Asia in World Politics

Series Editor: Samuel S. Kim

Cooperation or Conflict in the Taiwan Strait?

by Ralph N. Clough
China Rising: Power and Motivation in Chinese Foreign Policy
edited by Yong Deng and Fei-Ling Wang
In the Eyes of the Dragon: China Views the World
edited by Yong Deng and Fei-Ling Wang
Pacific Asia? Prospects for Security and Cooperation in East Asia
by Mel Gurtov
South Asia in World Politics
edited by Devin T. Hagerty
The United States and Northeast Asia: Debates, Issues, and New Order
edited by G. John Ikenberry and Chung-in Moon
East Asia and Globalization
edited by Samuel S. Kim
The International Relations of Northeast Asia
edited by Samuel S. Kim
North Korea and Northeast Asia
edited by Samuel S. Kim and Tai Hwan Lee
International Relations of Asia, Second Edition
edited by David Shambaugh and Michael Yahuda
Chinese Foreign Relations: Power and Policy since the Cold War, Third
Edition
by Robert G. Sutter
International Relations of Southeast Asia: The Struggle for Autonomy,
Second Edition
by Donald E. Weatherbee
International Relations of Asia

Second Edition

Edited by
David Shambaugh
and
Michael Yahuda

ROWMAN & LITTLEFIELD

Lanham • Boulder • New York • Toronto • Plymouth, UK
Published by Rowman & Littlefield
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Copyright © 2014 by Rowman & Littlefield

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British Library Cataloguing in Publication Information Available

Library of Congress Cataloging-in-Publication Data

International relations of Asia / edited by David Shambaugh and Michael

Yahuda.—Second edition.
pages cm.—(Asia in world politics)
Includes bibliographical references and index.
ISBN 978-1-4422-2639-5 (cloth : alk. paper)
ISBN 978-1-4422-2640-1 (pbk. : alk. paper)
ISBN 978-1-4422-2641-8 (electronic)
1. Asia—Politics and government—21st century. 2. Asia—Foreign
relations. I. Shambaugh, David L., editor of compilation. II. Yahuda, Michael
B., editor of compilation. III. Shambaugh, David L. International relations in
Asia.
DS35.2.I56 2014
327.5—dc23
2013046873

™ The paper used in this publication meets the minimum requirements of

American National Standard for Information Sciences—Permanence of Paper
for Printed Library Materials, ANSI/NISO Z39.48–1992.
 Dedicated to

Michael Leifer and Thomas W. Robinson

Cherished colleagues, friends, and pioneers in the study of the international

relations of Asia
 Contents

Map of Asia
List of Figures and Tables
List of Acronyms
Preface to the Second Edition

Part I: Introduction
1 International Relations in Asia: A Multidimensional Analysis
David Shambaugh

Part II: Legacies and Theories

2 The Evolving Asian System: Three Transformations
Samuel S. Kim
3 Thinking Theoretically about Asian IR
Amitav Acharya

Part III: The Role of External Powers

4 The United States in Asia: Durable Leadership
Robert Sutter
5 Europe’s Role in Asia: Distant but Involved
Sebastian Bersick
Part IV: Regional Powers
6 China’s Role in Asia: Attractive or Assertive?
Phillip C. Saunders
7 India’s Role in Asia: A Rising Regional Power
T. V. Paul
8 Japan’s Role in Asia: Searching for Certainty
Michael Green

Part V: Sub-Regional Actors

9 ASEAN and Southeast Asia: Remaining Relevant
Sheldon W. Simon
10 Australia’s Choices in the Asian Century
Hugh White
11 Central Asia: The End of the “Great Game”?
Martha Brill Olcott
12 The Korean Peninsula and Northeast Asian Stability
Scott Snyder

Part VI: Trans-Regional Linkages and Dynamics

13 The Asian Regional Economy
Edward J. Lincoln
14 Globalization and International Relations in Asia
Nayan Chanda
15 Security Dynamics in Asia
Ralph A. Cossa

Part VII: Conclusion

16 Looking Ahead: A New Asian Order?
Michael Yahuda
About the Contributors
 Figures and Tables

FIGURES

8.1 Japanese Views toward China

13.1 GDP, 2012, Measured in US Dollars at Market
Exchange Rates
13.2 GDP per Capita, 2012
13.3 Japan’s Imports from Asia
13.4 Japan’s Exports
13.5 ASEAN Imports
13.6 South Asia Exports
13.7 Central Asia Exports
13.8 China’s Exports
13.9 China’s Imports
13.10 Cumulative Foreign Direct Investment into China, 2011
13.11 Foreign Direct Investment Flow into ASEAN
13.12 Cumulative Foreign Direct Investment in India
13.13 Cumulative Foreign Direct Investment in Kazakhstan

TABLES

3.1 Three Perspectives on International Relations

3.2 Theoretical Perspectives on Asia’s International Relations
5.1 EU Trade and FDI with Asia
5.2 Asia’s Trade and FDI with the EU in 2012
5.3 European Tourists in Asia in 2011
5.4 Asian Tourists in Europe 2012
5.5 Asian Students in the EU in 2010
5.6 European Students in Asia 2010
6.1 Percentage of Imports from China
6.2 Percentage of Exports to China
11.1 Central Asian Exports
11.2 Central Asian Imports
13.1 Real GDP Growth Rates
 Acronyms

ACFTA ASEAN-China Free Trade Area

ADMM ASEAN Defense Ministers Meeting
AEC ASEAN Economic Community
AFTA ASEAN Free Trade Area
AICHR ASEAN Intergovernmental Commission on Human Rights
AMM Aceh Monitoring Mission
ANZUS Australia, New Zealand, United States Security Treaty
APEC Asia-Pacific Economic Cooperation
APSC ASEAN Political-Security Community
APT ASEAN + 3
ARF ASEAN Regional Forum
ASCC ASEAN Social-Cultural Community
ASEAN Association of Southeast Asian Nations
ASEAN+1 ASEAN plus China
ASEAN+3 ASEAN plus China, Japan, and South Korea
ASEF Asia-Europe Foundation
ASEM Asia–Europe Meeting
AUSMIN Australia–United States Ministerial Consultations
BDA Banco Delta Asia
BJP Bharatiya Janata Party
BRIC Brazil, Russia, India, China
BRICS Brazil, Russia, India, China, South Africa
CAREC Central Asia Regional Economic Cooperation Program
CBM confidence-building measure
CCP Chinese Communist Party
CEAC Council on East Asian Community
CFC Combined Forces Command
C4I command, control, communications, computers, and intelligence
CFSP Common Foreign and Security Policy
CIS Commonwealth of Independent States
CMI Chiang Mai Initiative
CNOOC China National Offshore Oil Corporation
CNPC China National Petroleum Corporation
COASI Asia–Oceania Working Party (EU)
CPC Caspian Pipeline Consortium
CSCAP Council for Security Cooperation in the Asia Pacific
CSIS Center for Strategic and International Studies
CSO Consociational Security Order
CSTO Collective Security Treaty Organization
CTBT Comprehensive Test Ban Treaty
DCI Development Cooperation Instrument
DPJ Democratic Party of Japan
DPRK Democratic People’s Republic of Korea
EAFTA East Asian Free Trade Area
EAS East Asia Summit
EC European Commission
ECO Economic Cooperation Organization
ECU Eurasian Customs Union
EEAS European External Action Service
EEZ exclusive economic zone
EIAS European Institute for Asian Studies
ESCAP United Nations Economic and Social Commission for Asia and
the Pacific
ESDP European Security and Defense Policy
E-3 Expanded Economic Engagement
EU European Union
EurAsEC Eurasian Economic Community
FA framework agreement
FDI foreign direct investment
FEALAC Forum for East Asia–Latin America Cooperation
FPPC Five Principles of Peaceful Coexistence
FTA free trade agreement
GATT General Agreement on Tariffs and Trade
GDP gross domestic product
GEACPS Greater East Asian Co-Prosperity Sphere
GNP gross national product
GONGO government-operated non-governmental organizations
GSLV geosynchronized satellite launch vehicle
GUUAM Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova Group
HADR humanitarian assistance and disaster relief
HWP Harmonious World Principle
IAEA International Atomic Energy Agency
IFI international financial institution
IISS International Institute for Strategic Studies
IMET International Military Education and Training
IMF International Monetary Fund
INSS Institute for National Strategic Studies
IPE international political economy
IPR intellectual property rights
IR international relations
IRBM intermediate-range ballistic missile
ISG Inter-Sessional Support Group
IT information technology
JI Jemaah Islamiyah
JMSDF Japan Maritime Self-Defense Force
JMSU joint marine seismic undertaking
KEDO Korean Peninsula Energy Development Organization
LDP Liberal Democratic Party
MES market economy status
MITI Ministry of International Trade and Industry
MOFA Ministry of Foreign Affairs
MOFCOM Ministry of Commerce
MRBM medium-range ballistic missile
NAM Non-Aligned Movement
NATO North Atlantic Treaty Organization
NBR National Bureau of Asian Research
NEAPCI Northeast Asia Peace and Cooperation Initiative
NEAPSM Northeast Asia Peace and Security Mechanism
NEAT Network of East Asian Think-Tanks
NIC newly industrialized country
NIE National Intelligence Estimate
NGO non-governmental organization
NPT Nuclear Non-Proliferation Treaty
NSG Nuclear Suppliers Group
NSS National Security Strategy
NTS non-traditional security
OECD Organisation for Economic Co-operation and Development
OIC Organization of the Islamic Conference
ONGC Oil and Natural Gas Corporation
OPEC Organization of Petroleum Exporting Countries
OSCE Organization for Security and Co-operation in Europe
PACOM US Pacific Command
PBEC Pacific Basin Economic Council
PCA partnership and cooperation agreement
PD preventive diplomacy
PECC Pacific Economic Cooperation Council
PIF Pacific Island Forum
PLA People’s Liberation Army
PPP purchasing power parity
PRC People’s Republic of China
PSI Proliferation Security Initiative
PSLV polar satellite launch vehicle
PTA preferential trade agreement
PULO Patani United Liberation Organization
R&D research and development
RCEP Regional Comprehensive Economic Partnership
ROK Republic of Korea
SAARC South Asia Association for Regional Cooperation
SAFTA South Asia Free Trade Area
SARS severe acute respiratory syndrome
SCO Shanghai Cooperation Organization
SCS South China Sea
SEANWFZ Southeast Asian Nuclear-Weapon-Free Zone
SEATO Southeast Asia Treaty Organization
SGC Secretariat-General Council
SIPRI Stockholm International Peace Research Institute
SOM Senior Officials Meeting
SPT Six-Party Talks
SWP German Institute for International and Security Affairs
TAC Treaty of Amity and Cooperation
TACIS Technical Assistance for the Commonwealth of Independent
States
TAPI Turkmenistan-Afghanistan-Pakistan-India
TCOG Trilateral Coordination and Oversight Group
TEIN Trans-Eurasia Information Network
TEPSA Trans European Policy Studies Association
TIFA Trade and Investment Framework Agreement
TPP Trans-Pacific Partnership
TTIP Transatlantic Trade and Investment Partnership
UNCLOS United Nations Convention on the Law of the Sea
UPA United Progressive Alliance
WFP World Food Program
WHO World Health Organization
WMD weapons of mass destruction
WTO World Trade Organization
 Preface to the Second Edition

Given the pace and scope of change in Asia and the increasing complexities
of international relations in the region, we felt there was an urgent need for an
up-to-date study when we published the first edition of this book back in
2008. But even in the short span of five years, the region has continued to
evolve and change rapidly—and it has thus become clear that a newly revised
and updated edition was needed. It is amazing to all of the contributing
authors just how much has changed in such a short period of time.
For example, just after the first edition was published, the global financial
crisis erupted. Although more insulated than Europe or North America, Asia
was nonetheless deeply affected. A year later (2009–10) China embarked on
what has become known as its “year of assertiveness”—taking a series of
actions that aggravated relations with virtually all of its neighbors, thus
undermining much of the progress Beijing had made over the previous
decade with its regional “charm offensive.” China’s image in the region was
badly tarnished and quickly soured. One result was that many—indeed most
—Asian governments came clamoring to Washington imploring the new
Obama administration to remain engaged and attentive to the region. Asian
governments felt nervous about China’s more assertive profile while the
United States was seemingly distracted with the Middle East and Afghanistan
—hence they collectively called for a more robust and sustained American
commitment to the region. For its part, Washington was having its own
troubles with China after 2009, as mutual strategic distrust deepened and new
strains in the relationship emerged.
These developments contributed to the Obama administration’s announced
“pivot” or “rebalancing” initiative to Asia, although there was a general
recognition in the administration that Asia commanded America’s priority
strategic focus. While this initiative waned somewhat during Obama’s second
term, Washington definitely increased its attentiveness and presence in Asia.
As a result, Beijing recalibrated its own regional diplomacy under its new
president Xi Jinping and premier Li Keqiang, and at the time of this
publication it seems clear that at least a “soft rivalry” for regional influence
between the United States and China is under way. At the same time, we
know—and the following pages illustrate—that the international relations of
Asia are far too complex to view simply through such a bipolar lens. If there
is a single defining characteristic of Asian international relations in this era, it
is complexity. This requires all observers to adopt a multifaceted and
multilevel perspective.
The arrival of Xi and Li on the regional stage has been accompanied over
the past five years by new leaders in Australia, Japan, Malaysia, Mongolia,
Myanmar, North and South Korea, the Philippines, and Thailand. In the cases
of Pakistan and Russia, previous leaders returned to office following a hiatus.
These new leaders, drawn from different generations and experiences, all
bring new perspectives and policies to the Asian scene. New regional
institutions—most notably the East Asian Summit—have also taken shape,
while promising new ones like the Trans-Pacific Partnership (TPP) are in the
offing. Other regional changes have included increased security tensions
associated with the maritime disputes in the East and South China seas, North
Korea’s military belligerence and ongoing nuclear weapons program, and
strains in bilateral relations among various Asian states. There have also been
significant environmental disasters, such as Japan’s Fukushima Daiichi
nuclear meltdown caused by the earthquake-induced tsunami in 2011, the
Indonesian haze (smoke) that blanketed much of Southeast Asia in the
summer of 2013, and the continually deteriorating air quality in China.
Given these and other important changes that have occurred in five short
years, we felt the need to publish a fully updated and revised edition. Our
wonderful editor at Rowman & Littlefield, Susan McEachern, was also a key
stimulus (given how well received the first edition had been). Fortunately,
when we approached the contributing authors in the summer of 2013, they
were agreeable to revising their initial chapters. All contributors have
expended considerable time and effort in revising their chapters—amounting
to a substantial rewriting. As the editors of the volume, we are extremely
grateful to these very busy colleagues (whose time is in high demand), and
we gratefully thank each one.
We are also especially appreciative of the funding and support provided
by George Washington University’s Sigur Center for Asian Studies (our
institutional home), and the China Policy Program of GWU’s Elliott School
of International Affairs. Special thanks for his support is due to Elliott School
alumnus and International Council member Christopher J. Fussner.
In publishing this second edition, we have again been most fortunate to
work with the professional team Rowman & Littlefield Publishers, and
particularly acquisitions editor Susan McEachern. Janice Braunstein and
Carrie Broadwell-Tkach have also superbly guided the manuscript through all
stages of production, and we are most grateful for their expert editorial
abilities. We are honored to have the book included in Rowman &
Littlefield’s well-regarded Asia and the World series, under the experienced
editorship of Samuel Kim.
Finally, as was the case with the first edition, we choose to dedicate this
volume to two of our cherished and respected departed colleagues, Michael
Leifer and Thomas W. Robinson. We each knew well and worked a lot with
Michael and Tom during their lifetimes. We remember them as esteemed
colleagues and personal friends who contributed enormously to the study of
the international relations of Asia. Their intellectual influence is felt both
directly and indirectly in the pages of this book. We often wonder what they
would say about Asian IR today, but we suspect they would not be too
surprised by the trajectory that the region has taken and the analyses offered
in this volume.
We hope that all readers—but especially students—are both informed and
stimulated by this volume. And we particularly hope that some young readers
are inspired to pursue a career in the field of Asian international relations,
following in the footsteps of this earlier generation of scholars.

