China's Strategic Dilemmas in East Asian Policy and Future Prospects

Since proclaiming "peaceful rise" (和平崛起) in 2003, China has become the world's second-largest economy, surpassing Japan in GDP by 2010, and is set to transition to a new fifth-generation leadership in the latter half of this year. The regional order that East Asian nations will face will vary significantly depending on the strategic path chosen by China's next leadership. In light of this, the East Asia Institute (EAI) invited Professor Tung-Chieh Tsai of National Chung Hsing University, Taiwan, to host the 28th Smart Talk Forum on August 20, 2012, on the topic "China's Strategic Dilemmas in East Asian Policy and Future Prospects" (中國對東亞區域政策之戰略困境與可能選項). Professor Tsai explained China's current East Asian policies following its rise (中國崛起) and the strategic options available to China after the 2012 leadership transition, followed by a Q&A session with the discussants. The main discussion points are as follows.

China's Rise

○ Largest Administrative Area in History: While many believe the territories of the Han, Tang, and Qing dynasties were larger than present-day China, considering territory as sovereignty, or "intact control of land," present-day China, with the largest administrative area, can be seen as possessing the largest territory in history. Taking Tibet as an example, the relationship between China and Tibet during the Qing dynasty was not one of rule but a "harmonious" (穩定) relationship, and Tibet can be considered to be under the rule of present-day China for the first time in history.

○ Changes in the International Environment: China's rise was enabled not only by its own efforts but also significantly by the following changes in the international environment.

1) The détente of 1972 provided an opportunity for China to escape the burden of adopting a "two-front strategy" (兩條線戰略) due to its simultaneous confrontation with the two hegemonic powers, the United States and the Soviet Union. The impact of Deng Xiaoping's reform and opening-up policy in 1978 was immense, but it should be viewed as a change initiated by the external environment rather than solely Deng Xiaoping's choice.

2) During the 2003 Iraq War, the United States, aiming to concentrate on the Middle East through a "selective strategy," desired peace in East Asia. This U.S. stance facilitated the smooth commencement of the Six-Party Talks, demonstrating U.S. reliance on China for maintaining peace in the region at that time.

3) Japan, China's biggest rival in the region until 2006, has seen its prime minister change approximately once a year since Prime Minister Koizumi. This political instability in Japan has provided a significant opportunity for China.

4) The 2008 global financial crisis, which inflicted considerable damage on the United States and European countries, also contributed to President Hu Jintao being recognized as one of the world's most influential leaders.

China's East Asian Policy

Short-term, Mid-term, and Long-term Policies

○ Short-term: In the short term, China aims to strengthen cooperation with East Asian countries and thereby weaken U.S. influence in the region.

○ Mid-term: Foreign exchange reserves are the foundation for enhancing China's influence. Particularly after the global financial crisis, they have played a decisive role in elevating China's status as a "regional and global financial center." In the mid-term, China's policy direction is to first lead financial flows on the international stage and then expand its influence into the political sphere.

○ Long-term: The core of long-term policy lies in 1) whether China can realize and sustain a "China-style system" for an extended period, and 2) how China will prepare for the diversification of its foreign policy domains—political, economic, and military—as the expansion of the "regional transportation network" broadens the scope of issues it must address.

External Variables

○ External variables that could influence China's future East Asian policy include: 1) U.S. policy, which is building a containment network against China through bilateral and multilateral measures; 2) Japan's actions, which may frequently clash with China due to domestic political instability; 3) The policies of Southeast Asian nations, which are strengthening alliances with Indian and Pacific powers; 4) The trajectory of the global financial crisis, which presents both opportunities and challenges for China; and 5) Regional nationalism.

Internal Variables

○ Legitimacy Issue: Legitimacy is the foundation of political stability, making it a crucial factor in determining the future direction of China's foreign policy. Many viewed the period after Deng Xiaoping's death as the "Post-Deng Era," but since Jiang Zemin and Hu Jintao were leaders appointed by Deng Xiaoping, the true Post-Deng Era can be considered to begin with the upcoming fifth-generation leadership. Therefore, securing a foundation of legitimacy for the new leadership centered around Xi Jinping in the Post-Deng Era is a challenging task that the next leadership must address.

○ Social Issues: Currently, the population of unmarried and unemployed individuals in Chinese society exceeds 20 million. This signifies the existence of a large group within society whose basic needs are unmet, posing a potential factor for social unrest.

○ Limitations of Chinese-Style Democracy: China emphasizes pursuing "positive and qualitative change to overcome inefficiency in the economy while maximally restraining change in the political sphere" (政左經右). However, in reality, maintaining this long-term is nearly impossible. As a prime example, the Chinese Communist Party governs based on the fundamental ideology of "anti-class" (反階級) and "dictatorship of the proletariat" (無產階級專政), yet in contemporary Chinese society, groups referred to as the wealthy and the second generation of the wealthy (富二代) are emerging as a new class. The gap between the Party's ideology and actual social reality is the most serious problem facing Chinese politics. This issue can only be resolved if diverse voices within society are allowed to be expressed, which necessitates China abandoning its one-party dictatorship and embarking on the path of democratization.

○ People's Liberation Army (PLA): Prior to the 18th National Congress in 2012, there were movements within China to completely remove the military's influence from the political stage. However, as China became involved in various disputes with neighboring countries, national security emerged as a serious issue, leading to the entry of some military officials into the political arena. This signifies that the military has not yet been completely subdued politically.

