China ushered in the year of the rabbit in a buoyant mood. Prices of high-end commodities rose sharply – not, it seems, because of a spike in food prices, but because there are so many people with spare cash to spend. Internationally, meanwhile, China’s rapid recovery from the global financial crisis, its successful test of the J-20 stealth plane, and the achievements of its athletes and artists have all served to create an image of China as the power to emulate in much of the world.
This optimistic mood has been reflected in China’s increasingly assertive behaviour on the international stage. China has moved from being a rule-breaker in the 1950s – one trying to overturn the world order – to a rule-maker in the 21st century, seeking to modify the world order in ways meant to ensure its continued prosperity. And, while there are certainly similarities between the two periods, there is also a crucial difference – China now has the economic and military power to back up its aspirations.
As is to be expected when a state gains power rapidly, the international community has reacted to China’s rise with a mix of envy and fear, as well as admiration. Beijing hasn’t been shy about taking advantage of its new clout – and most states have been quick to comply. Last September, for example, the Japan Coast Guard took a Chinese fishing boat captain into custody after his vessel rammed two of its ships. Beijing demanded – and got – his release. Among the pressures Beijing brought to bear were a cessation of rare earth exports to Japan (since resumed on a reduced basis); subjecting Japanese exports to agonizingly slow inspection procedures at customs checkpoints; and the arrest of several Japanese nationals – all enough to pressure Japan to comply with its demands. Just to be sure, China also announced that henceforth its own ships would patrol the areas near the disputed Diaoyu/Senkaku islands, which are claimed by China but held by Japan.
It’s not only Japan that has fallen foul of China’s assertiveness. Beijing has forbidden Vietnamese fishermen from entering an area it contests jurisdiction over, and has also become more active in pressing its border disputes with India. Indeed, Indian analysts saw a coded message for their country when, two days before Chinese Premier Wen Jiabao was to arrive in New Delhi, Gen. Lo Yuan stated that China must recover territories ‘looted’ by its neighbours.
Citing the disconnect between the Chinese having the second highest gross domestic product in the world and what he termed the as yet unresolved issue of national unification, Lo also implicitly questioned the wisdom of his country’s declared policy of a peaceful rise: ‘some people like to resort to peaceful means to solve all questions (but) we have to think of potential dangers in times of peace…Some army personnel are becoming slack (and) too accustomed to this comfortable pacifism.’
Meanwhile, although there is some dispute over whether China formally claimed the South China Sea as a core interest last March, China’s conduct since then has reinforced the view of those who believe it did. Certainly, the country’s blogosphere has enthusiastically endorsed the claim. In response, US Secretary of State Hillary Clinton took the opportunity at the annual meeting of the security forum of the Association of Southeast Asian Nations (ASEAN) in July to state that freedom of navigation on the South China Sea was a national interest of the United States, as was the peaceful resolution of disputes.
Chinese Foreign Minister Yang Jiechi reacted by leaving the forum. Upon returning, he accused Washington of plotting against China and announced to ASEAN that ‘China is a big country and other countries are smaller countries, and that’s just a fact.’ This was not the first time Yang had stormed out of a meeting – he did so angrily at a meet a few months earlier when his Japanese counterpart raised the issue of China’s nuclear arsenal.
But with the anger has also come charm. Beijing has been astutely investing in cash-strapped countries all over the globe, building roads, investing in failing mines, and pledging low-cost loans for development in Africa and Latin America. In addition, it has stepped in to help European nations still reeling from the financial crisis. The slide of the euro has enhanced the attractiveness of investment there, with the so-called Poor Four becoming major beneficiaries of China’s largesse. China bought €400 million of 10-year Spanish bonds, and China Power International has negotiated for a stake in its Portuguese counterpart EDP. The huge state-owned China Ocean Shipping Company, meanwhile, has obtained a 35-year lease in the Greek port of Piraeus; in Ireland, Athlone has been chosen as the location for construction of a major exhibition ground and entry point for Chinese goods bound for the European market.