David Shambaugh and Michael Yahuda Washington, DC

 Part One
INTRODUCTION
 Chapter One
International Relations in Asia
A Multidimensional Analysis
DAVID SHAMBAUGH

International relations (IR) in Asia are increasingly complex and therefore

require analysts to adopt multilevel and multidimensional frameworks in
order to grasp the fluid dynamics in the region.
On one level, there are systemic factors that operate across the region and
impact—one way or the other—all nations. These include multilateral
institutions, major power relations, and economic and technological
interdependencies. On a second level, there exist sub-regional factors that
affect only certain parts of the region—Northeast, Southeast, South, or
Central Asia—but do not impact the region as a whole (e.g., ethnic issues,
historical frictions, boundary disputes). A third level consists of functional
issues, some of which operate across the region (e.g., trade and investment)
while others are more limited in their geographic scope (e.g., non-traditional
security issues like piracy or criminal triads, as well as bilateral “security
dilemmas” between antagonists like North and South Korea). A fourth set of
factors involve fixed characteristics in the region, such as geography (e.g.,
continental vs. maritime domains) and sovereign borders. A fifth set of
variables shaping international interactions in the region are historical factors
—in Asia historical memories are deep and they continue to cast a long
shadow over the contemporary region. A sixth set are norms of state behavior
—which by their very nature are in a constant process of evolution,
contestation, and renegotiation.1
As a consequence of these complexities and shaping factors,
conceptualizing and understanding the dynamics of Asian international
relations is increasingly vexing; thus it necessitates a multidimensional
approach. This volume seeks to unpack these complexities, actors, and
processes in six distinct categories: historical legacies and the applicability of
international relations theories, the role of external powers, the role of
regional powers, the role of sub-regional actors, trans-regional linkages and
dynamics, and the potential future evolution of international relations in Asia.
Michael Yahuda’s concluding chapter draws together many of these strands
and peers into the future—while this introductory chapter first introduces the
reader to some of the basic characteristics that define Asia today, and then
summarizes and explores some of the major themes that emerge from
subsequent sections and chapters in the book. In between these “bookend”
chapters, our contributing authors offer in-depth assessments of the different
“pieces of the puzzle.” Taken together, the following chapters do add up to a
“whole” that will provide readers with a comprehensive understanding of the
complex forces operating in Asia today and what constitutes the international
relations of this sprawling region.

DEFINING ASIA

The definition of the Asian region adopted in this book stretches from the
Pacific Ocean in the east to the Hindu Kush in the west, from Siberia and
Eurasia in the north to the Indian Ocean in the southwest and the Tasman Sea
in the southeast. It does include Central Asia but not Southwest Asia or the
Middle East (the traditional “Orient”). Thus, the international relations of
Asia today encompass far more than the old moniker “Far East.”
This sprawling region is primarily distinguished by its remarkable
diversity of characteristics in all respects: geography, weather, culture,
ethnicity, languages, religion, demographics, politics, economies, societies,
cultures, technologies, education, governments, and militaries. Asia includes
some of the world’s most and least developed countries, some of the
strongest and some of the weakest. The other principal regions of the world—
the European Union, Middle East, North America, Latin America, and Africa
—all display greater homogeneity in these realms than does Asia.
With such remarkable heterogeneity spanning twenty-nine nation-states
(east of Afghanistan and west of the Pacific Islands), any attempt to identify
patterns and overarching processes that define and characterize international
relations in Asia must proceed cautiously. Generalizations inevitably do not
apply across the region. Despite growing linkages within the region, to a
significant extent Asian international relations are still an amalgam of
interactions occurring in five distinct sub-regions: Australasia, Southeast
Asia, Northeast Asia, South Asia, and Central Asia. While one of the central
realizations to emerge from this book is that these separate sub-regions do
increasingly interact together—thus increasingly constituting an Asian
regional “system” of international relations for the first time in history—
nonetheless, each sub-region’s geographical separation, cultural coherence,
and developmental distinctiveness continues to limit the development of a
pan-regional Asian identity. Moreover, the great variety of political systems
has limited the development of pan-regional intergovernmental institutions.
An Asian multilateral architecture has been slow to take shape, although it
has begun with organizations such as the East Asia Summit (EAS), ASEAN
Regional Forum (ARF), Asia-Pacific Economic Cooperation community
(APEC), ASEAN + 3 (APT), and potentially the Trans-Pacific Partnership
(TPP) and the Regional Comprehensive Economic Partnership (RCEP)—
although none of these groupings are fully inclusive of all twenty-nine
regional states.
The regional order in Asia today, in the middle of the second decade of the
twenty-first century, still bears many of the hallmarks that have characterized
it for a number of decades: the American presence and alliance system, a
“rising” China, an uncertain Japan, the divided Koreas and China/Taiwan, a
threatening North Korea, an increasingly cohesive ASEAN, a diverse
amalgam of political systems (amid a general trend of democratization),
entrenched and competitive nationalisms, ethnic separatism, dynamic
economic growth, increasingly educated societies, and disciplined
workforces. These characteristics continue to distinguish Asian international
relations.
In addition to the persistence of these traditional features, however, a
variety of new features have also appeared that are reshaping regional
dynamics and creating a new regional order. These include the rise of India; a
reengaged Russia; shifting major power relations with growing competition
between the United States and the People’s Republic of China; the
mushrooming of multilateral institutions and dialogue forums; increased
intra-regional interaction and interdependence; the growing impact of “soft
power” in intercultural relations; the electronic connectivity of societies; the
ascent of political and radical Islam; the advent of terrorism; the spread of
various “non-traditional” security threats; the stabilization of China-Taiwan
relations; growing separatist movements (in China, India, Indonesia,
Myanmar, the Philippines, Sri Lanka, and Thailand); a newly open and
liberalizing Myanmar (Burma); and the increased military modernization
across the region. Thus, Asian international relations also reflect these
relatively new phenomena—all of which have added to their complexity and
diversity.

ASIA BY THE NUMBERS: KEY INDICATORS OF

IMPORTANCE

Demographically, 4.3 billion people lived in Asia in 2013, comprising 60

percent of the world’s population. Eight of the world’s fifteen most populated
nations are in Asia (China, India, Indonesia, Pakistan, Bangladesh, Japan, the
Philippines, and Vietnam). The world’s three largest Islamic nations are in
Asia (Indonesia, Pakistan, and Bangladesh), with 640 million Muslims (12.7
percent of the global Muslim population) living across the region—more than
anywhere in the world and more than all Middle East nations combined. Asia
is home to many of the world’s major religions—including Buddhism,
Catholicism, Christianity, Hinduism, Islam, Shintoism, Sikhism, and Taoism.
Asia has four of the world’s eight societies with the longest life
expectancies (Japan, Singapore, Hong Kong, and Australia), while none of
the top twenty infant mortality rates are in Asia—testimony to the dramatic
economic development and improved standard of living in the region, as well
as the success of China and India in reducing absolute poverty over the last
three decades. China alone has lifted 200 million of its citizens out of
absolute poverty since 1980. Despite such progress, 800 million Asians (66
percent of the world’s poor) still live on less than $1 per day.2 The disparities
are evident when one considers the range of Asian GDP per capita annual
incomes (on a purchasing power parity basis), which range from a low of
$1,055 in Afghanistan to a high of $60,799 in Singapore.3
Socially, while Asia remains poor—in some places desperately so—
various indicators indicate the transition that many societies are making from
developing to newly industrialized country (NIC) status. China, Japan, India,
and Russia rank among the top six nations in terms of GDP (on a PPP basis
and excluding the European Union), while South Korea, Indonesia, Taiwan,
and Australia all rank in the top twenty in the world. On a GDP per capita
basis, Hong Kong, Macao, Australia, Japan, Singapore, and Taiwan rank in
the top twenty-five internationally. China, India, and Japan rank in the top ten
of Internet and mobile phone users, while South Korea is the most “wired”
population on earth (per capita). Altogether, the International
Telecommunications Union estimates that there are 895 million mobile
broadband users in Asia, although this still only accounts for 22 percent
penetration of the total population in the region.4
As Asia has modernized it has been able to eradicate a number of
pandemic diseases, yet others like malaria, typhoid, and cholera remain active
public health threats in South and Southeast Asia. New threatening disease
dangers have also arisen—such as SARS (severe acute respiratory
syndrome), avian flu (H5N1), and HIV/AIDS. India, China, Russia, and
Thailand now rank among the top fifteen nations with people living with
HIV/AIDS. Despite these ongoing public health concerns, average Asian life
expectancy is at an all-time high of 71.1 years.5 Japan’s life expectancy ranks
first in the world (82.7 years), Singapore fifth (82.35 years), and South Korea
twenty-fourth (80.72 years).
Asia has become a source of innovation and technological advances
(although it is important to note that it still lags behind North America and
Europe). China, India, Japan, South Korea, Singapore, and Thailand all have
invested in large government spending initiatives on science and R&D.
Japan, South Korea, China, and Singapore all rank among the world’s top
“core innovators” in terms of share of GDP spent on research and
development. One source calculates that Asia now spends 1.79 percent of
regional GDP on R&D, slightly behind the European Union (1.88 percent)
and lagging further behind the United States (2.66 percent).6 Japan ranks first
in the world in percentage terms (3.48 percent of GDP), while China’s R&D
spending has been accelerating rapidly in recent years—now ranking number
2 in the world in aggregate spending ($13.3 billion in 2013), behind the
United States ($15.9 billion).
Since the late 1980s, Asian economies have grown at the fastest rate in the
world. Asia accounted for 35 percent of the world economy (global GDP) in
2010, 40 percent in 2013, and (growing at current rates) is projected to
account for 43 percent by 2020.7 Of this total 35 percent, China alone
accounted for 14 percent of global economic activity, India for 7 percent, and
the rest of Asia for 14 percent collectively in 2010. Asian corporations now
account for roughly half of the Global Fortune 500 firms (2013), with
Chinese and Japanese firms ranking number 2 and 3, respectively.
No Asian nation has known either flat or negative growth during the past
quarter century. Even Japan, where the growth rate remained the most anemic
in the region during this period, posted a 1.21 percent growth rate from 1993
to 2012.8 China’s GDP growth was the highest in the region during this
period, growing at a clip of 9.2 percent, while India’s was 6.2 percent,
Singapore’s 5.9 percent, Malaysia’s 5.7 percent, South Korea’s 5.4 percent,
Thailand’s 4.8 percent, Taiwan’s 4.4 percent, and so on. These astonishing
growth rates began to recede slightly following the 2008 global financial
crisis but rebounded in 2011 and remain the highest in the world. Today, ten
of the world’s thirty most competitive economies are in Asia.9
Asia has become the center of world trade—accounting for nearly one-
third of global trade volume. If Hong Kong and Russia are included, Asian
nations accounted for eleven of the top twenty-five trading nations in the
world in 2011. As Ed Lincoln’s chapter details, dramatic growth in intra-
regional trade has been an evident feature. Most of this trade travels by
shipping containers. Hong Kong, Kaohsiung, Osaka, Pusan, and Singapore
are among the world’s busiest cargo and container ports. A staggering 55,000
to 60,000 commercial vessels and oil tankers traverse the strategic Strait of
Malacca every year, carrying half of the world’s trade tonnage and half of its
crude oil shipments.10
As trade has burgeoned, some nations in Asia have grown rich, very rich.
We noted per capita income data above. But Asia also held 66 percent of total
global currency reserves in 2012. If Hong Kong is included separately from
China, six of the world’s ten largest holders of these reserves are in Asia
(China, Japan, Taiwan, South Korea, India, and Hong Kong), while
Singapore ranks number 11. China alone held $3.55 trillion in mid-2013,
leading the world.
This dramatic domestic economic growth has been stimulated by strong
growth in intraregional trade and investment. Asia accounts for about 60
percent of global capital inflows, approximately $150 billion per year. Asia’s
economic growth has also been fueled (literally) by dramatically increased
amounts of energy imports to the region. China, Japan, India, and South
Korea ranked respectively as the second-, third-, fifth-, and eighth-largest oil
importers in the world in 2006. Explosive growth has also produced severe
environmental degradation. In 2001 Asia accounted for one-third of global
CO2 emissions (7.4 billion tons),11 but it accounted for nearly half of the
world’s greenhouse gas emissions by 2008 (over 10 billion tons).
In terms of regional security, Asia has five of the world’s ten largest
standing armies (in China, India, North Korea, South Korea, and Vietnam)
and two of the world’s four largest surface navies (if the US and Russian
navies are included, along with China and Japan).12 In terms of total defense
expenditure, Asia overtook European nations in 2012 ($287.4 billion for Asia
versus $259 billion for European countries), accounting for 20 percent of the
global total.13 The International Institute for Strategic Studies (IISS)
estimated that China and Japan had the second- and fourth-largest defense
budgets in the world in 2013 (the United States ranked first and Russia third).
As Ralph Cossa’s chapter indicates, almost all militaries across the Asian
region are modernizing their forces.14 For most, this involves importing
sophisticated weaponry from abroad. Six of the world’s top ten arms
importers are in Asia (China, India, Japan, Pakistan, South Korea, and
Taiwan), although on aggregate the Middle East still imports more.15

Taking Stock
Thus, by many measures, Asia ranks in the top tier globally. These trends are
only likely to accelerate in the future. Among other consequences, it means
that the entire world would be severely and negatively affected if Asia
experienced a major economic downturn, social catastrophe, or military
conflict.
Understanding these national capacities in Asia, as illustrated by the
indicators above, is an important starting point for understanding the complex
dynamics and stakes involved in Asian international relations.

