August
2012, Japanese Defense Minister Satoshi Morimoto and US Secretary of
Defense Leon Panetta agreed to begin discussions on the review of the
current Guidelines for Japan–US Defense Cooperation, first formulated in
1997. For the United States, Japan’s strengthened cooperation is crucial
especially in an emerging A2/AD environment, because US forces in
Okinawa and surrounding areas fall under the cover of Japan’s anti-ballistic
missile system. For example, the JSDF territorial defense operations—mine
countermeasures, anti-submarine warfare, air and missile defense, defense
of remote islands and anti-ship warfare in the southwestern part of Japan—
could contribute to the US ability to deal with China’s A2/AD capabilities.
It should also be noted that Japan’s response to China’s rise is not
exclusively hedging-oriented. Japan aims to establish constructive relations
with China through military-to-military exchanges and other related
confidence-building programmes.
The US–Japan alliance, as Table 14.1 shows, was originally formed to
counter threats from the USSR during the Cold War, even though the
security treaty has actually covered both the Taiwan Strait and the Korean
Peninsula. After the Cold War, the rise of China’s military, political, and
economic capabilities have been a constant focus for the alliance even at the
height of the US war on terror in the Middle East. From the US perspective,
the alliance has been the lynchpin of US policy in Asia-Pacific. For Japan,
the USA is the only formal ally, even though in recent years, Australia also
emerged as a reliable regional and global security partner for Japan.
After 9/11, the USA reinforced its military transformation and effort to
resolve the US military base issue in Japan with the goal of “sustaining
deterrence and reducing burden.” At the more strategic level, both the
United States and Japan shifted their focus from burden-sharing to
mission/role/responsibility-sharing. In 2005, for the first time in the history
of the alliance since 1951, both sides agreed on common strategic
objectives. Through “2 plus 2” meetings held in 2005 and 2006, both sides
agreed to include in the alliance agendas global issues, including responses
to terrorism and proliferation of weapons of mass destruction (WMD).
These agreements required relocating US bases and facilities in Japan: the
relocation of the US Army 1st Corps Command to Zama, the transfer of
some US Marine Corps to Guam and the repositioning of the 7th Fleet’s
exercises to Iwakuni. Although the Futenma issue was thorny and
deteriorating during the early phase under the ruling Democratic Party of
Japan (DPJ), the alliance has generally been strategically adjusted to
respond to the changing security environment in Northeast Asia.
The main driver for such a change is China’s continued rise in power
capabilities. This has been emerging more clearly through China’s assertive
naval behavior in the South and East China Seas.
All these indicate that Japan welcomes the US pivot or rebalancing to
Asia. Noboru Yamaguchi, retired Japanese Ground Self-Defense Force
(GSDF) Lieutenant General and current National Defense Academy
professor, stated:

US Rebalancing toward Asia is desirable and is likely to continue.

How it is implemented, however and to what extent, is not yet clear,
but there is considerable room for US allies to ensure that the
rebalancing takes place in a desirable way. Better alliance management
between the US and allies such as Japan and South Korea could be
positive factor, as would closer cooperation among US allies. . . .
 China’s rise, another decisive factor shaping the landscape of Asian
security, is also dependent on how the US and its allies act. If US
political commitment to Asia remains strong, with a robust military
presence, and if its alliances in this region remain tight, China may
have less incentive to compete militarily with the US and its allies, and
may be inclined to be more cooperative.13

Finally, one concern about the future of US pivot or rebalancing to Asia

would be the limitation posed by the American desire for troop withdrawal
from the Middle East and the accompanying deterioration of the Afghan
situation.

United States: the only connection in the US–Japan and US–

ROK alliances
To date, the United States has been the only bridge connecting the US–
Japan and US–ROK alliances. In practice, the connection between these
two alliances can be seen in the form of Japan–US–South Korea trilateral
security cooperation in dealing with North Korea. In the broader definition
of trilateral cooperation among Japan, the United States, and South Korea,
the Trilateral Policy Oversight and Coordination Group (TCOG) and the
Korean Peninsula Energy Development Organisation (KEDO) can also be
seen as examples of the trilateral cooperation.
In theory, given that Japan and South Korea both regard the United States
as their only and most reliable alliance partner, both countries could work
together to deal with North Korea more effectively. However, many issues
—including the issue of history, negative public sentiments toward defense
cooperation, and Japan’s collective self-defense problem—have restricted
their engagement on security issues. As already mentioned, it was only
recently under the Lee Myung-bak administration that more direct and
pragmatic security cooperation was specifically proposed; for example,
sharing of military information and providing access to defense facilities.14
In order to contemplate actions/conditions required to strengthen the
connection between the US–Japan and US–ROK alliances or even to
synchronize them, I would like to analyze the relevance of Japan–Australia
security cooperation.
The experience of Japan–Australia security cooperation
It should first be noted that as in many cases of US-centered trilateral or
multilateral security cooperation, the United States as the sole superpower
in current international politics and the leading ally or security partner has
often played the central role in Japan–US–Australia security cooperation.
However, as we shall see below, the most impressive and significant aspect
of the trilateral cooperation is the strengthening of bilateral security
relations between Japan and Australia.
To briefly put Japan–US–Australia security cooperation in historical
perspective, the current foreign ministerial-level trilateral security dialogue
(TSD) among the three countries began at the senior official-level in 2002.
It was elevated to the ministerial-level on March 18, 2006. The three
partners, as longstanding democracies and developed economies, shared a
common cause in maintaining global stability and security with a special
focus on the Asia Pacific region. They expected the trilateral cooperation to
complement the strong security relationships established by each of the
three counties. The three countries had already agreed to enhance
information and strategic assessments on major international and regional
security issues and developments on a regular basis.
It should also be noted that the TSD concurred on the value of enhanced
cooperation with other parties including South Korea and ASEAN. It even
welcomed China’s constructive engagement in the region.
To promote trilateral cooperation, both Japan and Australia stressed the
importance of strengthening bilateral security cooperation to secure the US
defense commitment and stable military presence in the Asia-Pacific amid
the US war on terror in Afghanistan and Iraq, and China’s rise. The two
countries took initiative to strengthen the bilateral security cooperation
previously forged by the 1957 Commerce Agreement and the 1976 Basic
Agreement, among many other important documents. In 2007, Prime
Minister Shinzo Abe and Prime Minister John Howard jointly declared
security cooperation, which became the pillar of current close security
cooperation between Japan and Australia. The shared recognition between
the two countries regarding the importance of their respective alliance
relations with the United States is clearly stated in the bilateral document
Japan-Australia Joint Declaration on Security Cooperation issued in 2007:
 Affirming the common strategic interests and security benefits
embodied in their respective alliance relationships with the United
States, and committing to strengthening trilateral cooperation,
including through practical collaboration among the foreign affairs,
defense and other related agencies of all three countries, as well as
through the Trilateral Strategic Dialogue and recognizing that
strengthened bilateral cooperation will be conductive to the
enhancement of trilateral cooperation.15

