Asian nations hitch their wagons to the Chinese star

The world’s attention has been much focused on China’s smooth political transition, especially at the last National People’s Party Congress in March. President Hu Jintao’s power consolidation, the overheating (or not) of the Chinese economy, a possible revaluation of the renminbi, the current fight over textile quotas, an impressive 32 gold medal haul at the Athens Olympics last summer and the spectacular Shanghai Grand Prix earlier this year have all made headlines.

In fact, China’s international prestige has been increasing significantly, assisted by hosting its first-ever Formula One in Shanghai, as well as the Shanghai Tennis Open. There will definitely be a further rise in Chinese nationalism and “prestige-harnessing” in the lead-up to the 2008 Beijing Olympics. In the economic arena, Beijing’s Finance Minister and Central Bank Governor were both invited for the first time to a G-7 dinner meeting in Washington on October 1, 2004. This was due recognition of China’s growing economic clout in trade, investments and finance, while becoming the world’s fourth economic power-house.

But little has been said about Beijing’s “new” diplomacy, especially with regard to its Asian neighbours. Chinese diplomacy has evolved in a sophisticated and active way. China seeks “big power” status regionally, internationally, strategically and diplomatically. Now Beijing’s Asian neighbours are accommodating their Chinese bed mate.

This aspect of Beijing’s increasing prestige, clout and rising nationalism is a crucial factor in China’s current relations with its Asian neighbours, who seem to be standing in awe of a “rising China” in their midst. They undoubtedly hope to extract the greatest benefits possible from such an emerging phenomenon, just as Beijing seeks to reduce any perception of threat that might accompany its rise.

So the present “bed-fellow” relationship between China and its smaller neighbours is premised on a mutually beneficial relationship, which both sides seek to promote and implement. Being “in bed with the panda” has become a pragmatic reality for the region. Chinese “soft power” has also been a key to Beijing’s improved relations internationally and with its neighbours. Of particular importance is the theory in China of a “peaceful rising”, or what is otherwise known as a “peaceful development”, so placating concerns by Beijing’s smaller Asian neighbours, who may fear such a “rising” in their midst.

Mutual perception is all-important in Sino-ASEAN relations. China used to pose two sorts of threats to South-East Asia. From an historical perspective there was the communist threat from Beijing in the 1960s and 1970s, as experienced by Indonesia, Thailand, Malaysia, Singapore, Philippines and Burma (now Myanmar).

On the other hand, Beijing was also perceived as a direct threat in Vietnam in 1979, when Chinese troops crossed the Sino-Vietnamese border to teach Vietnam a lesson over its invasion and occupation of neighbouring Cambodia.

Today, all ASEAN countries embrace unequivocally and acknowledge publicly the “one-China” policy. This is to the detriment of Taiwan, which has not made much headway in wooing the ASEAN countries.

In addition to this historical dimension, South-East Asian countries have lately witnessed another major perception change, from what was termed a “China threat” (in economic, trade, investment, social and employment terms) just two to three years ago, to one of a “benign” China with opportunities (for ASEAN). Three factors have come into play: 

• Beijing’s pragmatic policy of political stabilisation (instead of ideological destabilisation) has been assuring to ASEAN countries; 
• China is now perceived as an opportunity for ASEAN, thanks to Beijing’s political decision to hold up (or not competitively devalue) the renminbi during the 1997-98 Asian Crisis and then to the latest “bonus” of surplus trade, “accorded” to ASEAN countries by Beijing; and
• This shifted - or reduced threat - perception is also due to Beijing’s new, active and emerging “sophisticated diplomacy”, illustrated by the smooth transitions from Deng Xiaoping to the Jiang Zemin-Zhu Rongji team, and then to the present Hu Jintao-Wen Jiabao team. Four areas of Beijing’s present foreign policy “sophistication” would include a less pompous, but more pragmatic foreign policy; its growing economic diplomacy; its thrust towards international integration and finally, a struggle for multi-polarity in the world.

All these areas assure the ASEAN countries of a more “benign China” in its outlook and national strategy, and have helped to reduce the previous “China threat”. China is increasingly being perceived not only as a “benign power”, but also as a responsible actor on the world stage.

Key to this perception shift in ASEAN has been China’s strategic policy of “down-playing ideology, and moving towards pragmatism”, which ASEAN countries have detected in both China’s domestic policies and external relations.

