Country Report: China (June 2021)

  • Danielle F. S. Cohen (assisted by Dong Jiaxin)

In mid-2021, a Chinese analysis assessed the long-lasting impact of former Prime Minister Abe on Sino–Japanese relations. The author lamented the deterioration of Sino–Japanese relations in April, especially due to the Biden–Suga summit, but lay responsibility on Abe and his legacy. Two articles reviewed here evaluated the future of ASEAN centrality and its implications for Chinese regional interests, each bemoaning the decline of this ASEAN principle, in part owing to the divisive “Free and Open Indo-Pacific” strategy, now further advanced by Biden. One article contended that the US trade war against China (composed of a tariff war and a technology war, the latter of which has continued to rage under Biden), has seriously damaged the global economic order and globalization processes. Finally, an article evaluated the Interim National Security Strategic Guidance for clues on the impact of Biden’s early national security approach for Chinese foreign policy. Taken together, these writings point to a deteriorating environment for China, but the articles insist that such growing containment efforts are bound to fail.

Sino–Japanese Relations

In Dangdai Shijie, no. 5, 2021, Liu Jiangyong assesses the recent evolution of Japan’s policy toward China, as developed by Abe in the first two decades of the twenty-first century. In April 2021, three events caused a rapid deterioration in Chinese views of Japan and in Sino–Japanese relations more generally: first, Japan decided to discharge wastewater from the destroyed Fukushima plant into the Pacific Ocean; then, during their leadership meeting, Suga and Biden affirmed their support for a peaceful resolution of the Taiwan issue and their concern over the Senkaku/Diaoyu Islands dispute; and finally, Suga sent an offering to the Yasukuni shrine. Each of these decisions, Liu argues, is linked to the national strategy developed by Abe.

Under Abe, Japan’s national strategy progressed along two dimensions: domestically, it focused on constitutional revision, expanding the legitimate uses of military force by the SDF, and strengthening Japan’s military capacity; internationally, it focused on “proactive pacifism,” cooperation with the Quad, promoting a “Free and Open Indo-Pacific,” and countering China’s regional objectives. The development of this strategy occurred in four stages. During the first stage, which included Abe’s first stint as prime minister, Abe introduced ideas such as revising the constitution and building Quad relations. During the second period, which started when Abe regained the prime minister position and continued until 2016, Abe began to implement his vision of Japanese strategic policy: he promoted the concept of a “Free and Open Indo-Pacific”, created Japan’s national security secretariat, advocated for US support for Japan’s claims to the Senkaku/Diaoyu Islands, and developed Japan’s new security laws. The third stage occurred during the Trump administration. Abe convinced Trump to embrace the “Indo-Pacific” concept, but also sought, temporarily, to improve Sino–Japanese relations before shifting to a more assertively anti-China position as US–China relations deteriorated. At the same time, Abe continued to push beyond the limits of Japan’s constitution. Most recently, Suga has continued the strategic policies of his predecessor, who Liu asserts maintains power behind the scenes. After Biden’s election, Suga immediately requested that the United States promise to defend Japan’s Senkaku/Diaoyu Island claims and continue its support for the Indo-Pacific strategy. Liu sharply criticizes coordination among the Quad and between Japan and the United States on issues he considers to be internal Chinese affairs.

Liu contends that, even in retirement, Abe continues to push for a Japanese strategic policy that responds to Sino–US competition in the Indo-Pacific and which uses this competition as an opportunity to check China’s rise. Such an approach rests on five key factors. First, Japan has a history of teaming up with strong powers to achieve expansionist, hegemonic goals. A second factor is Abe’s family legacy, derived from his maternal grandfather, Kishi Nobusuke, a key figure in Japan’s wartime government. Third, Japanese strategic thinkers are realists and proponents of power politics; they believe that allying with the United States is necessary to mitigate the threat they perceive from China. A fourth factor is Abe’s longstanding admonition to separate politics and economics when developing Japan’s China policy. Finally, Japanese public support for Japan’s claims to the Senkaku/Diaoyu Islands and the animosity toward China that results from this dispute are a key reason that Abe has been able to implement his strategic vision.