THE ASIAN SYSTEM TODAY: A COMPLEX REGION IN

SEARCH OF COHERENCE

Since the end of the Cold War, the region has experienced a number of
complex trends (noted above), some new, some not. When taken together, the
separate elements constitute a regional order, although not necessarily a
system per se.16 Despite the proliferation of intergovernmental groupings,
which do constitute an architecture, in my view the Asian order is not (yet)
institutionalized enough and bound by pan-regional norms and regulations to
be accurately described as a regional “system” in international relations par-
lance. Asia comes nowhere near Europe in this regard. Nonetheless, there
definitely are defining characteristics of this order.
Asian international relations must be viewed both as a regional subset of
the global system and as possessing distinct regional properties. Samuel
Kim’s and Amitav Acharya’s subsequent chapters illustrate different ways of
thinking about these—both historically and theoretically. Analysts are well
advised to use both prisms when evaluating the regional system today. Even
if the historical features described by Professor Kim (which he identifies as
the “three transformations”) no longer define Asian IR today, their lingering
residual influence continues to be present in the minds of many Asians. As in
Europe and the Arab world, the burden of historical experiences (the
“international politics of memory”) weighs heavily on the collective
consciousness of Asians.
Samuel Kim’s chapter describes how the traditional hierarchical “Sinic” or
“Sinocentric” system (also referred to as the “tribute system”) characterized
Asia for centuries, and continues to cast its shadow today as China undergoes
its fourth “rise” in history. Many Asians wonder if China is trying to re-create
a modern-day version of the ancient hierarchical hegemonic system. What
has been described as the “Indic system,” which lasted from the fourth
through eighteenth centuries, still weighs heavily on the South Asian
subcontinent, although the region is now comprised of six sovereign states.
The European colonial systems, which penetrated into the region during the
eighteenth and nineteenth centuries, have also had a lasting impact on South
and Southeast Asian states and societies—although more on intrastate than
interstate systems. It was the colonial period that brought the nation-state to
Asia, and with it the concepts of sovereignty, defined boundaries, national
governments (many republican) and the “administrative state,” professional
militaries, modern higher education, and other key features of the modern
international system. While the European colonial powers did bring these
elements of modern nationhood to Asia, colonialism simultaneously fostered
national identities across the region. Thus, in one sense, the colonial era can
be considered the midwife between the traditional Sinic and Indic systems
and the modern nation-state system.
 Japan’s ascendance from the late nineteenth through the mid-twentieth
century also defined the regional (dis)order for half a century, and its horrific
consequences continue to lie not far below the surface of Asian minds and
memories today (particularly in those societies once occupied by Japan). The
Cold War in Asia also defined (and polarized) the regional order from 1950
to 1991. While it embodied the same global feature of bipolar competition
between the United States and the former Soviet Union, the Cold War in Asia
also had its own unique characteristics owing to nationalist and communist
revolutions in Korea, China, Vietnam, and other Southeast Asian societies.

THEORETICAL ALTERNATIVES

There is no shortage of theoretical explanations or alternative models

attempting to characterize the Asian regional order/system. The contributors
to a stimulating book, International Relations Theory and the Asia-Pacific,
edited by G. John Ikenberry and Michael Mastanduno, offered a number of
alternatives: hegemonic stability theory, balance of power theory, Liberal
institutionalism, Constructivist theory, normative socialization theory,
identity theory, economic interdependence theory, and hierarchical stability
theory.17 In another major study, Muthiah Alagappa identified three
conceptions of regional order: hegemony with Liberal features, strategic
condominium/ balance of power, and normative-contractual conceptions.18 In
my earlier edited book Power Shift, I identified seven distinct alternative
models (hegemonic system, major power rivalry, “hub-and-spokes”
American-centric alliance system, concert of powers, condominium of
powers, normative community, and complex interdependence) but concluded
(at the time) that only three (hub and spokes, normative community, and
complex interdependence) had sufficient explanatory power to characterize
parts of the contemporary Asian order—but none were sufficient alone to
define it in toto.19 Amitav Acharya’s subsequent chapter examines the utility
of the “Big Three” theories—Realism, Liberalism, and Constructivism—and
also finds that none alone is sufficient. What follows is my own brief
assessment of how these three major bodies of IR theory (and their various
offshoots) have been used to try to explain and predict Asian IR.
Realism and Its Adherents
The Realist school has enjoyed the predominant place in recent years, and for
two good reasons. First, modern regional history since the late nineteenth
century clearly reveals a region prone to great power rivalry and conflict. The
enduring rivalries in the region over time have included China-Japan, China-
Russia, Japan-Russia, United States–Russia, China–United States, China-
Vietnam, Vietnam-Thailand, China-India, and India-Pakistan.20 These
rivalries became manifest in no small number of regional wars: the Sino-
Japanese War of 1895, the Russo-Japanese War of 1898, the Spanish-
American War of 1898, the Sino-Japanese War of 1937–45 and the broader
Pacific War of 1941–45 (which engulfed all nations in the region), the
Korean War of 1950–53, the French Indochina War of the 1950s, the US-
Vietnam War of 1961–74, the US-Soviet-China Cold War of 1947–91, the
Sino-Indian War of 1962, the Indonesia-Malaysia konfrontasi conflict of
1962–66, the Sino-Soviet border war of 1969, the China-Vietnam War of
1979, and the China-Taiwan-US crises in 1958, 1960–61, 1995, and 1996.
These hot wars between major regional powers are ample testimony that
Asia has hardly been pacific over the past 120 years. In addition to these
interstate conflicts, Asia has been constantly prone to intrastate civil wars and
armed secessionist movements. Indonesia, the Philippines, Burma, Thailand,
Malaysia, China, and India have all been plagued by these internal
insurgencies for decades, and they continue in every one of these countries
today. Armed anti-colonial independence movements contributed further
domestic conflicts during the 1940s through 1960s.
Thus any analysis of Asia’s future must begin by taking into account its
violent past. This is why Princeton professor Aaron Friedberg has famously
argued that “Asia’s future is Europe’s past”—that is, rivalry among the major
powers in the region is inevitable and will result in sustained disequilibrium,
strategic competition, and wars.21 Another leading Realist, John
Mearsheimer, applies his “offensive Realism” theory (or what I would label
“hegemonic inevitability theory”) to Asia by arguing that China—like all
great powers before—will inevitably seek regional hegemonic dominance
and that this “structural asymmetry” between the rising power (China) and
existing dominant power (United States) will define the Asian order and
inevitably cause a great power war—unless, Mearsheimer argues, the United
States takes preemptive action to constrain China’s rise.22 Both Mearsheimer
and Friedberg argue that the only viable option to forestall inevitable conflict
with China is to preemptively block its rise.23 Ashley Tellis, another
prominent Realist scholar of Asian IR, shares the view that US-China
competition is inevitable and will be the defining feature of international
relations in Asia for years to come, even if conflict between the two does not
break out.24 Like Friedberg and Mearsheimer, Tellis too believes in the
imperative that the United States must maintain its predominant position and
hegemony in the region,25 but rather than arguing for containment, Tellis
argues for “balancing” against China.26 In addition to their arguments about a
US-China rivalry, Friedberg, Mearsheimer, and Tellis all foresee a region
beset by strategic competition. This is consistent with the Realist premise of
unbridled anarchy prevailing, unless constrained by a benevolent hegemon
(which they perceive to be the United States). While the Sino-American
dynamic is the central feature in their views about regional competition,
China’s regional rivalries with Japan, India, and a number of American allies
figure into their forecasts. But in all these cases, it is China’s rise, irredentist
territorial claims, aggrieved nationalism, and (in Friedberg’s case) domestic
political system that drive China to be the troublemaker in the region.
However, the Friedberg-Mearsheimer-Tellis School of Realism does not
have the last word on the subject. The Realist family encompasses many
other variants. The major challenge comes from other Realist scholars who
adopt a more traditional “balance of power” perspective that does not see
conflict as inevitable, that sees Asian states “hedging” or “balancing” against
a rising China,27 and that views the United States as still being the dominant
power in the region (Tellis also fits into this camp).28 The Obama
administration’s “pivot” (or “rebalancing” of strategic priorities) to Asia is
seen as the best evidence of the balance of power paradigm.29 For these
observers, the preponderance of power in the region unmistakably lies with
the United States and its allies—not only strategic and military power, but
also economic and cultural “soft” power. And it is the United States that
provides the “public goods” of security and stability to the region—what
Joseph Nye describes as the “oxygen” that permits the region to live. This
US-centric distribution of power is not an accident—it is the direct result of
two principal features: (1) decades of carefully cultivating alliances and non-
allied partnerships by the United States, and (2) China’s post-2009
“assertiveness” in the region (particularly its exaggerated maritime claims
and caustic nationalist rhetoric).30
Finally, there is a third sub-school of Realism that has a voice in debates
about the regional order. These are the “defensive Realists.” Unlike
Mearsheimer’s “offensive Realism,” whereby aspiring hegemons do all in
their power to maximize their national power in order to achieve and
maintain their hegemony, defensive Realists argue that in an anarchical
environment all states adopt “self-help” policies of strengthening
comprehensive national power in order to protect themselves. This is known
as “internal balancing”—as distinct from “external balancing” whereby
smaller nations align with larger ones to offset threats. The defensive Realists
primarily point to the region-wide trend of military modernization as
evidence of this trend in Asia.

Liberalism and Its Limits

In contrast to Realism, Liberal IR theorists view international relations in
Asia through different prisms. I use the word prisms (plural) intentionally,
because one can discern at least three different strands of Liberal thinking.
The first are those who focus on the political economy of the region and
emphasize the deep and extensive interconnectedness and interdependence
among Asian economies. This can be described as “commercial Liberalism”
(with Asian characteristics). The second cohort emphasizes politics—
particularly the region-wide trend toward democracy (again with “Asian
characteristics”) since the 1990s. To be sure, there are still states such as
China, North Korea, and Vietnam that have bucked this trend—but, in one
form or another, every other country in Asia has democratized to some extent
over the past two decades. This can be described as “political Liberalism.”
Concomitant with the trend toward democratization has been a reduced role
of militaries in national politics across the region. The political Liberals also
adhere to “democratic peace theory”—that is, that democracies do not fight
each other. Third, there are “Liberal institutionalists” who emphasize
interstate multilateral mechanisms and institutions that try to promote
cooperation and common standards for regional behavior. These three Liberal
perspectives on Asian IR are not mutually exclusive,31 yet they all have a
distinctly more positive vision for the Asian region than the pessimistic
Realists. They also strongly believe that the twin powers of deep
interdependence and growing multilateral institutions serve to bind countries
together and restrict strategic competition.32
Yet the Liberals must face up to the fact that all three variants have had
their limits in Asia. Commercial Liberalism has been the most successful,
with free trade agreements (FTAs) and market economies mushrooming
across the region. Yet the “invisible hand” of the Asian state remains very
strong in Asian economies. Similarly, although the regional trend toward
democratization has been both notable and positive, “democracy with Asian
characteristics” still does not sanctify individual and human rights, or civil
society, as in the West. Finally, although regional multilateralism has also
flourished, it too has “Asian characteristics”—lack of institutionalization,
lack of enforcement capacity, and lack of legal foundations. While Liberal
theorists should take heart from the growth of these three developments in
Asian IR over recent decades—and they are commendable when seen against
the historical backdrop of dictatorial states—nonetheless Liberal institutions
and practices in Asia still have a way to go.

Constructivism’s Cohort
Finally, IR Constructivists reject the applicability of the Realist paradigm,
embrace some of the Liberal paradigm, and have alternatively argued that
Asia is experiencing the emergence of shared norms about interstate
interaction, rooted in the “ASEAN Way,” which are becoming rooted in
regional institutions.33 Unlike Realists or Liberals who emphasize material
and institutional factors among states, Constructivists focus on ideas that are
“socially constructed” as behavioral norms among and across societies. The
formation, socialization, and transmission of individual and national
identities are important processes for Constructivists.34
One variant of the Constructivist approach is the view that China’s
historical regional hegemony was both benign and rooted in Confucian
values and norms, which were accepted by other Asian societies, and that
there is a similar “gravitational pull” toward a China-centric order again
emerging in the region (and that this is seen as the most “natural” order and
equilibrium for Asia). The foremost proponent of this viewpoint is David
Kang, who directly challenges the Friedberg thesis and argues that Asia is not
going to follow Europe’s past of great power competition, but is naturally
returning to a twenty-first-century version of the pre-nineteenth-century
Sinocentric hierarchical system, with many Asian states accommodating
themselves (“bandwagoning” in political science parlance) to China as the
emerging preeminent power in the region.35
 While no single IR theory explains all, each contributes in part to our
understanding of Asian international politics in the early twenty-first century
—what Amitav Acharya (drawing on Katzenstein and Sil) describes as
“analytical eclecticism.” Acharya’s subsequent stimulating chapter does
much to clarify and “unpack” these competing theories. Following Acharya’s
chapter, the following five chapters explore the dynamics of external and
regional powers respectively—while the four subsequent chapters “locate”
this competition in sub-regional contexts.