This is not all. Italian Prime Minister Silvio Berlusconi bathed the Coliseum in red light and superimposed the characters for ‘Chinese-Italian friendship’ on its walls to honour the visit of his Chinese counterpart. In return, Wen promised a 15 percent increase in Chinese investments. Wen even scored a victory in Germany, the success story of the euro block: Chancellor Angela Merkel promised that she would, within the next five years, support China’s designation for market economy status (MES) by the European Union. There is, as economists are reputed to say, no free lunch. MES status compounds the difficulties of levying anti-dumping duties on China and of charging it with forced technology transfer. Countries receiving Chinese help are also expected not to challenge Beijing in its reluctance to revalue the yuan, thus keeping Chinese exports inexpensive and its favourable balance of trade wide. They are also expected to mute their criticisms of the country’s human rights record, as well as to not challenge its positions on Taiwan, Tibet, and a host of other issues. In addition, China has put pressure on European countries to lift their arms embargo against it.
Countries who don’t respect Beijing’s wishes can expect some kind of retaliation. Norway, for example, was threatened with the loss of economic contracts after the Nobel Prize Committee awarded the 2010 peace prize to jailed democracy activist Liu Xiaobo. China also made known that it expected other countries to boycott the award ceremony, a request a number of countries complied with.
It hasn’t just been smaller countries with which China has been flexing its diplomatic muscle. China has also taken on the United States, harassing its ships in what Washington asserts are legitimate activities in international waters, behaving disrespectfully toward President Barack Obama at the Copenhagen climate summit, testing the J-20 stealth fighter during Defence Secretary Robert Gates’ visit to Beijing last month, and, in the opinion of many (including legions of patriotic Chinese students) arranging to have a piano piece that commemorated Chinese victories against US troops during the Korean War played at a White House dinner in honour of President Hu Jintao’s visit.
Yet most countries still face a dilemma when deciding how to respond to heavy-handed Chinese behaviour. They value their market ties to China and want to continue to share in the country’s rising prosperity. But they also fear that their economies will be incorporated into the Chinese juggernaut and will see their international manoeuvring space constricted. Refusal to comply may simply arouse Chinese hostility and hasten their decline.
In any case, defence budgets in many Asia-Pacific states have risen markedly in recent years, while defence and diplomatic contacts among those concerned about China’s rise have also increased. The United States, South Korea, and Japan have held defence talks despite Chinese warnings that doing so would intensify confrontation. More interestingly, and in a startling departure from past practice, long-time antagonists Japan and South Korea sent observers to the bilateral military exercises that the other held with the United States. Although the Japanese prime minister came to office last year vowing to improve ties with China and to leverage the United States out of its bases on Okinawa, ties with the People’s Republic have worsened, and Japan’s new National Defence Programme Outline calls for closer ties with the United States as well as with Australia and South Korea. India, for its part, has enhanced its defence ties with Indonesia, the United States, Japan, and Australia.
All this has prompted a view of a bullying China perhaps best encapsulated by an unflattering fairytale comparison – Rumpelstiltskin, the unlovable Brothers Grimm character who stamped his foot angrily when he didn't get his way. In the fairy tale, Rumpelstiltskin’s temper led to him destroying himself, and correspondingly there are some voices in China who have begun to question whether the country’s recent aggressive posture may not be scaring a counter-coalition into existence before the country is strong enough to deal with it.
While some may counsel caution, others are just as likely to argue that since these policies have so far been largely successful, there is no reason to abandon them. But whether or not these policies can continue to be successful in the face of so many domestic and external pressures remains an open question.
With this in mind, it might be wise for Beijing to consider whether the rewards of continuing its assertive foreign policy are worth the risk that China will, like Rumpelstiltskin, invite its own failure.
June Teufel Dreyer is a professor of political science at the University of Miami. She was previously Chief Far East Specialist at the Library of Congress and was Asia Adviser to the US Navy's Chief of Naval Operations.