Liu argues that Japan’s efforts to maneuver strategically against China are doomed to fail. He believes that Japan’s efforts to manipulate Sino–US competition for its own gain will backfire. Liu is confident in China’s strength, repeating boilerplate Beijing language about the lasting global implications of the United States’ failed Mideast strategy, its inability to effectively combat the Covid-19 pandemic, and the superiority of Chinese values. He cautions that if Japan tries to follow the failed US model in the Asia-Pacific, the region will no longer be peaceful and Japan will no longer be secure. Liu also contends that, despite recent statements, the United States is unwilling to back Japan’s position in the Senkaku/Diaoyu Islands dispute in concrete ways. Liu believes that Japan will pay an enormous price for its strategic blunders. In the past decade, there have been two major errors: its poor response to the Fukushima nuclear disaster and its poor (compared to China, although not to many other countries) domestic containment of the Covid-19 pandemic. Liu argues that Japan should direct its resources toward combatting these dire domestic threats to its population, rather than “manufactured” claims of a strategic threat from China. Finally, Liu asserts that Japan’s strategy of making alliances with faraway countries while neglecting its relations with its neighbors, as well as its blame-shifting, will result in its isolation in Asia. Despite Japan’s vocal support for a “Free and Open Indo-Pacific,” Liu believes that few countries will be willing to pick sides and points to challenges in Japan’s relations with South Korea, North Korea, China, Russia, and Southeast Asia. Liu concludes that Japan will be undone by its failure to work collectively as part of the global community, something which he believes the Covid-19 pandemic necessitates and at which he believes that China is an exemplar.

ASEAN Centrality and Sino–ASEAN Relations

In Guoji Wenti Yanjiu, no. 3, 2021, Zhang Jie argues that intensifying strategic competition between China and the United States is spurring a reconceptualization of the regional order. Although the Quad powers and the EU all affirm the importance of ASEAN in their “Indo-Pacific” plans, this has not been enough to reassure ASEAN, given its fears that commitment to ASEAN centrality is diminishing and that ASEAN will be forced to pick sides.

Zhang asserts that in the aftermath of the Cold War, the Asia-Pacific was characterized by the dominance of the US alliance system, China’s increasing interest in regional multilateralism and coordination, and a commitment to ASEAN centrality. During the first decade of the twenty-first century, the Asia-Pacific was a model of regional cooperation, peace, and rapid economic development. However, significant changes began around 2010. China’s GDP surpassed that of Japan, indicating the shifting regional power balance, while the United States attempted to reassert its regional dominance with the Obama-era “return to Asia” policy. During the 2010s, China began to develop a vision of the regional order by gradually proposing different plans and visions based on its own strengths and changes in the regional environment. Because Sino–US relations of the early Obama era mixed competition with cooperation, ASEAN centrality was preserved and both China and the United States participated actively in regional multilateral dialogues.

However, Zhang contends, as American observers became more critical of Chinese “aggression” later in the Obama years, the United States began to adopt a more aggressive stance toward China. These tendencies led, during the Trump administration, to the US embrace of the Indo-Pacific concept. The core of the US Indo-Pacific concept is a vision of regional security that is rules-based, multi-layered, and centered on the United States, with particular attention to the apparent threats to US interests posed by both China and Russia. The Biden administration has embraced the Indo-Pacific concept. However, Zhang argues, the US decision to adopt a more competitive posture relative to China has damaged the existing regional order. As the United States attempts to reconstruct a regional order that it can dominate, the policies and attitudes of medium and small countries will have an important, but undetermined, effect; this will create diplomatic space for China to strengthen its position relative to the United States and promote a regional order that is more beneficial to the development of the countries of the region.