THE ROLE OF MAJOR POWERS

Asian international relations certainly continue to exhibit the features of

major power politics. Indeed, power politics has been a distinguishing feature
of Asian IR over time.36 Both Northeast and Southeast Asia have traditionally
been fulcrums of conflict (notably the Korean Peninsula, the Sea of Okhotsk,
the Strait of Malacca, Manchuria, and Indochina), while Central Asia has
been the scene of great power maneuvering (the “Great Game”).37
In the early twenty-first century, Asia remains the only region in the world
where all the major powers interact: the United States, Russia, China, India,
and Japan. As Sebastian Bersick’s chapter in this volume discusses, the
European Union also plays its role economically and diplomatically, although
not strategically or militarily. The chapters by Sheldon Simon, Martha Brill
Olcott, and Scott Snyder respectively illustrate that Southeast Asia, Central
Asia, and Northeast Asia (particularly the Korean Peninsula) are the principal
loci of major power interactions. Today, major power competition is again
affecting the Western Pacific and Asian region as the United States and China
vie for preeminence.
The chapters by Robert Sutter, Ralph Cossa, and Michael Yahuda all
argue that the United States remains the key “external balancer,” maintaining
peace and stability in the region. Michael Green’s and Hugh White’s chapters
explore the dynamics of America’s allied relationships with Japan and
Australia respectively, and the dilemmas that each nation’s relations with
China and the United States pose for each. But all these authors point to a
strong, engaged, and respected United States in Asia.
Since the end of the Cold War, the major powers’ roles in Asia have been
more those of complex interaction and interdependence than competition or
classic rivalry. But this may be changing, as there is strategic maneuvering
among these major powers—as the United States attempts to maintain its
post-war preeminence, China seeks to compete with the United States and
perhaps become the region’s leading power (whether by design or default),
Japan and India try to carve out relatively larger regional (and global) roles
for themselves, and Russia tries to “get back in the game” and reassert its
presence on the Asian stage. But such maneuvering remains fluid, and while
Washington and Beijing are increasingly competitive, they are not (yet)
locked in a dyadic struggle for dominance, as during the Cold War. The two
powers both compete and cooperate simultaneously, a condition I describe
elsewhere as “coopetition.”38 Indeed, a defining characteristic of major power
interaction in Asia today is that each of the powers maintains extensive and
interdependent ties with each other as well as other nations throughout the
region. Structural polarity is not (yet) present, as was the case during the Cold
War.
Japan, India, Australia, and Vietnam are all adopting both internal and
external means to balance China and augment their own security. While some
Southeast Asian states have pursued a counter-China hedging strategy,39
particularly as tensions have risen over disputed claims in the South China
Sea between China and five ASEAN states, the majority of ASEAN nations
have opted not just for a strong engagement policy toward China aimed at
tying Beijing into a web of intraregional mechanisms, but simultaneously to
bind other major powers into the regional order. In particular, scholar Evelyn
Goh argues that Southeast Asians want the United States to remain fully
engaged as the region’s “primary power,” at the top of a regional hierarchy of
powers. In this hierarchy, she has argued, ASEAN places China just beneath
the United States. She describes this as ASEAN’s “omni-enmeshment” and
“complex balance of influence” strategies, although it seems to be a strategy
oriented toward forging a de facto concert of powers.40 This Southeast Asian
strategy derives from the region’s internal sense of vulnerability, as well as
what Goh describes as its “profoundly ambivalent feelings towards China.”
In his chapter in this volume, Sheldon Simon shares Goh’s sense about
ASEAN’s “enmeshment strategy.”
Beijing has certainly not idly watched these actions around its periphery.
As Phillip Saunders’s chapter illustrates, China became much more proactive
following the 1997 Asian financial crisis and embarked on a concerted
“reassurance campaign” to persuade its neighbors that its rise poses no threat
to them or to regional stability.41 Saunders argues that Beijing’s power and
influence in Asia—economic, diplomatic, military, and ideational—has
grown significantly in recent years. As it has, it has created a distinct
uneasiness in just about every country in the region: the closer they get to—
and the more dependent they become on—China, the more nervous they
become. This has resulted in Asia’s own “hedging” behavior and a region-
wide preference for a robust presence by the United States to balance China
and provide at least an implicit sense of security.
Increasingly, China’s relationship with the United States casts a long
shadow over the entire region. Despite the wide variety of views about the
nature of the Sino-American strategic relationship, there appears to be
agreement among most analysts that this relationship has now become the
principal one defining the Asian strategic order—replacing the earlier view
held by many that the US-Japan relationship was most central.
Beyond recognizing the paramount importance of Sino-American
relations, two other widely shared assumptions among experts are that the
US-China-Japan triangle is the critical feature of the regional strategic (and
certainly the economic) order and that Asia cannot be strategically stable
unless the Sino-Japanese relationship is stable (which it is not). Michael
Green’s chapter in this volume argues that Japan’s position between the
United States and China is not fixed and could well change. He argues that a
severe diminution of US power and influence in the region would push
Tokyo to balance China more actively; but, alternatively, if China continues
its ascent toward regional preeminence, Tokyo would be confronted with the
awkward choice of accommodation to—or confrontation with—Beijing
(though he argues that this scenario is unlikely). Mike Mochizuki, another
astute analyst of Sino-Japanese relations and Japan’s China policy, argues
elsewhere that Tokyo always pursues a mixed “double hedge” strategy of
engagement and balancing—promoting security cooperation with the United
States while expanding its own defense capabilities to counter the rise of
China, but simultaneously developing commercial and diplomatic links with
China.42 Noted Japan historian Kenneth Pyle also argues that Tokyo has
pragmatically adopted a balanced wait-and-see approach to China’s rise,
which contains dual elements of engagement and balancing of China, but that
—above all—Japan’s leaders seek autonomy and do not want to become
hostage to the China policy of the United States.43 Pyle’s perspective reminds
us that while many Japanese policy elites live with the perpetual fear of
“abandonment” by the United States, particularly during periods when
Washington flirts with strategic cooperation with Beijing, another group
worries about being too closely tied to the United States.
It is apparent that the strengthening and redefinition of the alliance from
1998 to 2011 was mirrored by Japan’s own declining influence in Asia. In
other words, as Tokyo banked its future with Washington, its political capital
in Asia declined. This is not good for Japan, for Asia, or for the United
States. Tokyo may have felt more secure as Washington “had its back,” but it
can also be argued that a Japan that is not equally engaged with its neighbors
is far more insecure. A Japan that is closely integrated and active in Asia on
all levels is most conducive to Japan’s own security and to regional stability,
while a Japan tethered solely to the United States is not. Since Prime Minister
Abe returned to office in 2012, Japan has seemingly pursued both strategies
—a close reliance on Washington but a more engaged set of relationships in
the region. Yet vis-à-vis China, Japan’s relations have been steadily
deteriorating—with Japanese views of China reaching an all-time low of 7
percent “favorable” in 2013. The catalyst for the recent deterioration has been
the two nations’ competing territorial claims to islands in the East China Sea
— although underlying this spat lies more than a century of deep distrust.
While not all specialists would agree, many also recognize the new
importance of India’s rise in the world and in defining the regional order (see
T. V. Paul’s chapter), as New Delhi becomes increasingly involved on the
East and Central Asian stages. India’s dramatic economic growth, military
modernization, nuclear weapons capability, active diplomacy, and integration
into regional institutions have all raised New Delhi’s profile in Asia. This is
only expected to continue.
Finally, Russia is also trying to reassert itself in Asia. This is particularly
noticeable since Vladimir Putin returned to the presidency. While its
commercial interaction with the region remains minimal, Moscow is
leveraging its considerable energy resources to increase its influence among
Northeast Asian countries. Its arms sales to China and India also allow
Moscow to influence the Asian security environment. Diplomatically, the
Sino-Russian relationship is stronger than in decades. Russia is also one of
the members of the Six-Party Talks (SPT) on North Korea, and Moscow is
trying to become more engaged in other regional multilateral bodies. As
Martha Brill Olcott’s chapter details, Russia’s influence in Asia is greatest in
Central Asia.44 While Moscow has sought to reestablish itself as an Asian
player, its longer-term influence is weak due to geographical distance, lack of
economic competitiveness, and its essentially Eurocentric identity. But this
may be changing as well under Putin 2.0.

The Future of Major-Power Relations in the Region

Given the character and interactions described above, what is the overall
structural character of major power relations in Asia? Is the region “ripe for
rivalry,” as Aaron Friedberg has suggested?45 Is Europe’s past Asia’s future?
It must first be recognized that the principal major power relationship in
the region—between the United States and China—does contain elements of
classic major power rivalry and balance of power international politics. It
would indeed be unusual if this were not the case. Beijing and Washington do
not trust each other’s strategic intentions, are actively hedging against each
other and an uncertain future by competing for the loyalty of other Asian
states, and continue to share the intractable but potentially explosive Taiwan
issue. The opaqueness of China’s military modernization program and
strategic intentions, on the one hand, and the paranoid anti-China invective
often heard in Washington, on the other, both fuel the competition. While
Washington views the Obama administration’s “rebalancing” or “pivot” to
Asia as a response to China’s increased assertiveness (and to calls from
various regional states to strengthen its presence), for its part Beijing sees the
strategic reorientation as proof positive of hostility and “containment.” Thus
the two show signs of a classic “security dilemma.” Yet I would argue that
the Sino-American strategic competition remains a “soft rivalry,” as neither
has designated the other an overt adversary, both governments deal
extensively with each other, and both societies are deeply enmeshed in a
thick web of interdependence. Even if the rivalry hardened, it is unlikely that
it would lead to a bifurcation of international politics in the region, as other
Asian states are also deeply interdependent with both America and China,
and they would resist the false strategic choice of having to choose sides
between Beijing and Washington. As Hugh White reminds us in his chapter,
other Asian governments work hard to avoid this nightmare scenario and, as
such, act as important buffers against the emergence of Sino-American
hostilities and the polarization of international politics in the region. Nor are
China and the United States powerful enough to establish a dual hegemony
over the region, as the element of strategic competition in the relationship
forecloses the possibility of the two powers establishing a condominium over
the region—although on some issues they can work effectively together to
maintain regional peace and security.

An Asian Concert of Powers?

An alternative to major power rivalry could be the emergence of a concert of
powers in the region. Some factors would suggest this possibility, while
others do not. The relative decline in US power and influence combined with
the growth in Chinese and Indian power and influence, and the increased
coherence of ASEAN coinciding with its fortieth anniversary and adoption of
a new ASEAN Charter, have all contributed to rebalancing the distribution of
comprehensive power capabilities among these actors. The insipient strategic
rivalry between the United States and China noted above, however, is not
conducive to these two powers participating in a concert. But perhaps the
greatest countervailing factor is the China-Japan relationship. No Asian
concert can exist or function if the Sino-Japanese relationship is antagonistic
or dysfunctional (as it is today). For a genuine concert of powers to emerge in
today’s Asia, India and ASEAN would also have to be partners in co-
managing the region. Here too, however, we see instability and
suspiciousness in China’s relationships with India and ASEAN. Russia could
become a sixth partner in the concert over time, but it still has far to go to
become regularly involved in regional diplomatic, economic, and security
affairs.
Moreover, for such a concert to fully emerge would likely require both a
more explicit sense of shared community and responsibilities and a higher
level of institutionalization among the involved powers. The former requires
a more explicit agreement of shared normative views about regional order—
both minimum standards to be respected by all nations as well as maximum
aspirations of regional order and cooperation. The growing consensus on
norms of interstate relations among the signatories to the Treaty of Amity and
Cooperation (TAC) could conceivably form the normative basis of such
agreed “rules of the road,” although it is doubtful that the TAC would deter
any signatory state from using force when provoked. It is also unclear how
such a five-power concert would affect the existing American alliance system
in Asia. A concert of power would also require a new form of
institutionalized consultation exclusively limited to the five powers, which
would likely be resisted by those states that were excluded. Such an exclusive
grouping would likely aggravate other important regional actors, notably
Australia and South Korea, which would experience an unwelcome “second-
class” status. It is similarly unclear what such an arrangement would mean
for many of the existing multilateral forums in the region, particularly the
Asia-Pacific Economic Cooperation (APEC) community, the East Asia
Summit (EAS), and ASEAN + 3.
Thus, even if some conditions seem ripe for the emergence of an East
Asian concert, there also remain more serious impediments to realizing the
vision. To be sure, the underlying strategic suspicions among China and the
United States, China and Japan, Russia and the United States, India and
China, and Russia and Japan all exercise a restraining influence. It is difficult
to cooperate under conditions of strategic distrust.