In order to implement the Joint Declaration, Japan and Australia made the
Action Plan with the following major elements: 1) strengthening
cooperation on issues of common strategic interest, 2) United Nations
reform, 3) security and defense cooperation, 4) law enforcement, 5) border
security, 6) counter-terrorism, 7) disarmament and counter-proliferation of
weapons of mass destructions and their means of delivery, 8) peacekeeping
operations (PKO), 9) exchange of strategic assessments and related
information, 10) maritime and aviation security, and 11) humanitarian relief
operations, including disaster relief.16
It should be emphasized that Japan–Australia cooperation at the
operational level has been evident since the 1990s. Joint operations between
the JSDF and the Australian Defense Force (ADF) include PKOs in
Cambodia in 1992 and East Timor in 2000, disaster relief in Southeast Asia
from 2004 to 2005, as well as humanitarian assistance and reconstruction
operations in Iraq from 2005 to 2006. Most recently, immediately after the
2011 Great East Japan Earthquake, the ADF’s Operation Pacific Assist had
sent three C-17 military transport aircraft out of four to Japan, a gesture
much appreciated by the Japanese. While the situation at that time was a
real one, the cooperation between SDF and ADF served as an exercise for
the similar situations in the future.
As for Japan–US–Australia security cooperation at the operational level,
the JSDF and ADF (and US forces) have actively conducted joint training
and exercises in areas of maritime security and air defense since 2007.
From the viewpoint of deterrence, in particular, the Japan–US–Australia
joint naval exercise near Brunei in July 2011 is noteworthy in light of the
ongoing dispute in the South China Sea. The February 2012 trilateral air-to-
air joint exercise in Guam also made invaluable contributions to the
operations.
Regarding security and defense cooperation in the Action Plan, after two
rounds of negotiations in March and in April 2010, Japan and Australia
signed an agreement on reciprocal provision of supplies and services, or the
Acquisition and Cross-Serving Agreement (ACSA) between JSDF and
ADF. This was the second ACSA for Japan after the Japan–US ACSA
which took effect in October 1996 and was revised in September 1999 and
July 2004.17
To enhance both security and defense cooperation and exchange of
strategic assessments and related information, the two countries also signed
an Information Security Agreement (ISA) on May 17, 2012. The agreement
is the fourth ISA for Japan after those with the USA, NATO, and France.
Regarding the Japan–Australia ACSA, it is designed to promote
cooperation between the JSDF and ADF in fields such as the UN
Peacekeeping Operations and overseas humanitarian assistance and
disaster-relief (HA/DA) operations. It also sets forth a framework for the
reciprocal provision of supplies and services such as training and exercises,
transportation of nationals and others in overseas exigencies, and other
routine activities (see Table 14.3 in Appendix).
ACSA has not been ratified yet, but Japan and Australia have agreed to
work hard to make it effective. The fact that both countries have come to
sign such a critical agreement symbolizes their commitment towards
stronger and closer bilateral security relations.

Lessons and policy recommendations for Japan–US–South

Korea security cooperation
From the above brief observation of Japan–Australia bilateral and Japan–
US– Australia trilateral security cooperation, we can draw some lessons for
Japan– US–South Korea trilateral and Japan–South Korea bilateral security
cooperation.
Bilateral ties in trilateralism
The most important implication, which may be rather general, of Japan–
US– Australian security cooperation for Japan–US–South Korea security
cooperation is that bilateralism in trilateralism is indispensable. One might
argue that US bilateral alliance partners usually strive to maintain and
strengthen their ties with the United States; cooperation among these
partners or “quasi-allies” is not essential. But given the shifting global and
regional balance of power, as already mentioned, the maintenance of the
deterrence power of the United States and its alliance partnership has
become a common agenda for those US alliance partners or “quasi-allies.”
Against this backdrop, Japan–US–Australia security cooperation has
reinforced the necessity and importance of direct and close bilateral
cooperation between Japan and Australia even in the framework of US-led
trilateral cooperation. To fulfill the vision for a more durable trilateral
cooperation, bilateralism is indispensable. Additionally, the US rebalancing
in the Asia-Pacific has strengthened the US–Australia alliance as well,
starting with the rotation of US Marine Corps personnel in Darwin in
March 2012. This would also strengthen the overall capability of the US
alliance system in the region.
Likewise, for Japan–US–South Korea security cooperation, especially for
an efficient and effective management of the North Korean contingency,
more direct and closer cooperation between Japan and South Korea is
indispensable. Despite the historical and political constraints on the
cooperation between Japan and South Korea over the past decades, both
countries have progressed to closely discussing the sharing of defense
facilities and critical information.

Developing the habit of cooperation

Second, in order to foster Japan–US–South Korea security cooperation for
contingencies on the Korean Peninsula, Japan–Australian security
cooperation suggests the need for a comprehensive security framework to
facilitate more specific cooperation and coordination, enhance respective
capabilities and develop the habit of closer cooperation and coordination. In
order to achieve this, the following additional specific areas of cooperation
should be addressed including information and strategic assessment sharing
at the senior level and communications and joint training/exercises at the
operational level. Especially, joint training and exercises could provide
some deterrence effect.

Senior-level information sharing

Third, regularization of the bilateral sharing of strategic assessments and
critical information at the working level between Japanese and South
Korean defense authorities is desirable. As contingencies occur against
one’s expectations and predictions, it is never too early for both sides to
begin developing the habit of exchanging and sharing strategic assessments
and critical information.
As already mentioned, the China factor has been absent from the existing
US–Japan–ROK trilateral cooperation. However, as the influence of China
grows beyond the North Korean issue, part of the trilateral cooperation or
bilateral cooperation between Japan and South Korea necessarily involves
dealing with China on other regional issues of strategic importance. The
following illustration underlines the requirement for Japan–ROK
cooperation. In April 2012, North Korea’s military parade revealed a
vehicle carrying a new type of missile. Japanese media reported that these
transporter erector-launchers (TEL) were exported to North Korea by a
Chinese company with the possibility of violating United Nations sanctions.
It is not yet certain if North Korea actually imported the vehicles from
China, but joint investigation by Japan and South Korea would require the
discussion of China’s strategic involvement in North Korean affairs.

Military-to-military communications and joint training/exercises

The regularization of information sharing and joint exercise/training
between JSDF and the ROK military regarding contingencies on the Korean
Peninsula is very pertinent for a sustainable and strong relationship. Again,
the habit of close communications, cooperation and coordination between
the two militaries would make it easier for Japan and South Korea to deal
with military contingencies on the Korean Peninsula. This would also make
trilateral military cooperation between Japan, the United States, and South
Korea even more efficient and effective.
 Many specific proposals for Japan–South Korea or US–South Korea–
Japan joint exercises have already been made. Some have been actually
conducted including United States, ROK, Japan naval joint exercises
including search and rescue exercises (SAREX) near Hawaii, the Sea of
Japan, and Jeju.
Recently, another proposal was put forward from Seoul for South Korea–
Japan bilateral air defense joint exercise aimed at dealing with various
North Korean contingencies and forging South Korea–Japan mutual
confidence.18 The proposal included the participation of Japan’s Air Self-
Defense Force and the ROK Air Force in the Japan–ROK naval SAREX,
Humanitarian Aid/Disaster Relief (HADR), air fuel supply, formation of air
battle information sharing system, among others.
More advanced cooperation between Japan and South Korea or among
the United States, South Korea, and Japan would require the formal
conclusion of the GSOMIA as well as the ACSA. While these agreements
generally promote security cooperation between the partners in peacetime,
actual contingencies and crises on the Korean Peninsula would require even
more specific and intensive cooperation and coordination between Japan
and South Korea or among Japan, the United States, and South Korea. As
Japan is a third party as far as the issue of Korean unification is concerned,
its role and response would be determined by South Korea’s expectations
and Japan’s requests in times of unification-related contingencies. Japanese
political leaders’ immediate concern would be the safe evacuation of
Japanese nationals on the Korean Peninsula that theoretically requires close
Japan–South Korean coordination.
Currently, the fate of Japanese nationals on the Korean Peninsula during
crisis formally depends on the US and South Korean operations and Japan’s
logistic support for them within the framework of Japan–US–South Korea
security cooperation. The operations could be more efficient and effective if
there were closer communications between South Korea and Japan or
among the United States, Japan, and South Korea. The difficulty in
achieving more direct communications between Japan and South Korea is
partially because of Japan’s issue on the right of collective self-defense,19
but closer and more intensive coordination could make rescue and
evacuations operations for Japanese nationals on the peninsula more
efficient and effective.