Zhang argues that for ASEAN centrality to persist, three external conditions are important: great power relations must be characterized by cooperation rather than competition, ASEAN must be able to balance among the great powers, and great powers both within and outside the region must accept ASEAN’s position. Despite vocal support for ASEAN centrality from other powers, ASEAN fears that actual dedication to this principle will diminish in the wake of increased Sino–US competition. Zhang contends that these tensions have turned regional dialogues into opportunities for the United States to impose diplomatic pressure on China (unstated is that China does the same), weakening ASEAN’s ability to set the agenda and terms for discussion and increasing the probability that it will ultimately be forced to pick sides. As the regional order shifts, ASEAN faces challenges to preserving the unity that is the foundation of ASEAN centrality.

ASEAN’s 2019 ASEAN Outlook on the Indo-Pacific attempts to preserve ASEAN unity and maintain its central position in the regional order by reconceptualizing ASEAN centrality in the context of the Indo-Pacific concept. Although there are important differences in the views of various ASEAN member states toward the “Indo-Pacific” concept, the ASEAN approach differs from that of the United States by emphasizing “forgiveness, openness, and cooperation and reflects ASEAN’s strategic autonomy and nimbleness.” It asserts ASEAN’s economic and political importance as an “honest broker” in the Indo-Pacific, encompassing countries that sit geographically between the Pacific and Indian Oceans. Zhang argues that ASEAN’s vision of the Indo-Pacific emphasizes integration, cooperation, and dialogue, in contrast to the US “Indo-Pacific strategy” that is focused on competing with, or even containing, China.

Zhang anticipates that ASEAN centrality will face new challenges, not only because of increased competition between China and the United States, but also because of more recent developments.  Although the region was initially successful in limiting the spread of the Covid-19 pandemic, coordination and mutual aid between the ASEAN states was far more limited than between China, South Korea, and Japan, calling into question the integration and unity of the region. A second key challenge is posed by the February 2021 coup in Myanmar: Although the United States, China, and the UN supported an ASEAN response, ASEAN maintained its policy of non-interference in the internal affairs of states (despite the mediation roles played by some of its member states), raising doubts about the continued effectiveness of the “ASEAN Way.” At the same time, Zhang asserts, the growing influence of the Quad as the core foundation of the US Indo-Pacific strategy poses challenges to both ASEAN centrality and ASEAN unity.

In short, Zhang contends that all parties affirm the value of “ASEAN centrality,” but this phrase has different meanings. When great power relations are relatively calm, ASEAN prioritizes preserving the development direction of its regional economic, political, and security frameworks, its established processes, and its ability to set the regional agenda. When it faces outbursts of great power competition, ASEAN realizes the importance of acting as a “mediator.” By contrast, to the United States and some of its allies, “ASEAN centrality” means to use ASEAN regional mechanisms to create a networked security architecture that benefits themselves and preserves US regional dominance. Consequently, support for ASEAN centrality by the United States and others is insufficient to assuage ASEAN concerns; ASEAN must create its own vision of a regional framework to preserve its centrality and unity.

In contrast to these critiques of the US approach, Zhang (unsurprisingly) argues that China’s engagement with ASEAN over the past 30 years indicates the value it places on ASEAN centrality. During this time, China has grown to more actively embrace regional mechanisms; its relations with the ASEAN member states provide a more general model for how China can interact with small- and medium-sized countries. Zhang claims that China’s record of cooperation with these countries affirms its stated vision of an open, inclusive, egalitarian, and cooperative global order and should ease fears that its real intention is to dominate the region. (Although Zhang briefly mentions the South China Sea disputes, Zhang contends that most ASEAN countries have understood that they should adhere to China’s red lines on the issue, and that countries with which it does have disputes have generally adhered to a dual-track approach that allows cooperation in other areas to continue.) Zhang contends that China should integrate its regional vision with ASEAN’s Outlook and is optimistic that China and ASEAN can work together to create a mutually beneficial regional order.