THE FUTURE OF ASIAN MULTILATERALISM

For a concert of Asia to function in the twenty-first century, it too would

require a degree of institutionalization. The existing multilayered architecture
of regional multilateral groupings does not lend itself to such a concert-type
framework as it is too diffuse, non-binding, and underinstitutionalized.
Nonetheless, the proliferation of Asian multilateral intergovernmental
groupings has become a distinguishing feature of the regional order, as
discussed particularly in the chapters by Sheldon Simon and Ralph Cossa.
The Asian multilateral architecture currently consists of the following:

• The Association of Southeast Asian Nations (ASEAN) brings together

the ten nations of Southeast Asia.
• The East Asia Summit (EAS) which brings together sixteen countries
from across the Asian region.
• The Asia-Pacific Economic Cooperation (APEC) is a Pacific Rim group
that brings together East Asian nations with those of the Western
Hemisphere (the Pacific Rim countries).
• The Shanghai Cooperation Organization (SCO) brings together China,
Russia, and the six Central Asian states (with Iran, India, and the EU as
observers).
• The South Asia Association for Regional Cooperation (SAARC) brings
 together eight nations in South Asia.
• The Asia-Europe Meeting (ASEM) brings together twenty-three Asian
and European nations.
• The Forum for East Asia–Latin America Cooperation (FEALAC) brings
together thirty-one nations from these two regions.
• The Pacific Economic Cooperation Council (PECC) brings together
twenty-six Pacific Rim countries.
• The Pacific Island Forum (PIF) brings together sixteen independent
states in the Western Pacific, with thirteen dialogue partners from East
Asia, North America, and Europe.
• ASEAN has fostered a dialogue with China (ASEAN + 1) and another
with China, Japan, and South Korea (ASEAN + 3).
• The ASEAN Regional Forum (ARF) is a security dialogue forum that
brings together twenty East Asian states with five from outside the
region (the United States, Canada, the EU, Bangladesh, and India).
• The United Nations Economic and Social Commission for Asia and the
Pacific (ESCAP) includes sixty-eight member states in East, South, and
Central Asia.

There also exists a wide range of regional organizations that address

specific issues—from organized crime to telecommunications to public health
to energy security and other functional areas—which meet at the ministerial
and expert levels. These intergovernmental groupings are supplemented by a
wide range of non-governmental or semi-governmental conferences and
groupings—such as the Council on East Asian Community (CEAC), the
Council for Security Cooperation in the Asia Pacific (CSCAP), and the
Shangri-La Dialogue on Asian security.
Despite this plethora of organizations, no single one brings all of the Asian
states together. Even the EAS and ARF, which are the most inclusive,
exclude Central Asian states. To date, most of these groupings have not
practiced “open regionalism.” That is, their memberships are limited to
subsets of countries. In lieu of a single pan-regional organization, what has
emerged is an architecture of overlapping bodies—similar to overlapping
tectonic plates beneath the earth’s surface—that supplement each other and
work together to foster regional cooperation and stability.
 SUB-STATE INTERACTIONS: BUILDING
INTERDEPENDENCE

While relations among major powers and other governments are the principal
defining characteristic of international relations in Asia, they are not the only
level of interaction. Different parts of Asian societies are autonomous actors
in their own right. In this respect, we can distinguish between foreign policy
(among governments) and foreign relations (among societies). International
relations today is certainly comprised as much by the latter as by the former.
This is the second level of analysis in Asian international relations, one which
the majority of analysts miss. To this end, let us consider some examples of
how Asian societies are increasingly knit together into a series of thick,
interdependent webs.
Perhaps the clearest indication of intraregional interdependence lies in the
trade realm. Since the 2001–2 economic recovery following the Asian
financial crisis of 1997, the percentage of trade within Asia increased
dramatically. All Asian nations now trade more with each other
intraregionally than extra-regionally. Intraregional direct investment also far
outstrips foreign direct investment (FDI) originating in Europe or North
America. Ed Lincoln’s chapter offers data and multiple examples of these
phenomena.
This surge in intraregional trade and investment has been facilitated by,
and has also stimulated, an avalanche of bilateral and regional free trade
agreements (FTAs) and preferential trade agreements (PTAs). By the end of
2009, 166 intraregional FTAs were in place, with an additional 62 under
negotiation,46 and there were approximately 150 PTAs in effect by 2010,
according to the World Trade Organization.47 This “noodle bowl” web of the
arrangements has further facilitated intraregional trade.48 With the exception
of the ASEAN FTA (which links its ten member states together) and the
ASEAN-China FTA (AFTA), which entered into full force in 2010, the
balance of these trade agreements are bilateral. Some consideration is being
given to a quadrilateral arrangement among ASEAN, China, Japan, and
South Korea (ASEAN 3), which ASEAN believes can become the basis of an
East Asian Free Trade Area (EAFTA), while Japan, South Korea, and China
are also considering a tripartite arrangement. China has also initiated what it
calls the Regional Comprehensive Economic Partnership (RCEP). Clearly,
though, the arrangement with the greatest potential is the prospective
TransPacific Partnership (TPP).
There are many other indicators of the interconnectedness sweeping Asia.
Consider, for example, tourism and higher education. Asian tourists with
disposable income are fanning out across the region in large numbers. In
2010, 204 million tourists visited the Asian region, accounting for 22 percent
of the global total.49 Travel is big business in Asia, producing $249 billion in
tourist-generated revenue that year.50
As the Asian economies and societies have developed rapidly,
opportunities for higher education have expanded around the region. Asia
now boasts a number of world-class universities. Seventeen Asian
universities ranked in the top one hundred of the World University Rankings
in 2012–13.51 A number of others are close to cracking the top tier, or have
already done so in certain subject areas. As a result, Asians are increasingly
staying within the region for their university educations, although the
numbers going to the United States or Europe remain very large. Chinese and
Indian universities now each graduate between 3 and 4 million students each
year. China alone enrolled 31 million students in college-level institutions
(including vocational schools) in 2010.52 China now enrolls 27 percent of the
university-age cohort, while South Korea and Japan enroll 50 percent. Asian
universities are also turning out increasing numbers of graduates in the
engineering and hard sciences—another indicator that their economies are
transitioning to newly industrialized status. China alone graduates
approximately 200,000 students with BAs in engineering per year,53 and in
2005 approximately 13,000 PhDs in science and engineering.54 Science and
engineering account for nearly three in five bachelors now conferred in
China, and the number of doctorates in the natural sciences and engineering
now exceeds those awarded in the United States. As Chinese universities
have revamped and upgraded their curriculums (through the national “985
Project”), they are becoming more attractive to foreign students for their
undergraduate and graduate training. These students come to China for
degrees in subjects other than Chinese studies. According to the China
Scholarship Council, in 2010 Chinese universities hosted 265,090 foreign
university students, 67.8 percent of whom came from other Asian nations.55
Australian, Japanese, and Singaporean universities are similarly attracting
large numbers of Asian students. For example, 64,000 of Australia’s 240,000
overseas students come from other Asian countries.
Reflecting the emphasis on education and innovation, Asians have begun
to garner an increasing share of Nobel Prizes. If V. S. Naipaul and Gao
Xingjian are included, who have emigrated from India and China,
respectively, Asians have been awarded fourteen Nobel Prizes since 1989.
This includes five Nobel Peace Prize winners: the Dalai Lama (India), Aung
San Suu Kyi (Myanmar), Kim Dae Jung (South Korea), Muhammad Yunus
(India), and Liu Xiaobo (China). In addition, four Japanese scientists, one
Japanese writer, one Indian economist, and one Chinese writer have been
awarded Nobel Prizes.
Asians are also increasingly linked via webs of professional associations,
organizations, conventions, conferences, trade shows, and other forums.
Some are government sponsored, but most are not. Electronic
communications facilitate further collaboration. Through these linkages,
Asians are collectively addressing and solving regional problems, and
thereby forging lasting partnerships and increasingly regional (rather than
national) identities. While “regionalization” may be occurring at the state-to-
state multilateral level, “regionalism” is occurring at the societal level.56
Some of these processes are the manifestation of globalization, as Nayan
Chanda’s chapter illustrates, while others result from breaking down barriers
among Asian governments—permitting Asian societies to develop their own
natural linkages. It would be interesting to have data on cross-national
marriages within Asia, but they are definitely rising. Labor migration across
national boundaries is also accelerating. It is commonplace to find Chinese,
Filipino, and Thai laborers and service sector workers throughout the region
today (8 million Southeast Asians worked outside their home countries in
2005). Certainly much of this labor mobility is illegal, and some is linked to
organized crime, the sex trade, and triads.

Non-Traditional Security
Another strong indicator of intraregional linkages is the plethora of “non-
traditional security” (NTS) challenges that know no national borders and now
span the region (see Ralph Cossa’s chapter). The NTS menu in Asia is as
complex as the region itself. It includes a prolific list of existing and potential
threats: the proliferation of weapons of mass destruction (WMD) and toxic
agents; pandemics and the spread of infectious diseases (e.g., SARS,
HIV/AIDS, avian flu); internal and illegal cross-border migration; trafficking
in illegal drugs and legal pharmaceuticals; various forms of human security,
including kidnapping and trafficking in women (for prostitution and forced
marriage) and children; financial contagion and economic insecurity;
environmental degradation (including acid rain, air pollution, haze, and toxic
spills); terrorism; Islamic fundamentalism; natural disasters (earthquakes,
tsunamis); arms smuggling; sea piracy; ethnic separatism and communal
conflicts; armed militias and insurgencies; religious and millenarian
movements (like Falun Gong); poverty and social inequality; energy security;
disputes over water resources (e.g., Mekong, Ganges); illegal fishing;
organized crime; cyber-crime; and so on.
This is a rich menu of serious challenges. What they all have in common
is the fact that they ignore national borders and thus require a recognition that
state sovereignty is not immutable, and collective action by both national
states and local authorities is required to effectively deal with the issues.

THE NEED FOR MULTIDIMENSIONAL ANALYSIS

From the phenomena discussed in this chapter, it is evident that international

relations in Asia today are multilevel and multidimensional phenomena: pan-
regional, intergovernmental, and intersocietal. These are not mutually
exclusive. They reinforce each other. They may be analytically distinct, but
they are interactive phenomena. To be sure, governments play a vitally
important role in facilitating intersocietal contact—through signing bilateral
agreements as a result of diplomatic relations, which permit sectors of
societies to interact with each other. In the absence of such agreements, no
students could be exchanged, tourists could not travel, trade would be illicit,
and so on. One need only look at isolated nations like North Korea and
Myanmar to understand the drawbacks of not enjoying the normal fruits of
diplomatic relations. All other nations in Asia are deeply enmeshed in the
web of ties that inter-weave their societies together. This bilateral interaction
is compounded significantly by the forces of globalization.57
While analysts and scholars traditionally tend to adopt (by design or
default) a Realist prism through which to view international relations in the
Asian region, thus focusing on states and major power interactions, it is
equally important to examine the sub-state level. Those who work in the
commercial and financial arenas pay scant attention to state actors—for them,
the real “stuff” of international relations occurs electronically and in a
millisecond. For intellectuals, what matter are ideas (which know no national
boundaries). Other professionals ply their trades directly with each other and
(mistakenly) care little about major power relations, security dilemmas, arms
races, diplomatic summits, and so forth. In other words, there exists a huge
sphere of intersocietal relations that normally escapes the purview of most
international relations analysts.
The last section of this chapter sought to “bring society back in” to the
analysis of international relations in Asia. In doing so, it only scratched the
surface in an illustrative way—but hopefully other scholars will undertake
further work at this level of analysis. Research on national identity formation
appears particularly promising.
“Bringing society back in” is not to diminish the importance of
governments and interstate relations. Particularly in regions such as Asia—
where both history and the present are testimony to the potential for interstate
conflict—one must be cognizant of the importance of major power relations.
Many of the chapters in this book dissect these interstate relationships, and
they remain vital to understanding international relations in Asia in the
twenty-first century. As in the previous two centuries, the potential for
violent conflict still looms on the horizon. But the deep interdependence
evident at the societal level can serve as a powerful buffer against potential
hostilities being realized. The growth of intra-Asian multilateral groupings
and institutions is a further buffer and facilitator of cooperation. While
international relations in Asia have historically known considerable conflict,
hopefully the future will be increasingly cooperative and peaceful—although
this is not at all certain. The intensification of major power rivalries,
competing nationalisms, and the increased militarization of the region
suggest a more unsettled future.