The deterrence effect of joint training/exercises

Finally, the joint training/exercises could potentially have a corollary
benefit of deterrence. Japan, the United States, and Australia have
conducted several joint military exercises since 2007. In July 2011, when
the South China Sea dispute was intensifying, the joint naval exercise
among the three countries symbolized strong ties between the United States
and its Japanese and Australian allies, implying that the three security
partners could cooperate to provide “deterrence” against armed
contingencies in the region in the future. In the case of the Korean
Peninsula, Japan, the United States, and South Korea could conduct joint
naval exercises in order to deter North Korea’s naval and missile
provocations (see Table 14.4 in Appendix).

Conclusion: toward alliance synchronization20

Since the 1990s, the significance of Japan–South Korea cooperation has
been recognised and even endorsed by many experts.21 Nonetheless, the
North Korean security threat has continued to be the greatest common
denominator between Japan and South Korea. China is unlikely to replace
North Korea as the immediate common threat that binds the two US allies
in the near future. However, from the US perspective, the further promotion
of the bilateral security relationship between Japan and South Korea is a
welcome step forward. The experience of Japan–Australia bilateral security
cooperation reinforces the Japan–South Korea bilateral security
cooperation. As the chapter has briefly delineated, Japan and South Korea
have already agreed on the necessity and importance of GSOMIA and
ACSA. It is now up to policy-makers on both sides to be pragmatic by
making wise decisions on the agreements, and by planning and
implementing effective action. One example is the pragmatic political
decisions not to politicize history but separate it from more pressing
strategic issues, and this could be found in an agreement between the ROK
and China. Roh Moo-hyun, ROK’s former president, and Hu Jintao, China’s
former president, had agreed on the so-called five principles not to
politicize historical issues between the ROK and China in 2004.22
In the case of Japan–US–Australia security cooperation, closer bilateral
security cooperation between Japan and Australia has positive effects on
Japan–US alliance cooperation and Japan–US–Australia security
cooperation. If Japan–South Korea bilateral security cooperation is raised to
the level of Japan– Australia bilateral security cooperation, especially in
terms of interoperability, the same effects can be expected for US–South
Korea and Japan–US–South Korea security cooperation in contingencies on
the Korean Peninsula or Korean unification processes.
At this initial stage, the Japan–South Korea or US–South Korea–Japan
security cooperation needs to set up commonly shared strategic objectives,
including maintaining and strengthening US security commitment and
presence in Northeast Asia and beyond, jointly deterring and responding to
North Korea’s military provocations, preventing North Korea’s proliferation
of weapons of mass destruction (WMD), maintaining stability and dealing
with contingencies related to North Korea, unification of the Korean
Peninsula, and Northeast Asia and beyond.
Finally, successful Japan–Australia bilateral security cooperation and
South Korea–Australia bilateral cooperation would imply the possibilities
of both Japan–Australia–South Korea trilateral security cooperation and
Japan–US– South Korea–Australia quadrilateral security cooperation in the
future. With the US rebalancing strategy toward Asia-Pacific already in
place, the stronger US alliances with both Australia and South Korea also
would further empower the overall capabilities of the US alliance system in
the region. China’s continued military rise and the corresponding assertive
behavior have reinforced the need for bilateral cooperation—between Japan
and South Korea, between the United States and its alliances with Japan,
South Korea, Australia, and regional actors such as ASEAN countries. Take
the case of China’s creation of East China Sea or its declaration of an air
defense identification zone (ADIZ): In fact, Japan strongly opposed China’s
action for attempting to change the status quo in the East China Sea. South
Korea also expressed its reservations over the Chinese ADIZ and refused to
recognize it. Australia also voiced its concerns over the Chinese ADIZ.
 It is also notable that Japan and South Korea conducted a bilateral and
regular naval SAREX on December 12, 2013, around the sea to the west of
Kyushu.23 This can be seen as a very initial step Japan and South Korea are
taking to strengthen their bilateral defense cooperation, and I personally
hope that this will spill over into the political and diplomatic dimensions
between the two important security partners. It may still be too early to tell
if South Korea would be ready to restart the process to upgrade Japan–ROK
strategic partnership in the face of Chinese military challenges, not just
North Korean ones. Yet South Korea seems to be more sensitive and
cautious about China’s military rise. In other words, even if China’s
economic rise means closer relations between South Korea and China,
China’s military rise has not yet forced South Korea to break ties with its
US ally, nor severe its security ties with Japan and nor sway to China in the
security dimension.
The United States and its allies’ policy towards China is often a mixture
of deterrence/hedging and engagement/cooperative security. It would be
more encouraging, of course, if deft diplomacy existed between the United
States and its allies to deal with any reaction and response. Japan has
repeatedly called for a maritime communication mechanism with China
over the ongoing maritime security issue in the East China Sea, and I
strongly endorse the early establishment of such a mechanism or even a
crisis-management mechanism which could prevent miscommunications
and accidents, and alleviate rising tension between Japan and China.24 In
facing such emerging risks of maritime and air accidents between China
and other countries in Northeast Asia and beyond, perhaps,25 the need is
rapidly increasing for more direct and specific security talks between the
United States and its Japanese and South Korean allies to deal with security
challenges posed by China’s military rise.

Appendices
Table 14.1 The US–Japan alliance and the US–ROK alliance: objectives, capabilities, and on-going
issues in brief comparison
US–Japan (US Forces in US–ROK (US Forces in
Japan: 40,000) Korea: 28,500)
Since 1951 1953
1961 Updated
Common Target: Cold War (formal) USSR North Korea
(up to 1990) Communist forces
Post-Cold War (from 1991) Situations in East Asia/Asia- North Korea
Pacific: International Security/Peace
North Korea (and China) Keeping
International Security/Peace
Keeping
Common Objectives: Post-US Situations in East Asia/Asia- North Korea
Military Pacific: International Security/Peace
Transformation (2000s) North Korea and China Keeping
International Security/Peace
Keeping
*US-Japan Common
Strategic Objectives 2005
Common Objectives: Post-US “Asia Situations in East Asia/the North Korea
Pivot” and “Rebalance” (from 2010) Asia-Pacific:
North Korea and China
International Security/Peace
Keeping
*US-Japan Common
Strategic Objectives 2010
Nature of Deal US: Defense of areas US: Defense of South Korea
surrounding Japan/ ROK: Bases, Joint
of Japan operations
Japan: Bases and facilities,
Logistic support
Ongoing Issue Base Relocation Base Relocation
Japan’s non-acceptance of Transfer of war-time
collective operational control
self-defense (OPCON) in 2015
Source: Author’s analysis.