ASEAN countries appreciate the “normalisation” of Beijing’s relations with the region. It is as though, coupled with a greater “sophistication” in its foreign policy and posture, Beijing has deliberately changed its overall strategic engagement with South-East Asia. It has not only abandoned the communist insurgency or war threats of the past, but adopted an active policy of strategic friendship with ASEAN countries. Ideology has been abandoned both domestically and externally, as the vehicle of relations with its neighbours, which has greatly assuaged the fears and concerns of South-East Asian countries.

ASEAN governments and the elite have probably been most impressed by Beijing leaders’ pragmatism in governance, as China seeks to create stability and equilibrium for its own economic and political development. China’s typical slogan of “stability, development, reform” has gone down well with ASEAN leaders, as well as Beijing’s stress on the symbiotic relationship between China’s own internal and external stability.

The unprecedented smooth transition from Jiang-Zhu to Hu-Wen - despite the western Liberals’ charge of China having “no democracy” - was another plus, with the ASEAN elite. The common feeling in South-East Asia is that they can now do business with a more pragmatic generation of Chinese leaders and the “new China”.

As well, Beijing seems intent in pursuing a more active diplomacy around its southern periphery in South-East Asia, including using “dollar diplomacy” and defence co-operation. Beijing’s US$400 million loan to the Philippines (during President Gloria Macapagal Arroyo’s Beijing visit last September and confirmed during Hu’s recent visit to Manila) for a rail link between Manila and Clark (former US airbase) was an incentive for Manila to conclude a defence co-operation agreement with China, although Manila remains Washington’s strategic ally. Manila has since signed an agreement to co-operate in joint oil and gas exploration in the disputed South China Sea Spratley Islands.

Chinese investments in Indonesian oil, gas and power plants will certainly increase further under the Susilo Bambang Yudhyono administration. Jakarta needs foreign investments urgently and Beijing is promising to deliver. Sino-Indonesian relations have undeniably improved since the 1990 normalisation of relations.

The recent signing of the Strategic Partnership Agreement between the two countries in Jakarta on April 24, 2005 is certainly an historical milestone in Sino-Indonesian relations. Thailand is particularly pleased with China’s offer of an “early harvest” agreement on fruit and vegetables in 2003 and Prime Minister Thaksin Shinawatra has even agreed that his brainchild, the Asian Co-operation Dialogue (or ACD), be hosted in Qingdao, China, after holding its first two meetings in Thailand. Bangkok could indeed have become the premier ASEAN capital for Chinese influence.

During last year’s bilateral spat between China and Singapore, there were rumours that the People’s Liberation Army (PLA) had offered to sell Chinese missiles to Malaysia, so allaying the Malay majority’s suspicions of China. Defence co-operation between Jakarta and Beijing has been touted recently too. Beijing has also managed to convince Vietnam to delay its “tourist excursions” to the disputed Spratley Islands, after discreet intervention by the CPC with its Vietnamese counterpart “via the back door”. Vietnam has also signed a similar joint development agreement with China for the Spratleys.

In all cases, Beijing has shown real panache and sophistication in dealing diplomatically with individual ASEAN countries, while promoting the much-touted ASEAN-China Free Trade Agreement (to be in effect by 2010). It has even sophisticatedly “divided to rule” within ASEAN, as illustrated by the recent Sino-Singaporean spat in which Beijing openly favoured and courted Singapore’s ASEAN partners, who seemed just as keen to be courted by the Chinese panda.

Beijing has also been using nationalism and the “glories of the Chinese civilisation” to instil a sense of unity in all its own Chinese nationals and within, the Chinese diaspora in South-East Asia. Although Beijing may acknowledge that rampant nationalism could pose a danger to its own internal stability, it has astutely harnessed it to build a “new” Asian pride, which it hopes could help establish a new Asian system of politics, economics, security and culture within the “ASEAN+3” framework. Beijing ardently hopes this could be transformed ultimately into an East Asian Community under its leadership.

China’s goals and vision in South-East Asia are clear, as, diplomatically, it rivals the US and Japan world-wide and regionally. Moreover it may be again considering ASEAN as its own “Monroe” sphere, as it was during the 400 years of the Chinese tributary system under the Ming-Qing Emperors. South-East Asian countries appear to be playing the Chinese game as they seek to benefit from the rising China.