NOTES
1. For an excellent discussion of the role of norms in post–Cold War Asian international relations,
see Evelyn Goh, The Struggle for Order: Hegemony, Hierarchy, and Transition in Post–Cold War East
Asia (Oxford: Oxford University Press, 2013).
2. European Commission, “Communication,” in Europe and Asia: A Strategic Framework for
Enhanced Partnerships (Brussels: Commission of the European Communities, 2001), 6.
3. International Monetary Fund, World Economic Outlook Database 2013,
http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx.
4. International Telecommunications Union, The World in 2013: ICT Facts and Figures,
http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2013.pdf.
5. World Health Rankings, http://www.worldlifeexpectancy.com/life-expectancy-asia.
6. R&D Magazine, December 2012,
http://www.rdmag.com/sites/rdmag.com/files/GFF2013Final2013_reduced.pdf.
7. World Bank calculations, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG.
8. World Bank database, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG.
9. IMF, World Competitiveness Yearbook 2007, as cited in New Zealand Government, Our Future
with Asia (Wellington: Ministry of Foreign Affairs and Trade, 2007).
10. Cited in Ellen L. Frost, Asia’s New Regionalism (Boulder, CO: Lynne Rienner, 2008), 5.
11. European Commission, Europe and Asia, 6.
12. All figures are from the IISS, The Military Balance 2012 (London: Routledge, 2012).
13. Ibid.
14. See Ashley J. Tellis and Michael Wills, eds., Strategic Asia, 2005–2006: Military Modernization
in an Era of Uncertainty (Seattle, WA: National Bureau of Asian Research, 2006).
15. See IISS, The Military Balance 2007, 412; SIPRI Yearbook (2007),
http://sipri.org/contents/armstrad/output_examples.html.
16. For an illuminating discussion of the concept and typology of “order” in international relations,
see Muthiah Alagappa, “The Study of International Order: An Analytic Framework,” in Asian Security
Order: Instrumental and Normative Features, ed. Muthiah Alagappa (Stanford, CA: Stanford
University Press, 2003), 33–69; and Evelyn Goh, The Struggle for Order.
17. See G. John Ikenberry and Michael Mastanduno, eds., International Relations Theory and the
Asia-Pacific (New York: Columbia University Press, 2003).
18. Muthiah Alagappa, “Constructing Security Order in Asia: Conceptions and Issues,” in Asian
Security Order: Instrumental and Normative Features, ed. Muthiah Alagappa (Stanford, CA: Stanford
University Press, 2003), 72–78.
19. David Shambaugh, introduction to Power Shift: China and Asia’s New Dynamics, ed. David
Shambaugh (Berkeley: University of California Press, 2005).
20. “Russia” includes the former Soviet Union.
21. Aaron Friedberg, “Ripe for Rivalry,” International Security 18, no. 3 (Winter 1993/1994): 5–33;
Aaron Friedberg, A Contest for Supremacy: The United States, China, and the Struggle for Mastery of
Asia (New York: Norton, 2012).
22. John Mearsheimer, The Tragedy of Great Power Politics (New York: Norton, 2001), concluding
chapter.
23. See Friedberg, A Contest for Supremacy; John Mearsheimer, “China’s Unpeaceful Rise,” Current
History 105, no. 690 (April 2006): 160–62; Mearsheimer, The Tragedy of Great Power Politics.
24. See Ashley Tellis, “U.S.-China Relations in a Realist World,” in Tangled Titans: The United
States and China, ed. David Shambaugh (Lanham, MD: Rowman & Little-field, 2012).
25. Ashley Tellis, “Preserving Hegemony: The Strategic Tasks Facing the United States,” in Strategic
Asia 2008–2009: Challenges and Choices, ed. Ashley Tellis et al. (Seattle and Washington, DC:
National Bureau of Asian Research, 2008).
26. Tellis, “U.S.-China Relations in a Realist World.”
27. Evan Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” Washington
Quarterly 29, no. 1 (Winter 2005/2006): 145–67.
28. See Robert Sutter’s chapter in this volume, and his China’s Rise: Implications for US Leadership
in Asia, Policy Studies 21 (Washington, DC: East-West Center Washington, 2006). Also see Daniel
Twining, “America’s Grand Design in Asia,” Washington Quarterly 30, no. 3 (2006): 79–94; and
Thomas Christensen, “Fostering Stability or Creating a Monster? The Rise of China and US Policy
toward East Asia,” International Security 31, no. 1 (Summer 2006): 81–126.
29. See David Shambaugh, “Assessing the U.S. ‘Pivot’ to Asia,” Strategic Studies Quarterly,
Summer 2013, http://www.au.af.mil/au/ssq/digital/pdf/summer_2013/sham baugh.pdf. Also see
“Roundtable: Regional Perspectives on U.S. Strategic Rebalancing,” Asia Policy, January 2013.
30. See, for example, the chapters in Ashley Tellis et al., eds., Strategic Asia 2011–2012: Asia
Responds to Its Rising Powers (Seattle and Washington, DC: National Bureau of Asian Research,
2011).
31. See, for example, T. J. Pempel, “Introduction: Emerging Webs of Regional Interconnectedness,”
in Remapping East Asia: The Construction of a Region, ed. T. J. Pempel (Ithaca, NY: Cornell
University Press, 2005).
32. This is even the case in US-China relations. See G. John Ikenberry, “The Rise of China, the
United States, and the Future of the Liberal International Order,” in Shambaugh, Tangled Titans. Hugh
White’s provocative book The China Choice also adopts an essentially Liberal position when he calls
for a “concert of powers” and a kind of “grand bargain” between the United States and China. See
Hugh White, The China Choice: Why America Should Share Power (Oxford: Oxford University Press,
2013).
33. See, in particular, the writings of Amitav Acharya, “How Ideas Spread: Whose Norms Matter?
Norm Localization and Institutional Change in Asian Regionalism,” International Organization 58
(Spring 2004): 239–75; Amitav Acharya, Constructing a Security Community in Southeast Asia:
ASEAN and the Problem of Regional Order (London: Routledge, 2001); Amitav Acharya, “Will Asia’s
Past Be Its Future?” International Security 28, no. 3 (Winter 2003/2004): 149–64; and Amitav
Acharya, “Regional Institutions and Asian Security Order: Norms, Power, and Prospects for Peaceful
Change,” in Asian Security Order: Instrumental and Normative Features, ed. Muthiah Alagappa
(Stanford, CA: Stanford University Press, 2003), 210–40. Also see Alice D. Ba, ed., [Re]Negotiating
East and Southeast Asia: Region, Regionalism, and the Association of Southeast Asian Nations
(Stanford, CA: Stanford University Press, 2009); and Goh, The Struggle for Order.
34. In this regard, Gilbert Rozman has been pioneering some interesting research on East Asian
national identities. See Gilbert Rozman, ed., East Asian National Identities: Common Roots and
Chinese Exceptionalism (Washington, DC, and Stanford, CA: Woodrow Wilson Center Press and
Stanford University Press, 2012).
35. David Kang, China Rising: Peace, Power, and Order in East Asia (New York: Columbia
University Press, 2007); David Kang, “Getting Asia Wrong: The Need for New Analytic Frameworks,”
International Security 27, no. 4 (Spring 2003): 57–85. See also David Shambaugh, ed., Power Shift:
China and Asia’s New Dynamics (Berkeley: University of California Press, 2005).
36. Alagappa, “International Politics in Asia: The Historical Context,” in Asian Security Practice:
Material and Ideational Influences, ed. Muthiah Alagappa (Stanford, CA: Stanford University Press,
1998), 111.
37. Peter Hopkirk, The Great Game: The Struggle for Empire in Central Asia (London: Kodansha
Globe, 1994).
38. David Shambaugh, “Tangled Titans: Conceptualizing the U.S.-China Relationship,” in
Shambaugh, Tangled Titans.
39. Evelyn Goh, Meeting the China Challenge: The U.S. in Southeast Asian Regional Security
Strategies, Policy Studies 16 (Washington, DC: East-West Center Washington, 2005).
40. Evelyn Goh, “Great Powers and Hierarchical Order in Southeast Asia: Analyzing Regional
Security Strategies,” International Security 32, no. 3 (Winter 2007/2008): 113–57.
41. Also see Bates Gill, Rising Star: China’s New Security Diplomacy (Washington, DC: Brookings
Institution Press, 2007); Robert Sutter, China’s Rise in Asia: Promises and Perils (Lanham, MD:
Rowman & Littlefield, 2005); Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is
Transforming the World (New Haven, CT: Yale University Press, 2007); Shambaugh, “China Engages
Asia,” 64–99; David Shambaugh, “China’s New Diplomacy in Asia,” Foreign Service Journal 82, no.
5 (May 2005): 30–38; Evan Medeiros and M. Taylor Fravel, “China’s New Diplomacy,” Foreign
Affairs 82, no. 6 (2003): 22–35.
42. Mike M. Mochizuki, “China-Japan Relations: Downward Spiral or a New Equilibrium?,” in
Power Shift: China and Asia’s New Dynamics, ed. David Shambaugh (Berkeley: University of
California Press, 2005), 135–50; Mike M. Mochizuki, “Dealing with a Rising China,” in Japan in
International Politics: The Foreign Policies of an Adaptive State, ed. Thomas U. Berger, Mike M.
Mochizuki, and Jitsuo Tsuchiyama (Boulder, CO: Lynne Rienner, 2007), 229–55.
43. Kenneth B. Pyle, Japan Rising: The Resurgence of Japanese Power and Purpose (New York:
PublicAffairs, 2007), 339.
44. Also see Richard Weitz, “Averting a New Great Game in Central Asia,” Washington Quarterly
29, no. 3 (Summer 2006): 155–67.
45. Aaron Friedberg, “Ripe for Rivalry: Prospects for Peace in a Multipolar Asia,” International
Security 18, no. 3 (Winter 1993/1994): 5–33.
46. “Asian Trade: The Noodle Bowl,” Economist, September 3, 2009.
47. World Trade Organization, World Trade Report 2011,
http://www.wto.org/english/news_e/pres11_e/pr635_e.htm.
48. See Peter A. Petri, “Multitrack Integration in East Asian Trade: Noodle Bowl or Matrix?,” Asia
Pacific Issues (East-West Center Report No. 86, Honolulu, 2008); Asian Development Bank, “Asian
FTAs and the Noodle Bowl” (Asian Development Bank Institute Working Paper, Manila, 2009).
49. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), Statistical
Yearbook for Asia and the Pacific 2011, http://www.unescap.org/stat/data/syb2011/iv-
connectivity/tourism.asp.
50. Trade and Tourism Division, ESCAP, Study on the Role of Tourism in Socio-Economic
Development (Bangkok: ESCAP, 2007), 12.
51. Times Higher Education Supplement, “World University Rankings 2012–2013,”
http://www.timeshighereducation.co.uk/world-university-rankings/2012-13/world-ranking.
52. Ministry of Education, Higher Education in China 2011,
http://202.205.177.9/english/higher_h.htm. Also see Kyna Rubin, “Where the Students Are in East
Asia,” International Educator 16, no. 4 (July/August 2007): 28.
53. As cited in Kishore Mahbubani, The New Asian Hemisphere: The Irresistible Shift of Global
Power to the East (New York: PublicAffairs, 2008), 64.
54. Bruce Stokes, “China’s High-Tech Challenge,” National Journal, July 30, 2005, 2454.
55. China Scholarship Council, Study in China, http://en.csc.edu.cn/laihua/news.
56. For a good discussion of this distinction, see Frost, Asia’s New Regionalism, 6–17.
57. Also see Samuel S. Kim, ed., East Asia and Globalization (Lanham, MD: Rowman & Littlefield,
2000).
 Part Two
LEGACIES AND THEORIES
 Chapter Two
The Evolving Asian System
Three Transformations
SAMUEL S. KIM

Does history repeat itself in Asian international relations? Will the future of
Asia resemble the past? Asia’s or Europe’s past? In the post–Cold War years,
these questions of both theoretical and real-world significance have been
debated among scholars and policy pundits of diverse normative and
theoretical orientations, only to generate many competing prognostications.
For analytical purposes in this historical chapter, only two “back to the
future” models are worth noting as points of departure.
The first is a Realist “Asia’s future will resemble Europe’s past” school of
thought. This dominant paradigm foresees a conflictual future spurred by
major power competition, the rise of China, and the destabilizing political
dynamics associated with power transitions. This vision of the future has
been led by Aaron Friedberg and other “pessimistic” Realists. They see Asia
as primed for the revival of a classical great power rivalry as Europe
experienced over the past several centuries. In short, Asia’s future is
considered ready-made to repeat Europe’s war-prone past.1
An alternative second view is a Sinocentric “back to the future of Asia’s
past” school. Applying the “clash of civilizations” theory to the “rise of
China” debates, Samuel Huntington argued that Asian countries will be more
likely to bandwagon with China than to balance against it. Huntington and
other proponents of this view argue that European-type hegemonic wars and
a European-style balance of power system have been absent from Asia.
Instead, for 2,000 years before the arrival of the Western powers in the mid-
nineteenth century, “East Asian international relations were Sinocentric with
other societies arranged in varying degrees of subordination to, cooperation
with, or autonomy from Beijing.”2 Asia’s Sinocentric past, not Europe’s
multipolar past, concluded Huntington, “will be Asia’s future,” even as
“China is resuming its place as regional hegemon.”3
A more recent proponent of this paradigm is David Kang, who argues that
Asian international relations have historically been more peaceful and more
stable than those in the West, owing to the region’s historical acceptance of a
hierarchical world order with China at its core.4 Kang makes a sweeping
assertion that the Asian international system from 1300 to 1900 was both
intensive and extensive as well as stable and hierarchic, thus posing a major
challenge to the argument that balance of power is a universal phenomenon
across time and region. Indeed, Kang claims that “accommodation of China
[bandwagoning] was the norm in East Asia during the Ming (1368–1644) and
Qing (1644–1911) eras.”5 Accordingly, this group of scholars argues that
Asia’s Sinocentric hierarchical past, not Europe’s multipolar past, would
guide and ensure its future stability.
Asian history may provide a baseline for a comparative diachronic
analysis and assessment of the changes and continuities in the evolution of
the “Asian” system in modern times. What follows is neither a full history
nor an argument in support of historical or cultural determinism, but only a
broad synopsis of some salient and system-transforming events in the history
of the region. In pursuit of this line of inquiry, this chapter provides a
historical overview of the “Asian” international system as it evolved and
mutated through three systemic transformations from the early nineteenth
century to the end of the Cold War. The first of four sections critically
appraises the main features of the Chinese tribute system as well as its
progressive unraveling from the Opium War of 1839–42 to the Sino-Japanese
War of 1894–95. The second section examines the rise and fall of the
Japanese imperial system from the end of the Sino-Japanese War in 1895 to
the end of World War II (the Pacific War) in 1945. The third section
examines the rise and demise of the Cold War system (1947–89). The fourth
and concluding section looks at the impacts and implications of these three
systemic transformations for the future of Asian international relations in the
post–Cold War world and twenty-first century.
The geographical scope of this chapter, defining “Asia” as mainly
including East Asia but not South Asia, requires some explanation.6 Because
of its size and central location, China physically dominates Asia, impinging
on all of Asia’s sub-regions, with borders adjoining more countries than any
other nation-state in the world. Asia is and becomes Sinocentric not only in
geographical terms but also in systemic terms. Moreover, the rise of China is
often conflated with the rise of East Asia, where China constitutes some 70
percent of the region.7 In terms of the level and intensity of interstate
interaction, which is the key marker of an international regional system, the
waxing and waning of Chinese power has always been one of the defining
characteristics of all “Asian” systems. Although historically there were two
distinct interstate systems in Asia—the “Sinic system” in East Asia and the
“Indic system” in South Asia8—in the following discussion the Indic system
is excluded because it withered away with the advent of British rule during
the periods of the Chinese tribute system and the Japanese imperial system.
Even during the period of the Cold War system, India was a founding father
of the Non-Aligned Movement (NAM) and remained mostly outside the
bifurcated Cold War system. Before World War II, “Southeast Asia” had no
particularly defined regional identity and had been known by a number of
different names (e.g., “further India,” “Indochina,” “Little China,” or “the Far
Eastern tropics”). It was Japan’s invasion and occupation in the early 1940s
that gave rise to the term “Southeast Asia.”9