Table 14.2 Approaches to North Korea and China: Japan and South Korea in brief comparison
Japan South Korea
Threat Perception North Korea North Korea
China (High) China (Medium or Low)
Priorities Abduction Issue Conventional and Cyber Provocations
Ballistic Missiles Missiles
Nuclear Capabilities Nuclear Capabilities
Approach to Deterrence Engagement
China Engagement
Source: Author’s analysis.

Table 14.3 Categories of Acquisition and Cross-Servicing Agreement (ACSA)

Food Food, provision of meals, cooking utensils etc
Water Water, water supply, equipment necessary for water supply etc
Billeting Use of billeting and bathing facilities, beddings etc
Transportation Transportation of people and goods, transport equipment etc
(including
airlift)
Petroleum, oils, Petroleum, oils, and lubricants, refueling, equipment necessary
and for refueling etc
lubricants
Clothing Clothing, mending of clothing etc
Communications Use of communication facilities, communication services,
communication equipment etc
Medical services Medical treatment, medical equipment etc
Base support Collection and disposal of waste, laundry, electric supply,
environmental services, decontamination equipment and
services etc
Storage Temporary storage in warehouse or refrigerated storehouse etc
Use of facilities Temporary use of buildings, facilities, land etc
Training Dispatch of instructors, materials for educational and training purposes,
services consumables for training purposes etc
Spare parts and Spare parts and components of military aircraft, vehicles, and
components ships etc
Repair and Repair and maintenance, equipment for repair and
maintenance maintenance etc
Airport and Services for arrival and departure of aircraft and ships, loading
seaport and unloading etc
services
Source: The Agreement between the Government of Japan and the Government of Australia
concerning Reciprocal Provision of Supplies and Services between the Self-Defense Forces of Japan
and the Australian Defense Force, Canberra: Department of Defense, p. 6.

Table 14.4 Examples of areas of joint training/exercise

Level of intensity/political difficulty Area of cooperation
Low PKO
HA/DR
SAR
Mid Mine-Sweeping
High NEO
Inspections/Seizures
Air Defense
BMD
Source: Author’s analysis.
Notes
1 The views contained in this paper are solely the author’s own and do not reflect those of the
National Institute for Defense Studies (NIDS).
2 See, for example, Yoon, Dok-Min, “The Time has Come to Think about South Korea-Japan
Security Cooperation,” This Is Yomiuri, December 1996, pp. 190–199.
3 OPLAN 5029 is a current version of US–ROK joint operation plans to deal with contingencies
in North Korea, including flows of weapons of mass destruction (WMD) and refugees, and other
chaotic situations in the wake of regime collapse or North Korean aggression against the ROK.
4 Rodong 1 is believed to have a target range from 1,300 km to 1,500 km, while Rodong 2 may be
capable of flying between 2,500 km and 4,000 km.
5 Shoji, Junichiro, “Korean Peninsula Contingencies and the Issue of Evacuating Japanese
Nationals,” NIDS Commentary, No. 32, May 15, 2013, p. 2.
6 Ibid., p. 2.
7 Kim, Taeho, “The China Factor: The Underlying Strategic Driver in U.S.-Japan-Korea Security
Cooperation,” in Rhee, Sang-Woo and Kim, Tae-Hyo, eds, Korea-Japan-Security Relations:
Prescriptive Studies, Seoul: Oruem Publishing House, 2000, p. 70. I refer to endnote No. 9 in
www.eai.or.kr/data/bbs/eng_report/200905131140463.pdf.
8 McDevitt, Michael A. and Lea, Catherine K., CNA Maritime Asia Project Workshop Two: Naval
Development in Asia, Honolulu: Center for Naval Analysis, August 2012, pp. 68–78.
9 Song, Sang-ho, “S. Korea faces strategic choices amid growing Sino-U.S. rivalry,” The Korea
Herald, July 12, 2012.
10 Chun, Chae-sung, “U.S. Strategic Rebalancing to Asia: South Korea’s Perspective,”
ROUNDTABLE Regional Perspectives on U.S. Strategic Rebalancing, Asia Policy, No. 15,
January 2013, p. 16.
11 Manyin, Mark E., Stephen Daggett, Ben Dolven, Susan V. Lawrence, Michael F. Martin, Ronald
O’Rourke, and Bruce Vaughn, “Pivot to the Pacific? The Obama Administration’s ‘Rebalancing’
toward Asia,” Congressional Research Service (CRS) Report for Congress, March 28, 2012, p.
14.
12 Funabashi, Yoichi, Alliance Adrift, New York: Council on Foreign Relations Press, 1999.
13 Yamaguchi, Noboru, “Facilitating the US Pivot: A Japanese Perspective,” Global Asia, Vol. 7,
No. 4, Winter 2012, p. 45.
14 I will return to this point later in this chapter.
15 Ministry of Foreign Affairs of Japan, Japan-Australia Joint Declaration on Security
Cooperation, March 13, 2007.
16 Major Elements of the Action Plan to Implement the Japan-Australia Joint Declaration on
Security Cooperation, Tokyo: Ministry of Foreign Affairs of Japan, December 2009.
17 The Signing of the Japan-Australia Acquisition and Cross-service Agreement (ACSA), Tokyo:
Ministry of Foreign Affairs of Japan, May 19, 2010.
18 Nam, Chang-hee, et al., “US Alliance Transformation in Northeast Asia and South Korea-Japan
Security Cooperation” (Hokutoasia ni okeru doumeihennkaku to nikkanannpokyouryoku),
International Security (Kokusaianzennhosho), No. 40, September 2, 2012, pp. 109–121.
19 Collective self-defense is a natural right of nation-states, guaranteed by the United Nations
Charter, in which nation-states could attack a third party if their allies or security partners were
attacked by that party. Japan has taken the position that Japan possesses the right but could not
exercise it because of constitutional constraints.
20 A similar proposal has recently been put forward. See Nam et al., “US Alliance Transformation
in Northeast Asia and South Korea-Japan Security Cooperation.”
21 Akutsu, Hiroyasu, “Strengthening the US-Centred Hub-and-Spokes System in Northeast Asia:
Advancing from the Traditional Confidence-Building Measures (CBMs) To Interoperability
Coordination between Japan and the ROK,” in Sang-Woo Rhee and Tae-Hyo Kim, eds, Korea-
Japan Security Relations: Prescriptive Studies, Seoul: New Asia Research Institute/ORUEM
Publishing House, 2000, pp. 141–162. See especially p. 151. See also Akutsu, Hiroyasu,
“Towards a New Security Partnership between Japan and South Korea,” Japan aktuell-Journal
of Current Japanese Affairs, December 2008, pp. 104–114.
22 The ROK’s Northeast Asian History Foundation provides a critical explanation of China’s
Northeast Asia Project. See the website of the foundation at www.history-foundation.or.kr/?
stype=1&sidx=67&bidx=1&bmode=view.
23 AFP, “Japan and South Korea hold joint sea drill in China air defense zone,” December 12,
2013, www.scmp.com/news/china/article/1379044/japan-and-south-korea-hold-joint-sea-drill-
china-air-defense-zone?page=all.
24 Japanese and Chinese defense authorities agreed on the objective and structure of the
communication mechanism to avoid contingencies at sea and in the air in June 2012, but after
Japan’s purchase of the Senkaku Islands in September 2012, Japan–China defense exchanges,
including the beginning of such a mechanism, ceased. Some security experts had already
proposed such a mechanism in 2010. See, for example, Akutsu, Hiryoasu, “Japan-China
Maritime Relations: Dealing with New Dimensions,” Lowy Institute for International Policy,
Strategic Snapshot, October 2010, www.lowyinstitute.org/publications/japan-china-maritime-
relations-dealing-new-dimensions.
25 There is a shared concern among even ASEAN countries that China could create its ADIZ in the
South China Sea.
Index

