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"On my part, I remain committed to the process of dialogue. It is my firm belief that dialogue and a willingness to look with honesty and clarity at the reality of Tibet can lead us to a viable solution."

How serious is the Chinese challenge?

July 23, 2010

OnLine Opinion (Australia)
July 21, 2010

Is China the benign emerging market with limited
regional aspirations that Beijing is so anxious
to portray? Or is it an increasingly powerful,
assertive economic and strategic force that will
increasingly challenge Europe, America and Asian neighbours?

The West has a long history of crying wolf about
China, beginning with the 19th century Yellow
Peril scare. More recently fears of China reflect
European and US self-doubt about their ability to
maintain the current standard of living in the
face of Chinese competition. Anxiety is also
driven by neoconservative need to have an enemy
to mobilise public support for US defence
spending and continuation of American global
hegemonic influence. Moreover, such fears ignore
China’s daunting development needs, including
hundreds of millions of people still living in harsh poverty.

Nevertheless, evidence in recent months suggests
growing Chinese self-confidence, with a capacity
and an unprecedented willingness to exert
leverage in the world. This should come as no
surprise. History teaches that rising powers flex
their muscle and test influence. Europeans,
Americans and China’s neighbours do not
necessarily need to be afraid. But they do need to be wary.

Beijing’s new assertiveness is fueled by its
unprecedented economic success. The Chinese
economy has doubled in size during the last seven
years and per-capita income has doubled in six years.

This economic performance has led the Chinese to
be the most self-satisfied people in the world,
according to the recent Pew Global Attitudes
survey. Nine in 10 Chinese are happy with their
country’s direction, feel good about the current
state of their economy and are optimistic about China’s economic future.

And the rest of the world increasingly sees China
as the emerging economic superpower. In that same
Pew survey of populations in 22 nations,
majorities or pluralities in eight countries
picked China as the world’s leading economic
power, compared with people in only two nations
who felt that way in 2009. Half the Germans,
Jordanians, Japanese, French and Americans now assign the top spot to China.

Since 2009, in 13 of the 21 countries for which
trends are available, the portion of the public
that views China as the world’s leading economic
power has grown sharply, including increases of
29 percentage points in Japan, 23 in Germany and 21 in Jordan.

And China seems increasingly willing to use its
rising stature to exercise leverage over
diplomatic, security and economic issues.

There is no more kowtowing to the United States.
When US President Barack Obama visited China in
November 2009, his principal public event in
Shanghai, a town-hall meeting with students, was
broadcast only on local TV, not nationwide -
unlike a famous town-hall meeting that Bill
Clinton held in China during his first visit as
president. Moreover, press reports at the time
censored the content, as did Chinese newspaper
editors with an Obama “Southern Weekend” interview.

At the Copenhagen Climate Summit in December,
Chinese Premier Wen Jiabao failed to attend an
initial meeting with Obama, sending a lower-level
official in his place. At one point, Obama was
subjected to a finger-wagging lecture by a
high-ranking Chinese official, which would have
provoked an international incident had an
American treated the Chinese leader in such a manner.

Beijing has turned aggressive on trade and
investment matters, demanding that foreign
companies patent technologies in China and adopt
Chinese standards if they want to sell in the
Chinese market. It has also brought trade cases
against Western producers who sell in China.

On the political front, Chinese officials have
begun an expansive assertion of China’s national
sovereignty. Beijing has long claimed that Tibet
and Taiwan are “core national interests” and
foreigners should keep out of these “internal
affairs”. Now Chinese have begun to apply this
diplomatic term to the South China Sea, a 1.2
million square mile area through which flows at
least a third of global maritime commerce and
more than half of Northeast Asia’s imported
energy supplies. Beijing’s assertion threatens
fishing and oil-exploration interests of Vietnam,
Taiwan, the Philippines, Indonesia and Malaysia,
and naval transit interests of the US, Japan and South Korea.

At the same time Beijing has reasserted old
territorial claims over the Indian state of
Arunachal Pradesh and backed up that stance with
stationing new troops on India’s northeastern border.

China also seeks a larger role in South Asia.
Beijing provided the Sri Lankan government with
the arms it used to quell its long-running civil
war with the Tamil Tigers. It has expanded naval
operations in the Indian Ocean, while building
civilian port facilities in a number of countries
in the region - from Burma to Pakistan. It has
deepened economic ties with Burma and
Afghanistan, while ramping up its close strategic
relationship with Pakistan by offering civilian
nuclear assistance. It has excluded India from
the East Asian diplomatic structures that Beijing champions.

China’s neighbours will be excused if they begin
to worry about linkage of core national interest,
national sovereignty and territorial integrity
when coupled with growing Chinese defense
spending. Beijing now spends 4.3 per cent of its
GDP on defence, much more than its neighbours
India, Japan, South Korea, Taiwan or Vietnam.

But China also exercises newfound leverage
through inaction. Beijing long resisted pressure
to appreciate the renminbi. A June decision to
stop pegging its currency to the US dollar has
not yet led to meaningful increase in the
renminbi’s value. China has also been notably
unwilling to exert pressure on North Korea over
its recent alleged sinking of a South Korean
naval vessel. And Beijing insisted on watering
down UN economic sanctions against the Iranian
nuclear-weapons program before it would vote for
them, suggesting China’s economic interests in
Iran trump European and US strategic concerns about the program.

Beijing is clearly signaling that the
international status quo is not permanently
acceptable to China. It has laid down a set of
markers, and its relations with other countries have changed forever.

Yet many times in the past the Chinese have
tested the boundaries of their influence and the
patience of the West and its Asian neighbours,
only to pull back. If all the posturing that has
happened to date proves to be the extent of
China’s acting out, the situation is manageable.

The danger of increased international tension and
miscalculation will come only if Chinese
assertiveness grows in the months ahead.

Are there other regions or issues that China will
define as its "core national interest" and thus
off limits to foreign criticism? Its domestic
human-rights policy? Its carbon-emissions record?
Territorial claims in central Asia?

Will Chinese companies attempt to circumvent
Iranian economic sanctions, tempting Germans,
Koreans or the Japanese to follow suit?

Will Beijing use its massive holdings of US
treasury notes to leverage more directly American behaviour?

It’s unrealistic to expect an economically
successful, increasingly self-confident China not
to play a more expansive role in the world. But
that reality does not give Beijing license to
throw its weight around with impunity, even if
other nations have done so in the past.

Europe, America and the rest of Asia must be
vigilant. China is rising. And rising powers have
a history of upsetting the status quo.
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