TRANSFORMATION I: THE CHINESE TRIBUTE SYSTEM

The image of world order in traditional China seems to bear out the
sociological maxim that people and nations react not to the objective reality
of the world but to their perception of that reality. In theory, if not always in
practice, the traditional Chinese image of world order remained tenaciously
resistant to change. It was the Chinese officials’ image of what the world was
like, not what it was actually like, that conditioned their response to
international situations. The strength and persistence of this image were
revealed most dramatically during the first half of the nineteenth century,
when China was faced with a clear and continuing threat from the imperialist
West.
What is so striking about the traditional Chinese image of world order—at
least the high Qing scholar-gentry class—is the extent to which it was
colored by the assumptions, beliefs, sentiments, and symbols of their self-
image.10 Indeed, world order was no more than a corollary to the Chinese
internal order and thus an extended projection of the idealized self-image. As
John King Fairbank reminded us, even during the golden era of the
Sinocentric world order, “China’s external order was so closely related to her
internal order that one could not long survive without the other.”11 In other
words, even imperial China with all its pretensions of normative self-
sufficiency could not really live in isolation—it needed outside “barbarians”
(yi ren) in order to enact and validate the integrity of its different identity.
The chief concern of China’s traditional foreign policy centered upon the
means of making diplomatic practice conform to that idealized self-image. At
times, the desire to preserve the purity of its self-image led to a distortion of
the official record so as to square deviant practice with idealized theory.12
The absence of any rival civilization also became a major factor in the
development of the Chinese image of world order, and natural geographical
barriers exerted considerable influence. China is guarded on the west by
almost endless deserts, on the southwest by the Himalayan range, and on the
east by vast oceans. Admired but often attacked by the “barbarians” of the
semiarid plateau lands on the north and west, and cut off from the other
centers of civilization by oceans, deserts, and mountains, China gradually
developed a unique sense of its place under heaven.
What is even more striking, if not all that surprising, is the absence of a
nationalistic dynamic in the enactment of identity; for judging by the
contemporary usage, the Chinese identity as mobilized in specific response to
the Western challenge was more civilizational than national. As in days of
yore, such civilizational identity was presumed to reproduce itself in
expanding concentric circles as the correct cosmic order. Hence we find in
traditional China a conspicuous absence of any institution corresponding to a
ministry of foreign affairs in the West. Only in 1861 was a proto–foreign
affairs bureau known as the Zongli Geguo Shiwu Yamen (General Bureau of
Foreign Affairs) established (or actually grafted onto the ancient
bureaucracy) at the insistence of the victorious British in the wake of the
Second Opium War of 1856–60. Relying on documentary and behavioral
referents of Qing diplomacy in the nineteenth century, historian Immanuel C.
Y. Hsü flatly declared, “Doubtless, imperial China was not a nation-state.”13
What, then, have been the real-world operational consequences of the
Sinocentric hierarchical image of world order? Although there is no Chinese
term, “tribute system” has been used by Western Sinologists to designate the
sum total of complex institutional expressions of the hierarchical Chinese
world order. The tribute system served a vital symbolic and political
“imperial title-awarding function”—that is, as investiture of a king in each
tributary state in order to assure Chinese suzerainty and supremacy—by
legitimizing the myth of the Middle Kingdom (China) as the universal
civilizational state governed by the Son of Heaven. What are conspicuously
absent here are the Westphalian principles of state sovereignty and state
equality as the foundational principles of modern international law.14
The tribute system worked relatively well for centuries, reaching its height
of classical refinement in the Ming (1368–1664) and Qing (1644–1911)
dynasties. Its longevity may have been due to its ability to foster mutually
complementary interests on the part of the tribute receiver and the tribute
bearer.15 Historian Morris Rossabi, among others, has argued that the Chinese
institution had a long tradition of interaction with Inner Asian states on equal
footing in pre-Qing times, especially when the dynasties were weak or
disintegrating, and that at such times China became more flexible and
pragmatic, accepting others as equals.16
For others, the tribute system proved to be useful in establishing and
maintaining their own political legitimacy at home. Korea, which had served
as a model tributary state longer than any other, is a case in point. The Sino-
Korean tributary relationship was more political than economic. The
Confucianized ruling classes in Korea found the tribute system not only
ideologically congenial—as expressed in the Korean term mohwa-sasang
(ideology of emulating things Chinese)—but also a sine qua non for
establishing and maintaining political legitimacy at home, explaining its long
duration thus: “To live outside the realm of Chinese culture was, for the
Korean elite, to live as a barbarian.”17 As late as the early 1880s, few Koreans
regarded their country as equal to or independent of China.18 Although many
Southeast Asian kingdoms sent tribute to China, such “tributary” relations
(except in Vietnam) “did not carry the same meaning and obligations as those
between China and the states in the Sinic Zone.”19
For many, however, the tribute system was accepted as an unavoidable
price to pay for the privilege of trade, and the China trade was sufficiently
lucrative to justify suffering whatever humiliation might be entailed in the
ritual requirements, especially the performance of the kowtow—nine
prostrations and three kneelings—symbolizing acceptance of the hierarchical
Chinese world order. In the face of the Russian challenge, the tribute system
demonstrated a capacity for adjustment to the power reality. Between 1728
and 1858, the tribute system really worked by avoidance as far as the Sino-
Russian relationship was concerned. A special system of communications
between court officials of secondary or tertiary rank in both St. Petersburg
and Beijing (Peking) was set up to bypass the sensitive question of the czar’s
having to address the Son of Heaven as a superior, while Russian trade
caravans to Beijing “could be entered in official Manchu court records as
tribute caravans, if necessary.”20 Thus, the Chinese image of world order was
preserved intact, while the Russians were allowed to pursue their commercial
activities in China without direct participation in the tribute system. As these
diverse examples show, so long as both parties viewed their respective
interests as complementary—or at least mutually acceptable—the tribute
system could continue to work.
The (first) Opium War (1839–42) marked a momentous benchmark event
in the reshaping of East Asian international relations in the nineteenth
century, the beginning of the end of the tribute system as well as the
commencement of China’s “modern” history.21 The crushing defeat of China
in its first military confrontation with the West failed to modify the
Sinocentric image of outlandish barbarians; rather the British resort to force
reaffirmed it. These conditions became not only the source of contradictory
policy for China but also the excuse for arbitrary use of force on the part of
the Western powers. Denied any intercourse with the central government
ensconced in the Forbidden City and subjected to endless delays by the
provincial authorities, the Western powers lost no time in using gunboats at
the orders of consular officers to remedy their grievances in the treaty ports.
Such was the genesis of the so-called gunboat diplomacy that characterized
Western policy in China during much of this transitional or interwar period of
1842–56.
The conviction gradually grew among Westerners that the source of all
troubles was the anomalous mode of conducting diplomatic affairs at the
periphery—rather than at the center—of the Qing government, and that direct
contact and communication with the imperial court must be established as a
prerequisite to normal relations. Demand for such direct contact, whether for
the enhancement of trade or for diplomatic prestige, soon became universal
among contemporary foreign consuls, merchants, and journalists as well as
diplomatic representatives.
The ensuing Sino-Western conflicts in the interwar period of the 1840s
and 1850s, which were eventually resolved by the Arrow War of 1856–60
(the second Opium War), and the allied military expedition to Peking in 1860
highlighted the traditional Chinese image of world order on trial. China once
again suffered a humiliating defeat. The reinforced Anglo-French troops
launched an all-out military campaign, shooting their way to the capital,
burning and ransacking the Summer Palace (Yuanmingyuan), forcing the
emperor to flee to Jehol (Chengde), and securing all of their demands with
the ratification of the Tianjin Treaties (constituting the Second Treaty
Settlement) and the signing of the Peking Conventions in the fall of 1860.
The last fortress of the Chinese world order thus crumbled at the point of
Western bayonets. The formal acceptance by China of direct diplomatic
intercourse with the Western powers in 1860 marks the end of the long
journey China was forced to take, departing from the tribute system at first
with resistance and finally with great reluctance. The vestiges of the tribute
system continued until 1894 with Korea, but it was really destroyed beyond
repair in 1860.
Faced with the twin dangers of the internal disorder created by the Taiping
Rebellion (1850–64) and the external menace posed by the West, a
recurrence of the traditional bête noire of “internal disorder, external
aggression” (neiluan waihuan), China began a concerted campaign to put its
own house in order under the so-called Self-Strengthening (Ziqiang)
Movement (1861–95). Protected for the time being by the Cooperative Policy
of the Western treaty powers under the sympathetic leadership of the
American and British resident ministers, Anson Burlingame and Sir
Frederick Bruce,22 the Qing court was encouraged to initiate a series of self-
strengthening reform measures at its own pace and on its own terms. As a
result, some important reforms were adopted in the diplomatic, fiscal,
educational, and military fields with the help of an increasing number of
Western experts. In the end, however, the Self-Strengthening Movement
failed because the requirements for an effective response to Western
encroachment ran counter to the requirements of preserving the Confucian
internal order.23
The ideological disruption created by Western imperialism required a
revolutionary response, but the self-strengthening reformers were no more
than “realistic” conservatives who wanted to borrow Western science and
technology—especially “strong warships and efficient guns”—to preserve the
Confucian order. All the successive reform measures in economic,
administrative, and constitutional matters during the last quarter of the
nineteenth century also failed because what China needed was a system
transformation not only in institutions but, more importantly, in ideology.
Such an ideological transformation did not come about until China was
thoroughly humiliated by an Asian neighbor in the Sino-Japanese War of
1894–95. The vestigial influence of the traditional Chinese image of world
order was finally shattered beyond recall.
The net effect of all the concessions extracted by the treaty powers
amounted to an “unequal treaty system,” which China was unable to change
until 1943. It is ironic, then, that China’s struggle to preserve its hierarchical
system of world order as expressed in the tribute system should have ended
with acceptance of the unequal treaty system imposed by the West. China’s
response to the West should not be viewed within the framework of the
Eurocentric international system. The Sino-Western confrontation was no
less than a system-to-system conflict between two diametrically opposed
images of world order. The Second Treaty Settlement represented the
subordination of the traditional Chinese world order and the tribute system to
the Eurocentric system of international relations.