Page numbers in italics denote tables, those in bold denote figures.

9/11 30, 165, 268, 271

A2/AD (anti-access area denial) capability 21, 55–6, 94, 99–100, 102, 269, 270
Abbott, Tony 173–4
Abe, Shinzo 52, 254, 256, 259, 273
Acquisition and Cross-Serving Agreements (ACSA) 21, 274, 276, 277; categories 280
Afghan-Pakistani mutual insecurity 117–8
Afghanistan 121, 218, 225; case study 116–8; China’s role 219–20; relations with China 111, 112,
113; US role 220
aid: China as donor 16; Japanese 261; North Korea 240
Air Defense Identification Zone (ADIZ) 168, 233–4
Air Force–Navy interoperability 99
air forces: China, US and Japan 12; modernization 13
AirLand Battle (ALB) concept 54–5
AirSea Battle (ASB) concept 42, 54–6, 57, 99–100
arc of freedom and prosperity 256–7
armed neutrality, Australia 175–6
arms acquisitions, international comparisons 48–51
arms race 18, 52
arms trading: to Afghanistan 116; Japan to ASEAN countries 261; to Pakistan 115
Art of War 5
ASEAN: challenges to 183–7; institutional instruments 181; political and economic engagement 201;
re-arming 47; Regional Forum 2010 89; regional security 260–1; role of 20; structural power
203–4; summits 66, 192; Treaty of Amity and Cooperation (TAC) 85, 202
ASEAN Charter 192, 193
ASEAN Community 181, 192–4
ASEAN Concord II 193
ASEAN Defense Ministers Meeting-Plus 193–4
ASEAN Economic Community 210
ASEAN Plus Six 190
ASEAN Plus Three (APT) 189–90
ASEAN Regional Forum (ARF) 181, 183, 187–9, 201–3
ASEAN responses: flash-point danger 186–7; institutional balancing 187–94; irrelevance worry 184–
6; post-unipolarity 182–3; taking-sides dilemma 183–4; see also parallel resurgence
ASEAN Security Community 193–4
Asia, geopolitical shift 167
Asia-Pacific Trade Agreement 120
Asian regional strategy (US) 86–7
“Asia’s Democratic Security Diamond” 259
Aso, Taro 254, 256–7
assertiveness, China 88, 206–7, 231, 235–6
Australia 19; armed neutrality 175–6; China strategy 163–4; defense relations with China 171–2;
external balancing 173–4; Green Party 175; increased interaction with China 166; internal
balancing 172–3, 176; military capabilities 173; military rebalance 96; overview of country 164–
5; re-arming 47; regional security 174; relations with China 46; relations with Japan 256, 272–4;
relations with US 167, 173–4; societal links with China 166; trade with China 166
Australia in the Asian Century 170–1
Australian perceptions: China strategy 170–4; China threat 167; of Chinese power 165–70;
engagement policy 170–4; government attitudes 167–8; hedging strategy 172–4, 176; insecurity
165; national interests 164–5; of risk 169; strategic options 175–6
Aynak mines 117

balance of power 204–5; China/US 98–99; Japan–China relations 258–9

Bangkok Agreement 120
Bangladesh: case study 119–20; international relations 123; relations with China 112
Bangladesh–Myanmar–China road-links 120
blue book 146–7
border insecurity, Afghanistan-Pakistan 117–8

Campbell, Kurt M. 65, 90

Cao Guangchan 120
Central Asia: Chinese economic interests 220; costs of nationalism 225–6; development paths 215;
energy exports 222; external interests 216; internal stability 226; regional economic model 226;
 regional security 217, 225–6; Russia-China common interests 218; Russian arms 219; security
architecture 225; Security Clubs 217; strategic roles 19–20
Central Asian perceptions: China’s military power 217–21; context and overview 214–6; energy 221–
2, 226; evolving relationship 214–5; external pressures 215; limits on cooperation 220–21;
logistics 222–3; regional security 223–5
Cheonan sinking 206, 232, 233, 234–5
Chiang Mai Initiative (CMI) 16, 185, 189
Chiang Mai Initiative Multilateralization (CMIM) Agreement 189
China Bridge and Road Corporation (CBRC) 222
China–Indian–US ‘pivot’ dynamics 120–4
China Model 14, 225
Clinton administration 270
Clinton, Hillary 66, 70–1, 75, 78, 85, 86–7, 89, 123, 206, 207; visits to Asia 90
Cold War 28, 183; post-Cold War power management 200–4; regional legacy 200
Collective Security Treaty Organization (CSTO) 217, 218, 223
Commonwealth of Independent States (CIS) 216, 218, 223
Comprehensive National Power (CNP) 6–7
constructivism, view of rise of China 27
cyber security 168–9

Dai Bingguo 30, 77

Declaration of Conduct (DOC) 186, 201, 205
Defence White Papers (Australia) 168–9
Defense Consultative Talks 97
Defense Policy Consultative Talks 97
Defense Strategic Guidance 86
Defense White Paper 2013 15–16
Dempsey, Martin 90
Deng Xiaoping 6, 200, 214
deterrence 207–8
Diaoyu/Senkaku island group 34–5, 100, 207, 256
direct investment, US 91, 94
Dixit, J.N. 151
Donilon, Thomas 78, 90, 102–3
dynamic defense 57, 259–0
dynamic deterrence 259–0
East Asia Community 257–8
East Asian Summit (EAS) 85, 139–0, 181, 185–6, 190–1
East China Sea 88
East Turkestan Islamic Movement (ETIM) 217
economic coercion 88
economic cooperation, with North Korea 244
economic influence 16–17
economic power, focus on 4
economic relations, with India 141–3
energy, Central Asia 221–2, 226
Eurasia vision 216
exclusive institutional balancing 187
Expanded ASEAN Maritime Forum 185
external balancing, Australia 173–4

financial relations, with India 141

Finlandisation 175
flexible multilateralism 71
foreign aid: China and US 10; China as donor 4, 9–10, 16; US 94
foreign direct investment: in Afghanistan 117, 220; Australia 169–70; in Bangladesh 120; Central
Asia 215, 223; in China 182; China and US 10; as donor and recipient 10–11; in India 141–3; in
North Korea 244; in Pakistan 115; in Sri Lanka 119
foreign policy: approach to 33; assertive 35–36; competing interests 31; economic rationale 28
foreign trade, China and US 10
free rider, China as 27
free-trade agreements (FTAs) 16, 191
Fukuda, Yasuo 254, 256, 257