In Guoji Guanxi, no. 3, 2021, Wang Chuanjian and Zhang Jia offer their interpretation of the challenges to ASEAN centrality posed by the US Indo-Pacific strategy and consider how ASEAN centrality might be reimagined. Like Zhang Jie, Wang and Zhang believe that increased Sino–US competition has undermined the previous understanding of ASEAN centrality. According to Wang and Zhang, ASEAN centrality has four key characteristics: regional centrality, platform centrality, normative centrality, and relationship centrality. Regional centrality refers to the geopolitical dimension: the strategic importance of ASEAN’s physical presence between the Indian and Pacific Oceans. Platform centrality refers to the fundamental importance of ASEAN institutions in regional cooperation processes. Normative centrality refers to the significance of the “ASEAN Way” for establishing standards of behavior to address regional conflicts and international challenges. Relationship centrality refers to ASEAN’s key role in regional networks.

The survival of ASEAN centrality, Wang and Zhang argue, rests on four key conditions: the existence of a regional balance of power, a mix of cooperation and competition between major regional powers, shared regional leadership among various countries, and ASEAN’s ability to balance between the great powers rather than picking a side. The United States’ embrace of the Indo-Pacific strategy, first adopted under the Trump administration, has undermined ASEAN’s existing role and poses challenges to the continued stability of ASEAN centrality. Wang and Zhang contend that the US Indo-Pacific strategy will undermine the regional balance of power as the United States devotes diplomatic and military resources to Quad relations in order to contain China’s rise. Likewise, they believe the increased strategic competition between China and the United States will undermine the delicate balance of competition and cooperation that is necessary for the persistence of ASEAN centrality. These two shifts will make it harder for ASEAN to maintain its strategy of balancing between great powers, often achieved by seeking economic relations with China and security relations with the United States, and will increase the pressure to pick a side. The recent US emphasis on bilateralism, rather than multilateralism, in both economic and security arenas may further erode ASEAN centrality, given ASEAN’s importance as the key multilateral regional organization.

Like Zhang Jie, Wang and Zhang argue that ASEAN envisions the Indo-Pacific as a concept more consistent with existing ASEAN principles and is determined not to be pulled into Sino–US disputes. Nevertheless, ASEAN must contend with shortcomings, such as its weakness in resolving conflicts. Furthermore, ASEAN is ill-prepared to respond to the US Indo-Pacific strategy: ASEAN believes, mistakenly, that the 2019 Outlook is sufficient to maintain ASEAN centrality and its regional leadership. Instead, Zhang and Wang believe, ASEAN will need to create more institutionalized cooperation rules that provide a larger role for major powers to promote regionalism. At the same time, while ASEAN’s regional centrality remains apparent under the changed context of the Indo-Pacific context, ASEAN will need to undertake substantial work to redefine its platform, normative, and relationship centrality, with a focus on both its internal cohesion and its external relations with other countries. Wang and Zhang conclude by reaffirming China’s support for ASEAN centrality and the importance of Chinese cooperation with ASEAN for regional stability, the BRI, and China’s broader efforts to combat the US Indo-Pacific strategy.

US–China Trade Relations

In Dangdai Shijie, No. 5, 2021, Zhu Feng and Ni Guihua argue that the Trump administration’s trade war with China and the Covid-19 pandemic have damaged globalization in long-lasting ways. Zhu and Ni blame the Trump administration for unilaterally adopting policies to encourage industries to return to the United States, reshape the global division of labor, and hamper China’s science and technology industry. Furthermore, they charge that Trump shifted Sino–US competition from the traditional political and military spheres to economic, civil, and science and technology areas in order to avoid responsibility for his poor response to the Covid-19 pandemic and maximize his reelection chances.