Conflict Zones Involving China

○ North Korean Issue: Ultimately, the North Korean issue will be difficult to resolve unless North Korea undertakes comprehensive economic reforms itself. However, reforms inevitably lead to issues of power redistribution, making it unlikely that Kim Jong-un will attempt reforms more groundbreaking than those attempted by Kim Jong-il.

○ Senkaku/Diaoyu Islands Dispute: For China, the Senkaku/Diaoyu Islands dispute is a matter of competition with maritime powers in the Western Pacific, and it is expected to become more serious over time. If China can assert its position on the Senkaku/Diaoyu Islands issue, it will gain an advantageous position in resolving other issues concerning the island regions of the Western Pacific.

○ South China Sea: The South China Sea issue, which has been increasingly highlighted recently, involves sharply conflicting interests among various nations.

○ Sino-Indian Border Dispute: China and India have experienced border disputes for a long time. In particular, border disputes have persisted since India significantly increased its troop presence in border areas near the Himalayas in 2010. As this region borders Tibet, China cannot help but respond sensitively.

○ Western Pacific Issues: The Western Pacific refers to the relatively narrow area extending from the Yellow Sea in Korea to the East China Sea. However, as it is a heavily trafficked region, there is a possibility of conflict between China and the U.S. over this area.

○ Cross-Strait Relations: If the Kuomintang (KMT) continues to hold power in Taiwan, the cross-strait issue will remain in a state of status quo.

○ It is undesirable for China to take military action in these East Asian conflict zones for the following reasons: 1) Since there are few areas in East Asia where the U.S. is not involved, conflicts in East Asia can easily escalate into Sino-U.S. conflicts. 2) Even excluding U.S. military power, the military capabilities of East Asian countries are quite high, meaning that military action could result in severe damage to all involved parties. 3) As no war has broken out in East Asia for nearly half a century, regional countries are sensitive to conflict and are bound to perceive military actions as highly threatening.

Future Scenarios for China's East Asian Policy

○ Contemporary international relations theories originate from the history and traditional problem-solving methods of Western countries. There is room for doubt regarding the applicability of Western international relations theories to the realities of East Asia, which has a different history and tradition. Furthermore, current international relations theories are largely limited as they were developed in the pre-global era. Meanwhile, China has its own unique methods for dealing with regional issues that have been maintained for over a thousand years. As China continues to rise and reaches a level of global leadership in terms of capability and influence, it is likely to pursue policies based on its own traditions.

○ Scenario A: A leader's legitimacy is closely related to their approval ratings. In democratic countries, legitimacy stems from institutions. While institutional efforts to build legitimacy may sometimes be supplemented by the use of hard power, such as conflicts with neighboring countries, China, which cannot secure legitimacy from institutions in the first place, is more likely to choose policies that increase approval ratings by taking more aggressive actions against neighboring countries. In this context, China may adopt policies to secure political legitimacy through conflicts with neighboring countries, which represents the most assertive form of policy from China's perspective.

○ Scenario B: True legitimacy comes from within the nation; therefore, even if external conflicts are used to secure legitimacy, it will ultimately face limitations. Consequently, legitimacy must ultimately be secured by resolving numerous internal issues. In this context, the Chinese government may seek to create a stable external environment to focus on resolving domestic problems, thus potentially pursuing a more conservative and cooperative (協調) East Asian policy than its current one.

○ Scenario C: As a relatively passive policy, China may approach East Asian issues on a case-by-case basis without establishing an overarching grand strategy. In such cases, it would prioritize issues based on their importance and attempt to resolve them accordingly (treating a headache by treating the head, treating foot pain by treating the foot). China's stance on the North Korean issue exemplifies this approach.

○ Scenario D: The most passive policy would be to act according to Lao Tzu's saying, "Doing nothing is doing everything" (無為而無不為). China's response to issues in Southeast Asia serves as a typical example of this approach.

○ Currently, China is operating its policies somewhere between Scenarios A and B. It is highly likely that China will opt for a more assertive foreign policy in the next 1-2 years. This is because while Jiang Zemin and Hu Jintao could secure legitimacy derived from Deng Xiaoping's endorsement, this is not the case for Xi Jinping. Given the current domestic political situation in China, Xi Jinping's chances of securing a second term appear low. Therefore, Xi Jinping is likely to pursue more aggressive policies in East Asia to maintain power, and the specific manifestations of this will become apparent within the first two years of his tenure. ■

Presenter

Tung-Chieh Tsai, Professor at National Chung Hsing University, Taiwan, holds a Ph.D. in Diplomacy from National Chengchi University, where he also earned his Master's degree. His primary research interests include the history of international relations, contemporary Chinese foreign policy, changes and developments in the East Asian structure, research on Third World development issues, and cross-strait relations. His representative works include "Q&A on the History of Modern Diplomacy" (近代外交史Q&A), "A Comparison of Democratization in Taiwan and Mexico" (台灣與墨西哥民主化之比較), "History of Western Diplomacy" (西洋外交史), and "History of Chinese Diplomacy" (中國外交史). He currently serves on the editorial boards of "The Chinese Journal of Political Science" (政治學報) and "Ming Hsin Journal" (明新學報).

Moderator

Lee Dong-ryul, EAI China Panel Chair; Professor at Dongduk Women's University

Discussants

Kim Ae-kyung, Professor at Myongji College

Park Byung-kwang, Senior Researcher at the Institute for National Security Strategy

Lee Jeong-nam, Research Professor at the Asiatic Research Center, Korea University

Joo Jae-woo, Professor at Kyung Hee University

Han Seok-hee, Director of EAI China Center; Professor at Yonsei University