Gates, Robert 90, 99, 261

Gemba, Koichiro 261
General Security of Military Information Agreement (GSOMIA) 21, 276, 277
geopolitical disputes, Southeast Asia 52
Gillard administration 170–1
Gillard, Julia 169, 171
global commons 88–9
global financial crisis (GFC) 88, 141, 182; effects of 25
global security regimes 140
Global Times 66–7
gross domestic product (GDP) 7–8; international comparisons 8, 9, 252; per capita growth 14–5;
planned growth 215; projected growth, China and US 11
Gwadar 115–6, 146

Hagel, Charles (Chuck) 100

Hambantota port 148
Hasina, Sheikh 112, 119, 123
Hatoyama, Yukio 254, 256, 257–8
hedging strategy 71–2, 76, 207; Australia 163–4, 172–4, 176; Japan 270
hegemony 15, 30
Howard administration 167
Howard, John 273
Hu Jintao 29, 77, 115, 119, 167, 257
Huangyan/Scarborough Shoal incident 186–7
Huawei Technologies 143
hyperrealism, Indian perceptions 151

imbalance of power 204–5

Impeccable incident 34, 206
inclusive institutional balancing 187
India: deployment 154–5; infrastructural development 142–3; international relations 152–3; military
capabilities 153–5; military modernization 146; military rebalance 96; regional relationships 153;
relations with China 112–3; relations with Japan 256
India–China rivalry 148
Indian Navy: Perceived Threats to Subsurface Deterrent Capability and Preparedness 146
Indian Ocean 146–7
Indian perceptions: border dispute 147; Chinese power and ideational capacities 139–40; economic
impact 141–3; growth of Chinese power 149–40; hyperrealism 151; impact of Chinese power
140–7; India’s regional standing 147–8; military capabilities 149, 149, 150; military impact 144–
7; Nehruvian School 150–1; neoliberalism 151; pragmatism 151–2; response to China’s increased
power 152–5
indisputable sovereignty 17, 42
individual actors, in regional policy 34
Indo–US security 113
Indonesia: chair of ASEAN 193; military rebalance 96; response to parallel resurgence 208–9
Information Security Agreement (ISA) 274
information technology, military potential 43
infrastructural development, India 142–3
insecure power 28–31
institutional balancing 187–94; ASEAN community 192–94; ASEAN Plus Three (APT) 189–90;
ASEAN Regional Forum (ARF) 187–9; East Asian Summit (EAS) 190–1; Regional
Comprehensive Economic Partnership (RCEP) 191–2; Trans-Pacific Partnership (TPP) 191–2
internal balancing, Australia 172–3, 176
internal stability, Central Asia 226
international institutions, Chinese integration 87–88
international norms, compliance with 231, 232, 234–5
international relations: focus of 4; US dominance 140

Jang Song Taek 244

Japan 21; arms trading 261; Basic Defense Force Concept 259; Diaoyu/Senkaku island group 34,
207, 250, 256; diplomatic concepts 255–6, 255; embargo of rare earth exports 35; foreign policy
254–9; international relations 256; military rebalance 96; National Defense Policy Guidelines
259–0, 270; political malaise 254; re-arming 46–7; relations with China 46; relations with US
260, 261, 262; response to ASB 57; security concerns 95–6; security partnerships 260–1; Sino-
Japanese tit-for-tat arming relationship 52; troop deployment 270; see also security dynamics
Japan–Australia bilateral security cooperation 21–2
“Japan-Australia Joint Declaration on Security Cooperation” 256, 273
Japan–Australia security cooperation 272–4; Action Plan 273–4; joint operations 273
Japan–China Joint Statements 256, 257
Japan–China, military spending 252–3, 253
Japan–China relations: arc of freedom and prosperity 256–7; balance of power 258–9; China-in 257–
8; China-out 258–9; defense 259–60; economic power 250–2; internal/external balancing 262;
Japanese foreign policy 254–9; military relations 252–4; mutually beneficial relationship 257–8;
power balance 250–4; power superiority 250; tensions 249; trade 251; value-oriented diplomacy
256–7
Japan Self Defense Forces (JSDF) 57
Japan–South Korea bilateral security cooperation 21–2
Japan–US–Australia security cooperation 272–3; joint operations 273; lessons and policy
recommendations 274–7
Japan–US–South Korea trilateral security cooperation 21, 272
‘Joint Declaration on Direction of Bilateral Relations’ 115
Joint Defense Agreement 203
“Joint Statement towards Japan-India Strategic Partnership” 256

Kan, Naoto 254, 258

Kapoor, Deepak 112–3, 149
Karzai, Hamid 111, 117
Kayani, Ashfaq 122
Kazakhstan 217
KazMunaiGaz (KMG) 221
Keating, Paul 175
Khan, Yahya 114
Kim Jong II 242–3, 244
Kim Jong Un 242
Kissinger, Henry 15
Korea: Chinese unilateralism 232; context and overview 231; international norms 231, 232, 234–5;
summary and conclusions 245; see also North Korea; South Korea
Korea–China military strategic dialogue 233–4
Korea–U.S. Free Trade Agreement (KORUS) 91
Korean peninsula 20–1
Korean unification 232, 237, 276
Kumaratunga, Chandrika 119
Kyrgyzstan 217

land, demand for 224

Lavrov. Sergei 122
Layne, Christopher 182
Lee Hsien Loong 207
Lee Myung-bak 269, 272
Li Keqiang 75, 191, 238
Liang Guanlie 77, 122
Liaoning (aircraft carrier) 13, 43, 214
liberalism, view of rise of China 27
Liberation Tigers of Tamil Eelam (LTTE) 118–9, 148
Limited Local Wars under Conditions of ‘Informatization’ 43–4
Loans for Oil 223
Local Wars under Conditions of Informationization 56
Locklear, Samuel J. 90
logistics, Central Asia 222–3

Malacca dilemma 113

Malaysia, military rebalance 96
marching westwards strategy 76–7
maritime cooperation fund 185
maritime disputes 15, 188, 194, 205; see also territorial disputes
maritime power 150
maritime security 45–6
maritime surveillance 35
media: control of 33; role of 32–3
Mehta, Sureesh 146
Mes Aynak copper mine 220
military buildup: context and overview 42; modernization 42; possible applications 44–5; regional
arms race 47–4; regional capabilities 53–4; regional concerns 45–7; regional re-arming 46; US
response 54–8; weapons replacement 53
military capabilities 11–4, 207, 250; ASEAN views of 182–3; Australia 173; Central Asian
perceptions 217–21; India 153–5; Indian perceptions 144–7, 149, 149, 150
military commissions, North Korea 242–3
military cooperation: Central Asia 217–21; security dynamics 275–6
military exercises: bilateral/multilateral 218; India 152–3; Japan 260; joint operations 276
military involvement, in North Korea 241–2
Military Operations Other Than War (MOOTW) 218
military relations: with Australia 171–2; Japan–China 252–4
military space capabilities 149
military spending, Japan–China 252–3, 253
military strength 11–2; air forces 12; ground forces 11; regional concerns 17
military-to-military (M2M) programs 214, 218, 223
Ministry of Commerce (MOFCOM), reactions to Trans-Pacific Partnership (TPP) 74
Ministry of Foreign Affairs (MFA), reactions to Trans-Pacific Partnership (TPP) 74
Mischief Incident 186, 188
Missile Technology Control Regime (MTCR) 140
Mullen, Michael 90
multilateral cooperation 87–8
multilateral institutionalism 205
multipolarity 185
Musharraf, Pervez 114–5
Myanmar, military rebalance 96