Zhu and Ni argue that, historically, US engagement policy toward China was rooted not only in the United States’ post-World War II attempts to bring various countries into the international economic order it created, but also in its efforts to use globalization to reform China’s political system and guide it toward compliance with global norms. In their view, the United States created a global order that helped to sustain its hegemony, and which was not only grounded in political and economic liberalism, but was also Western-centric and imbued with a belief in Western superiority. Since the 2008 global financial crisis, emerging powers led by China and India have tried to reform the global economic order to make it more equitable. As China became stronger, the United States came to believe that China was attempting to rewrite the rules of the global order. The US engagement policy, already starting to crack during the late Obama years, collapsed under the Trump administration. During the Trump years, the United States defined China as a “revisionist” power and a “strategic competitor,” and a trade war erupted. From a global perspective, the Trump administration launched the trade war because US willingness to bear the cost of providing global public goods has decreased as its national power has waned; Trump criticized China and others as “free riders.” At the domestic level, globalization has changed the global division of labor; China has become the center of global supply chains, which has hollowed out traditional US industries, leading to unemployment and a rise in economic nationalism.

Zhu and Ni contend that the US trade war against China is composed of two parts, a tariff war and a technology war, both of which have seriously damaged the global economic order and globalization processes. The tariff war severely weakened Sino–US trade links. Although the United States and China signed an agreement in early 2020, trade volume is still below historic highs (Zhu and Ni do not, however, address the impact of the Covid-19 pandemic on bilateral trade volume). At the macrolevel, the Trump administration pulled the United States out of a host of international agreements and organizations. At the microlevel, the global division of labor has changed as global supply chains have become more localized. Multinational corporations have shifted production locations in order to avoid tariffs. At the same time, Zhu and Ni charge, the United States has launched a technology war against China, which, unlike the tariff war, continued to rage even after Trump left office. While the tariff war was more narrowly focused on trade, the technology war indicates the subordination of US economic interests to its political and security priorities. Zhu and Ni criticize what they contend are US efforts to choke off Chinese technology suppliers and preserve US dominance in these fields, and to prevent China’s military from accessing advanced technologies. They point to US concerns that reliance on Chinese-made 5G technologies could pose a security threat by giving China the ability to control the so-called Internet of things. To this end, the United States has pressured its allies not to rely on Huawei to build their 5G infrastructure and has sought to remove Huawei equipment from US government networks, while also trying to build the domestic semiconductor industry.

The sudden emergence of the Covid-19 pandemic further destabilized already teetering globalization processes, posing an unprecedented test of global production chains, while also accelerating the transformation to a digital economy. In the short-term, the pandemic increased national economies’ dependence on Chinese supply chains, particularly for medical products, spurring growth in the Chinese economy. In the long run, however, the pandemic has accelerated localization, regionalization, and near-shoring trends by demonstrating how vulnerable countries are to global supply chains and how inadequate planning for emergency scenarios has been to date. This has spurred a more general rethinking of the global division of labor and led many companies to lessen dependence on China as “the world’s factory.” Furthermore, the pandemic has demonstrated the centrality of the digital economy, both in terms of the application of digital technologies to respond to the pandemic itself and in the increased reliance on the “cloud economy” as millions began to work from home. In this context, competition between China and the United States over strategic technology has become far more apparent.

Zhu and Ni conclude that US fears of China’s rising power and the eruption of the Covid-19 pandemic have made prominent the role of security and political considerations in industrial policy and will, over the long-term, result in the localization of supply chains and the fragmentation of globalization. In contrast, they contend, China is demonstrating its willingness to abide by the norms of the global economic order by undertaking domestic reforms, such as liberalizing its financial controls. Zhu and Ni end by reaffirming China’s commitment to globalization.

Biden’s Foreign Policy

In Dangdai Shijie, No. 5, 2021, Liu Guozhu assesses the Biden administration’s March 2021 Interim National Security Strategic Guidance, with particular attention to the implications for Chinese interests. Liu argues that Biden seeks to rebuild the US economy, reassert US values and influence in global institutions, and reinvigorate US alliances. Although the Biden administration is willing to cooperate with China on global and regional affairs, Liu contends that the relationship is likely to be characterized more by strategic competition and even, perhaps, confrontation.