Nathu La trade route 120

National Intelligence Council report 26
national power, modern concept 6
nationalism 29, 33, 36; costs of 225–6
NATO, regional influence 218
naval forces, China, US and Japan 13
naval necklace 113
Navy 13; forces, China, US and Japan 13
Nehruvian School 150–1
neoliberalism, Indian perceptions 151
Networked, Integrated Attack-in-Depth 55
New Great Game 20
New Security Concept 233
New Silk Road 215
New Zealand, military rebalance 96
Noda, Yoshihiko 254, 258–9, 260–1
non-interference policy 216, 243
North Korea 20–1; aid to 240; China’s military involvement 241–2; China’s policy 238–40; Chinese
aggressiveness/assertiveness 231; Chinese frustration 238–9; Chinese influence 243–5;
diplomatic engagement 241; free trade area 244; implications of China’s rise 243–5; military
commissions 242–3; perceived threat 69; reforms 244–5; special relationship 240–3; see also
Korea
North Korea Fund 244
Northeast Asian Free Trade Agreement 210
Northeast Project 233
Northern Distribution Network (NDN) 216
Nuclear Non-Proliferation Treaty (NPT) compliance 115
Nuclear Suppliers Group (NSG) 140
Nye initiative 270
Nye, J. 4, 76

Obama administration 18, 20, 54, 85, 86–8, 202, 206–10; trade and investment 90–1; see also US
rebalancing, China’s view of
Obama, Barack 102–3, 269; visits to China and Asia 89–90
offensive realism: criticisms of 27; view of rise of China 26
Official Development Assistance (ODA) 249, 260–1
omni-enmeshment 201–2
On Protracted Warfare 6
one plus tactic 34
open regionalism 91
outward direct investment (ODI) 4, 45
overseas direct investment (ODI) 10–1

Pakistan 121; case study 114–6; international relations 122; relations with China 111, 112, 113, 148,
214
Panetta, Leon 73, 90, 261, 270
Paracel and Spratly Islands 42, 44, 45, 186
parallel resurgence: context and overview 199–200; diplomacy 206–7; economic factors 209–10;
limitations of strategies 204–6; military factors 207–9; pivot toward Asia 206–10; policy context
200–6; regional security 207–9; strategies to manage great powers 200–4; summary and
conclusions 210–1; see also ASEAN responses
Partnership Dialogue, US-Bangladesh 123
Peace Mission 218
peaceful containment 72
peaceful development path 30, 77
peacekeeping 31
People’s Armed Police (PAP) 218, 219
People’s Daily 73, 76
People’s Liberation Army’s PLA: air forces 13, 43, 44, 145; bilateral/multilateral exercises 218–9;
budget 11; double construction transformation 44; exercises 70; increased capabilities 145–6;
Navy 13, 43, 44, 145–6; operational doctrine 43–4; role in security policy 31–2; strategic
priorities 55–6; see also military buildup
peripheral South Asian (PSA) states, power balance 18–9
periphery diplomacy 33
PetroKazakhstan 221
Pew Research Center 14, 26
Philippines: military rebalance 96; relations with China 34–5, 46, 186; response to parallel
resurgence 208–9; US military presence 188
pivot toward Asia 20, 33, 42, 54, 195, 206–10, 265, 271; see also US rebalancing, China’s view of
post-unipolarity 182–3
power-as-resources approach 3
power balance 18–9; Japan–China 250–4
power capabilities, perceptions of 14–7
power, defining 3
power, historical perspective 5–7
power relations, China and US 15
power transition theory 26–9
pragmatism 28–9; Indian perceptions 151–2; security dynamics 277
predatory policy 224
Prevention of Arms Race in Outer Space (PAROS) 139
public opinion 32–3, 36; Australia 166–7, 171, 175; China’s international position 67–8; rise of
China 29; South Korea 234, 237–8, 268; of United States 70
Putin, Vladimir 122, 216

Qing dynasty, defeat of 6

Qinghai–Tibet Railway 144
Qu Xing 73

Rahman, Ziaur 119

railways 144–5, 222; Qinghai–Tibet Railway 144
Rajapaksa, Basil 123
Rajapaksa, Mahinda 111–2, 118
rapid war, rapid resolution 43–4
rare earth exports embargo 35
rebalance, origin of term 86
rebalance to Asia 18, 30, 33, 42, 54, 195, 206–10, 265, 271; AirSea Battle ASB concept 57;
implementation 89–97; India’s view of 153; see also US rebalancing, China’s view of
Regional Anti-terrorist Structure (RATS) 218, 223
regional architecture 203–4
regional arms race 47–54
regional assertiveness, China 88
Regional Comprehensive Economic Partnership (RCEP) 75, 181, 191–2, 210
regional economic model, Central Asia 226
regional multilateralism 185
regional policy, individual actors 34
regional re-arming 46
regional relationships 148
regional security 121–2; approach to 33; Australia 174; Central Asia 223–6; China’s approach to 28;
concerns 200; Japanese approach 260–1; parallel resurgence 207–9
regional security alignments 30
regional security concerns 95–6
regional strategic equilibrium 111
regional tensions, attempts to reduce 121
Reliance Power 141–2
reluctant realism 249
research and development 45
resonant diplomacy 257
Rice, Susan 78
rise of China: Chinese analytical perspectives 29; concerns 26–8; context and overview 25–6;
domestic drivers 31–3; expectations 26–8; impact of 27–8; insecure power 28–1; public opinion
29; regional constraints 33–5; summary and conclusions 35–6
risks, to Chinese 30
Roh Moo-hyun 268
Rudd, Kevin 167–8
Russia: arms sales 219; in Central Asia 216; influence 214; military cooperation 217–21; in South
Asia 122

sanctions, North Korea 238–40

Sanya submarine base 146
Scarborough Shoal 34, 100, 186–7, 208
security alignments 30
security architecture 225
security declarations, Australia 174
security dilemma 53; trilateral 205
security dynamics: approaches to North Korea and China 280; bilateral alliances 279; bilateralism in
trilateralism 274–5; bridging role of US 271–2; China factor 266–7; context and overview 265;
cooperation 275; deterrence 276–7; information sharing 275; Japan–Australia security
cooperation 272–4; military cooperation 275–26; military training and exercises 281; North
Korea 266; policy towards China 278; trilateral cooperation 272; US–Japan alliance 269–71; US–
ROK alliance 267–9
security engagement 94–7; regional concerns 95–6
security partnerships, Japan 260–1
Senkaku fishery boat collision 258
Senkaku Islands 34–5, 100, 207, 256
Shanghai Cooperation Organization (SCO) 139–40, 215, 217, 218, 220, 223–5
Shangri-la dialogues 33, 77
Singapore, military rebalance 96
Singh, Bikram 123
Sino–Indian relations 121
Sino–Indian–US–Pakistani security complex 121, 122
Sino-Japanese tit-for-tat arming relationship 52
Sino-Japanese war 6
Sino–US cooperation, against terrorism 116
Sino-US relations 30, 32–3, 46
Sinopec 221
socialist market economy model 215
soft power influence 33
Song dynasty 5–6
Songhua River 239
South Asia: indo-centrism 113; international relations 122; links with China 111; regional
relationships 121–4, 125; regional tensions 121
South Asia policy 19
South Asian Association for Regional Cooperation (SAARC) 120
South Asian responses: Afghanistan 116–8, 121; Bangladesh 119–20, 123; case studies 114–20;
China–Indian–US ‘pivot’ dynamics 120–4; key points 125–6; Pakistan 114–6, 121, 122; Sri
Lanka 118–9, 122–3
South Asian responses, context and overview 111–3
South China Sea 88–9; China’s attitude 207; regional concerns 186–7; security dynamics 276–7; US
interests 207; US intervention 70–1
South Korea 20–1; concerns 232–4; Exclusive Economic Zone EEZ 233–4; military rebalance 96;
mistrust of China 232–3; partnership relations with China 234; perceived security threats 238;
perceptions of China’s rise 236–8; re-arming 47, 52; US–ROK alliance 267–9; see also Korea;
security dynamics
South Korea–China strategic/defense dialogue 269
South Ossetia 218
Southeast Asia 20; economic crisis 189; geopolitical disputes 52; strategic interests 44–5
sovereignty 17, 34, 42, 44, 98, 100–1
special relationship, North Korea 240–3
Spratly Islands 42, 44, 45, 186
Sri Lanka: case study 118–9; international relations 122–3; relations with China 111–2, 113, 148
State Oceanic Administration 35
state-owned enterprises (SOEs) 214, 215–6; Central Asia 221–2
Strategic and Economic Dialogue (S&ED) 67, 97
Strategic Defence and Security Dialogue, US/Vietnam 208
strategic flexibility 268–9
strategic lines of communication (SLOCs), security of 45–6
strategic pivot 72–3
Sun Zi 5
Sunnylands summit 102
superpower 14–5
suspicion, US-China 26

Taiwan 17, 28, 42; arms race 47; US arms sales 33, 69
Taiwan Strait crisis 55, 270
taking-sides dilemma 183–4
Taldy-Bulak Levoberejny gold mine 224
Tamil separatism 118–9
taoguang yanghui strategy 25, 29, 35
technological advances, defense related 3
technology transfer, Central Asia 223
territorial disputes 27–8, 42, 44, 95–6, 100–1, 186–7, 188, 194, 205, 250; approach to 36;
Bangladesh–Myanmar 120; Indian perceptions 147
terrorism, Sino–US cooperation 116
Thailand, military rebalance 96
Thucydides Trap 78
Tibet, Chinese presence 144–5
tipping point 17
tit-for-tat arms acquisitions 52–3
trade: with ASEAN 182–3; with Australia 166, 169–70; growth 8–9; with India 141–2, 141; Japan–
China 251; with South Korea 233; US/China and Asia-Pacific countries 92, 93
trade expansion, US 90–1
Trans-Caspian pipeline 222
Trans-Pacific Partnership (TPP) 74–5, 91, 191–2, 209–10
transparency 97
transregional economic integration 215
Treaty of Amity and Cooperation 85, 188, 207
Treaty of Friendship and Cooperation (China-North Korea) 241
Treaty of Friendship and Cooperation (China-Pakistan) 115
trilateral consultation mechanism 225
trilateral cooperation 272–4
trilateral security dilemma 205
troop deployment: Japan 270; United States 54, 94–5, 95, 271
trust 102; of China 166, 168–70, 232–3
Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI) 222
Turkmenistan–China natural gas pipeline 221
Twelfth Five-Year Development Plan (2011–2015) 222

UN Resolution 2094 239

unipolarity 181, 185
United Nations Convention on the Law of the Sea (UNCLOS) 88
United States: alliances 68; arms sales to Taiwan 69; and ASEAN Plus Three (APT) 189–90; ASEAN
Regional Forum ARF 187–9; Asian regional strategy 86–7; Cheonan sinking 234–5; China’s
relations with 30, 32–3; direct investment 91, 94; foreign aid 94; global priorities 85–6;
hegemony 204; ideational dominance 140; military cooperation 68, 69–70; military exercises 69–
70; military presence 188, 207–8, 261; pivot toward Asia 18, 30, 33, 42; policy framing 102;
private security 224; as regional security guarantor 207–8; relations with Australia 167, 173–4;
relations with Japan 258, 260, 261, 262; response to military buildup 54–8; resurgence see
parallel resurgence; security alliances 202–3; security dominance 202, 204–5; security role 89; in
South Asia 122; supremacy of 21; trade 8–9; trade expansion 90–1; troop deployment 54, 94–5,
95, 203, 208, 271; unilateral diplomacy 192–3; see also security dynamics
US alliances 21–2
U.S.–China military cooperation 97–8
U.S.–China relations: attempts to improve 67; cooperative vs. confrontational approaches 77–8;
managing competitive aspects 103
U.S.–China relations, implications of rebalancing: Chinese complaints 99–100; Chinese perceptions
97–101; Chinese schools of thought 98–9; diplomatic engagement 89–90; economic engagement
90–4; explanations of regional strategy 97; implementing rebalance 89–7; military rebalance 96;
security engagement 94–7
U.S.–China Strategic and Economic Dialogue (S&ED) 87
US–India relations 152–3
US–Japan alliance 269–71
U.S.–Japan–China strategic triangle 205
US Pacific Command 95
U.S.–Philippines Mutual Defense Treaty 72–3
US rebalancing, challenges of 101
US rebalancing, China’s view of: arms sales to Taiwan 69; context and overview 65; development
68–2; hedging strategy 71–2; initial reactions 66–8, 67; long view 76–7; strategic pivot 72–3;
strategic responses 71–2; structural contradictions 75–776; Trans-Pacific Partnership (TPP) 74–5;
US criticism of 78; US intervention in South China Sea 70–1; US military exercises 69–70; US
strategic guidance 75–7; see also U.S.–China relations, implications of rebalancing
US–ROK alliance 267–9
USAID 94
USNS Impeccable 42
USPACOM 13–4
Value-oriented diplomacy 256–7
Vietnam: military rebalance 96; relations with China 46; response to parallel resurgence 208–9
vulnerability, Chinese 30

Wang Fan 76
war on terror 192–3, 202–3, 268
Wen Jiabao 119, 120, 222, 235
white papers, peaceful development path 77
Willard, Robert F. 90

Xi Jinping 14, 34–5, 78, 102–3, 182, 238

Xinjiang province 222

Yang Jiechi 71, 89, 182

Yang Jiemian 74
years of humiliation 6, 15, 33–5
Yellow Sea 236
Yeonpyeong incident 267, 269
Yeonpyeong Island 232
yousuo zuowei strategy 29

Zardari, Asif 111, 115

Zia, Khaleda 119–20, 123