Liu asserts that Biden’s national security policy is grounded in strengthening US global power by rebuilding its national strength. On the domestic front, the United States must craft an effective response to the dual public health and economic crises, increase investments in US innovation, and reinvigorate democratic values in the face of recent violence. At the international level, the
interim guidance reflects US determination to reengage with global institutions and ensure that global governance mechanisms are consistent with US values and norms. This is particularly evident in the US approach to the global governance of emerging technologies, the global economy, climate change, and public health.

Liu contends that the interim guidance envisions a modernized alliance system in which the United States will coordinate with “likeminded allies and partners” to address shared challenges, including those posed by great power competition (most notably with China). In contrast to the more rigid bipolar alliance structure of the Cold War, Liu argues, the alliance system the Biden administration envisions will be more flexible and issue-specific, with the particular structure of alliances in different issue areas tailored to satisfy concrete US strategic and security interests. To date, alliance relations have formed in four different issue-areas. Strategic and security alliances include transatlantic alliance partnerships, such as NATO and the EU, and the “hub-and-spokes” model, typified by the US–Japan and US–Korea alliances, and perhaps extending to the Quad. The main function of these alliances vis-à-vis China is to promote “sustainable deterrence.” With regard to science and technology, the interim guidance emphasizes US determination to work with “like-minded democracies” to ensure the security of “critical supply chains and technology infrastructure”—an area in which China and the United States are increasingly at odds and in which the United States seeks to maintain its dominance. A third set of alliance structures relates to global democratic governance. The interim guidance calls for a “global Summit for Democracy” and affirms US commitment to protecting human rights and the stability of democratic states against the threats the United States perceives from authoritarianism. A final dimension is economic. Here, Liu argues the Biden administration is likely to face the greatest challenges because China is the largest trading partner of most countries in the world. Even if the Biden administration cannot obtain sufficient domestic support for the United States to enter the CPTPP or a renegotiated TPP, however, it will likely be able to achieve its economic objectives through its alliance relations in the other three issue areas. Liu asserts that the new US alliance system will differ from that of the past because it will be multi-dimensional (it may include both nation-states and non-state actors), stratified (there will be multiple, cross-cutting alliance structures with an array of core members, general members, and partners), and compound (unlike the traditional hub-and-spokes model, some countries will participate in multiple alliance modules based on shared interests and values).

Liu argues that the interim guidance reflects US concern over great power competition with China and the challenge it believes China poses to the global order. This points to the dominant role of competition and confrontation in future US strategy toward China, even though cooperation is not impossible. Liu contends that, to a certain extent, the interim guidance reflects Cold War-esque thinking of a competition between two fundamentally different approaches to governance with implications for the future of human civilization. It also highlights the Biden administration’s focus on the Indo-Pacific region and the emphasis it places on regional coordination with countries like India, Japan, Vietnam, and the Philippines to counter China’s increasing power. Furthermore, Liu argues that the interim guidance reveals US concern that China will gain the upper hand in emerging technologies, which US strategic thinkers view as the key to gaining geo-economic dominance. To this end, the interim guidance advocates increased investment in US innovation, while also maintaining US technological superiority through measures such as semiconductor export control and protection of critical supply chains. At the same time, the Biden administration seeks to maintain a global governance model rooted in US values, arguing that China is trying to reshape the rules of the game in ways that work to its advantage. Based on his analysis of the interim guidance, Liu predicts that competition will continue to characterize the Sino–US relationship under Biden, but that US strategic policy will be more organized and reliant on alliances than the disorderly unilateralism of the Trump era. Despite US efforts, Liu concludes, the United States will not be able to regain its past power and will face challenges as it tries to build a global consensus that satisfies the needs of its allies and the increased desire of some for “strategic autonomy.”

 

#ASEAN centrality #Joe Biden #US-China rivalry #Xi Jinping