TRANSFORMATION II: THE JAPANESE IMPERIAL

SYSTEM

Paradoxically, the rise of Japan in the last quarter of the nineteenth century
seems in no small measure due to the Western penetration and dominance of
Asia during this century of colonialism and imperialism. Indeed, the
nineteenth-century history of Asian international relations can be summed up
in terms of three critical geopolitical transformations. First, the rise of the
West, and particularly Great Britain as the dominant hegemonic power,
resulted in all the South and Southeast Asian kingdoms and states (except
Nepal and Thailand) falling under European colonial rule; the subordination
of Asia within the Eurocentric world system was complete by the end of the
nineteenth century. Second, China lost its long-standing position as the
dominant regional power due to the progressive decay of the empire, the
discrediting and demise of the tribute system, and the gradual disintegration
of the state together with the division of coastal Chinese territory into
“spheres of influence” among Western and Japanese colonial powers. The
nineteenth century began with China still the most dominant regional power
—but ended with China as semi-sovereign, or as a “hypo-colony.”24 Third, a
rising Japan replaced China as the dominant regional power, starting to
expand by fits and starts its own Japan-centric imperial system, the prologue
to the “Greater East Asian Co-Prosperity Sphere” as a way of countering
Western imperialism.25
Symbolically and strategically, the Opium War has come to represent the
most significant system-transforming point in the history of Asian
international relations. For China it marks the transition from the pre-modern
to the modern era. For Great Britain it marked the rise as the dominant power
in East Asia and in the Indian Ocean. And for Japan it is the beginning of a
momentous ideational change in the Japanese image of China from
admiration to contempt, with all the concomitant geo-strategic implications
for the Meiji Restoration in the second half of the nineteenth century.
In opening Japan to the West, the United States took the initiative in
showcasing its version of gunboat diplomacy. By the early 1850s, a
combination of interests, power, and ideology had led the United States to
expand its presence into the Asia-Pacific. Against this backdrop, Commodore
Matthew Perry arrived at Edo Bay with menacing “black ships” in 1853 to
carry out his mission to “open” Japan by diplomacy if possible or with
gunboat cannon if necessary. By succumbing to Perry’s demands and by
signing the Treaty of Kanagawa in 1854 and the United States–Japan Treaty
of Amity and Commerce of 1858, Japan’s two-hundred-year policy of
seclusion came to an end, paving the way for the rise of the Meiji Restoration
(1868–1912). The provision of a “most favored nation” clause in Article 9 of
the Treaty of Kanagawa was most significant for the creation of an unequal
system as the Europeans came, one after another, adding extraterritoriality
and opening additional ports.26
Aided and abetted by the arrival of the Western warships, diplomats, and
merchants, the Meiji Restoration served as the chief catalyst and the final
blow for the demise of the 265-year feudalistic Tokugawa shogunate. The
success of the Meiji Restoration, unlike China’s Self-Strengthening
Movement, is evident in the time it took Tokyo to abolish the unequal treaty
system: only half as long as China. In 1899 Tokyo had won revision of the
unequal treaties, ending the extraterritorial privileges Westerners had enjoyed
in Japan.
During the last quarter of the nineteenth century, Meiji Japan’s domestic
reform and external expansionist policy developed in tandem, following the
logic, “If you can’t beat them, join them—and beat them by their own rules.”
Japan’s immediate challenge was to seek an equal status, with imperialism
and domination as later goals that came to be viewed as essential to
sustaining its great power status. Korea provided the most proximate and
logical geopolitical point of departure for seeking first equality and then
hegemony in greater East Asia. Through the Tokugawa Period that preceded
the Meiji Restoration, Korea’s relations with Japan proceeded with little
Chinese involvement. In contrast to the sadae chui (serving the great)
tributary relationship that traditional (Chosun) Korea had with China, foreign
relations with Japan were defined as kyorin (neighborly relations). The
Korean king and the Japanese shogun treated each other as equals and dealt
with each other through the medium of Tsushima, an island between Japan
and Korea.27
This began to change with the coming of the Meiji Restoration and
Japan’s opening to the West. Although Japan continued to maintain the same
type of relations with Korea, using Tsushima as an intermediary, national
opinion regarding Korea became more interested and expansionist, with some
intellectuals claiming a traditional tributary role for Korea vis-à-vis Japan.
Watching Russian and British interests in Tsushima and various parts of
coastal China grow, Japan knew that if it was going to take a dominant role
on the Korean Peninsula, it would have to hold off Western powers that
wanted to stake their own claims there.
In 1871 Japan and China signed the first East Asian treaty based on
Western international law. With the door open, Japan also began revising its
relations with Korea, first ending the tradition of conducting relations through
Tsushima. Following its 1874 expedition in southern Taiwan (a clear
challenge to China and a warning to Korea), Japan began taking bold actions
in Korea that led quickly to the Treaty of Kanghwa in February 1876.28 The
treaty declared Korea an “autonomous state,” terminating traditional relations
between Japan and Korea in favor of Westernized relations, and interaction
increased markedly.29 As if to seek equality with the British and American
gunboat diplomacy in earlier years, it now became Japan’s turn to open the
Hermit Kingdom.
These interactions, however, were far from universally positive. A mutiny
with an anti-Japanese character led to Japan demanding indemnity, while two
years later the Japanese were on the other side of the fence, involved in an
attempted coup by Korean progressives. China responded to the coup with
military force, and Japan, at the end of the event, again demanded reparations
from Korea.30 The Tonghak Rebellion of 1894 served as the proximate
catalyst for the Sino-Japanese War. During the war, the Japanese occupied
the royal palace in Seoul, remodeling the Korean government and instituting
detailed reform measures that covered almost all aspects of Korean life.31
Japan’s victory in the first Sino-Japanese War (1894–95)—the first shot of
the Japanese imperialist system—resulted not only in China’s loss of Korea
as the last tributary state, but also in the transfer of Taiwan (Formosa) and the
Pescadores Islands, and the ceding of the Liaodong Peninsula in Manchuria,
to Japan. It triggered a new round of survival-of-the-fittest competition
among Western powers at the expense of Japan as well as China. Despite its
victory in the war, Japan’s imperial ambitions and acquisitions were
somewhat scaled back when France, Germany, and Russia demanded that
Japan return to China both Port Arthur and the Liaodong Peninsula. Japan
complied, only to see the Western powers reap the fruits of their victory
through the scramble for exclusive spheres of influence over Chinese
territory.
Thus the stage was set for another war, this time with a European or
Eurasian continental power. Japan’s stunning victory in the Russo-Japanese
War of 1904–5, the first military victory by an Asian country over a
European power, was a benchmark event for the successful enactment of
Japanese national identity as a great power. The Treaty of Portsmouth (1905),
brokered by Theodore Roosevelt, gave Japan control over the Liaodong
Peninsula, Port Arthur, the southern half of Sakhalin Island, the southern part
of the railway built by the Russians in Manchuria, and—most important of all
—a free hand in Korea, which Japan formally annexed as a colony five years
later. Korea, the “dagger to the heart of Japan,” was thus transformed into a
springboard to further expansion in China and a major source of cheap food
with which to support Japan’s rapidly increasing industrial population.32
By and large, the twenty-five years after the Russo-Japanese War may be
viewed as a consolidation phase. Korea increased in importance to Japan as
the essential path to its newly acquired sphere of interest in southern
Manchuria. The Russians had conceded Japanese hegemony, and the British
posed no challenge. The secret 1905 Taft-Katsura Agreement brought about
Washington’s acceptance of Tokyo’s hegemony over the Korean Peninsula in
return for Tokyo’s acceptance of American hegemony over the Philippines as
well as an expression of support for the Anglo-Japanese alliance. Having
obtained support from the United States and Britain, Japan vigorously
pursued protectorate status over Korea, achieving in a November 1905 treaty
“control and direction of the external relations of Korea” and the stationing of
a resident-general in Seoul to manage diplomatic affairs.33 Within two years,
Russia and Japan reached an agreement that would allow for Japan’s official
annexation of Korea.34 Opposition to Japanese rule was squelched with brutal
efficiency, and the economic and strategic needs of the Japanese home
islands, rather than the interests of the Korean population, dictated the course
of Korean economic and social development.
These gains were increased further during the First World War. Having
joined the war on Britain’s side, Japan seized German concessions in China
and German possessions in the Northern Pacific. Because of its growing
dependence on US and British markets for trade, Japan yielded to US
pressure at the 1921–22 Washington Naval Conference to accept an
unfavorable battleship ratio of 5:5:3 for the United States, Britain, and Japan,
respectively. With the stock market crash of 1929 unplugging Tokyo from its
core overseas financial and commodity markets, imperialist tendencies
returned with a vengeance.35 Fearful that Manchuria was slipping from its
grasp, on September 18, 1931, Japan’s Kwantung army, after setting off an
explosion on the Japanese-owned South Manchuria Railroad in order to
allege Chinese provocation, began the military conquest of Manchuria. After
consolidating their hold on Manchuria with the puppet government of
Manchukuo in 1931–32, the Japanese gradually edged into a full-scale war
with China, triggering the second Sino-Japanese War in 1937. World War II
had begun in Asia two years earlier than in Europe.36
With the coming of war in Europe in September 1939, the Japanese
increasingly looked southward to exploit opportunities created by Hitler’s
pressure on Britain, France, and the Netherlands. Japan’s defeat by Soviet
and Mongolian forces near the Soviet/Mongolian border also accelerated
Japan’s southward expansion. In September 1940 Tokyo forced the French to
allow its forces to move into Indochina. And a few days later, on September
27, 1940, they concluded the Tripartite Pact—the Axis alliance—with
Germany and Italy.
Having, for all practical purposes, already eclipsed Great Britain as the
dominant power in East Asia, Japan felt confident enough to proclaim the
“Greater East Asian Co-Prosperity Sphere” (GEACPS or Dai-to-a Kyoeiken).
Although official proclamation came only in August 1940 as the policy to
create a self-sufficient “bloc of Asian nations led by the Japanese and free of
Western powers,” its core idea of liberating Asia from Western imperialism
was a strong current in Japanese thought from the Meiji period through
World War II. Fukuzawa Yukichi’s nationalist slogan, “To escape Asia,”
captured the imagination of a Westernizing Japan. Escaping from Asia meant
to abandon Sinocentric Asia, whereas entering Europe was to establish Japan
as a European-style great imperial power that could reenter Asia to establish a
new Japancentric world order. As Japan began to feel more secure and
confident with its stunning industrial and military accomplishments in the
early twentieth century, it flattered itself with the divine right to educate and
“civilize” the rest of Asia still slumbering in a state of “barbarism.” The
apogee of such thinking came in the form of the GEACPS, “which was
presented as a justification for Japanese military expansion in the name of
liberating Asia from Western imperialism.”37
Japan’s rise to primacy among the imperial powers in East Asia came with
incredible speed and vigor, transforming it from a victim of Western
imperialism to a victimizer of its Asian neighbors. Its initial military success
in Southeast Asia destroyed the myth of European superiority and paved the
way for national independence movements in the region. On December 7,
1941, Japan took a penultimate strategic gamble in attacking the American
fleet at Pearl Harbor. In the following six months Japan conquered Southeast
Asia, but defeat in the naval Battle of Midway in June 1942 eliminated
Japan’s capacity to carry the war to the Eastern Pacific. By the summer of
1943, Japanese troubles prompted them to offer more concessions to local
nationalists in the vain hope of gaining greater cooperation. In April 1945,
the Japanese suffered more than 300,000 casualties in Southeast Asia, where
the British (with American and Chinese assistance) completed the destruction
of Japanese forces on the mainland.38
World War II, along with the Japanese imperial (interregnum) system,
ended in Asia three months later than in Europe, even as it had started in Asia
two years earlier than in Europe. The legacies of the Japanese imperial
system are legion. Foremost among them for Southeast Asia was a process of
decolonization set in motion by imperial Japan that proved unstoppable—an
unintended boost to the liberation of Southeast Asian and South Asian
countries from Western colonial rule—and the transformation of political
units from kingdoms and empires into modern nation-states.39 For Northeast
Asia the historical scars and animosities still resonate strongly in post–Cold
War Sino-Japanese and Korea-Japanese relations.

TRANSFORMATION III: THE COLD WAR SYSTEM

In contrast with Europe, where a bipolar Cold War system emerged and
morphed into two competing, but relatively stable, multilateral security
institutions with the establishment of NATO in 1949 and the Warsaw Pact in
1955, the Cold War in Asia encountered and developed in tandem with such
turbulent transformations as national liberation movements, revolutions, civil
wars, and two major international wars. While Europe enjoyed a long “cold
peace” with no major armed conflict, the Asian Cold War turned into hot war
in Korea and Vietnam. With three of the four major Cold War fault lines—
divided Germany, divided Korea, divided China, and divided Vietnam—East
Asia acquired the dubious distinction of having engendered the largest
number of armed conflicts resulting in higher fatalities between 1945 and
1994 than any other region or sub-region. Even in Asia, while Central and
South Asia produced a regional total of 2.8 million in human fatalities, East
Asia’s regional total is 10.4 million including the Chinese Civil War (1
million), the Korean War (3 million), the Vietnam War (2 million), and the
Pol Pot genocide in Cambodia (1 to 2 million).40
Studies on the origins of the Cold War have concentrated on the Soviet-
American conflict over Europe and the Middle East, as if the Cold War in
Asia were but a corollary of its lateral escalation from elsewhere—or as if it
were the later, unfortunate but inevitable outcome of the Chinese Civil War.
Faced with the imminent fall of the Japanese Empire in 1945 and with a
threat of the Soviet Red Army pushing its way into the Korean Peninsula, the
minds of many American policy makers had already shifted to Japan as the
linchpin of a post-war Pax Americana in Asia.41 By the end of 1945, a de
facto Cold War in Asia had already begun as the United States and the Soviet
Union viewed each other as potential adversaries, with enormous
ramifications for the peoples and countries of Asia, including Southeast
Asian states long subject to European colonial powers.42 Inexorably, the post-
war trajectories of almost all the states of East Asia, if not of South Asia,
began to be keyed to superpower conflicts and rivalry.
The Cold War was under way in Asia with the declaration of the Truman
Doctrine on March 12, 1947, as the ideological turning point for the United
States’ global strategy and three of four major Cold War fault lines already
drawn or in the process: Korea, China, and Vietnam. The Cold War system
reflected three major features: a bipolar order of power, an intense ideological
conflict and rivalry, and fear of nuclear war (World War III).43 This bipolar
Asia constituted a break from the two previous attempts at regional
integration: the Chinese tribute system over much of the preceding
millennium and the ambitious but abortive Japanese imperial system in the
first half of the twentieth century.44 Nonetheless, what really held Washington
back from constructing the comprehensive Cold War alliance system in Asia
had much to do with domestic politics.
By any reckoning the Korean War (1950–53) was the single greatest
system-transforming event in the early post–World War II era, with the far-
reaching catalytic effects of enacting the rules of the Cold War game as well
as congealing the patterns of East-West conflict across East Asia and beyond.
It was the Korean War that brought about such features of the Cold War as
high military budgets (e.g., a quadrupling of US defense expenditures); the
proliferation of bilateral defense treaties with Japan, South Korea, Taiwan,
South Vietnam, the Philippines, and Thailand—the hub and spokes of the San
Francisco System—and an ill-conceived and short-lived multilateral security
organization, the Southeast Asia Treaty Organization (SEATO); and the
crystallization of East-West conflict into a rigid strategic culture dependent
on a Manichean vision of stark bipolarity.45
Particularly significant, but not sufficiently acknowledged, is the role of
the Korean War in the creation of Cold War identity for the two Koreas as
well as for the “Big Four” of Asian international relations—the United States,
the Soviet Union, China, and Japan.46 For both Koreas, the war experience
triggered a decisive shift in identity politics from the competition of multiple
identities to the dominance of the Cold War identity. The United States, too,
owes to the Korean War the crystallization of its Cold War identity—which,
in turn, gave birth to an American strategic culture that thrived on the image
of global bipolarity and the omnipresent communist threat. Until the latter
half of the 1980s, Soviet strategic culture was similarly anchored in and
thriving on its own Cold War identity. The simplicity of a stark, bipolar
worldview provided an indispensable counterpoint for the quest for
superpower identity and security in a region dominated by American
hegemony. Soviet geopolitical conduct seems to make no sense except when
viewed as the drive to assume a superpower role and to acquire equal status
with the United States in order to compensate for its siege mentality and to
legitimize its authoritarian iron hand at home.
The newly established People’s Republic of China almost single-handedly
rescued Kim Il Sung’s regime from extinction, but at inordinate material,
human, and political costs. In addition to more than 740,000 casualties47—
including Mao’s son—China missed the opportunity to “liberate” Taiwan,
was excluded from the United Nations for more than two decades, and lost
twenty years in its modernization drive. However, Beijing succeeded in
forcing the strongest nation on earth (the United States) to compromise in
Korea and to accept China’s representatives as equals at the bargaining table.
No one in the West would ever again dismiss China’s power as had General
Douglas MacArthur in the fall of 1950. Indeed, the Korean War confirmed
that China could stand up against the world’s anti-socialist superpower for
the integrity of its new national identity as a revolutionary socialist state.
For Japan, the Korean War turned out to be a godsend because Tokyo
reaped maximum economic and political benefits. Thanks to the Korean War,
Japan was converted from a defeated enemy to an indispensable regional ally
in the United States’ Asian strategy. The San Francisco System was designed
and constructed in 1951 as the Korean War was raging, in an effort to
integrate Japan into the “hub and spokes” of US-led Pacific Cold War
alliances through the non-vindictive San Francisco Peace Treaty (1951). The
system reflected and affected the Cold War structure of international relations
in Asia in general and Northeast Asia in particular.48
By the end of the Korean War, Tokyo had regained its sovereignty and
had skillfully negotiated a new mutual security treaty that provided for US
protection of Japan while allowing Tokyo to escape the burden of joint
defense. Without becoming involved in the bloodshed or material
deprivation, Japan was able to reap the benefits of a war economy and had
been imbued with new potential as a logistical base for the United States and
as a key manufacturing center for war supplies.
The Cold War logic and geo-strategic situation that emerged after the
Korean War also allowed Japan, aided and abetted by Washington, to deflect
scrutiny of its domestic politics. This resulted in the quick reintegration into
Japanese politics of individuals directly implicated in the expansion of
imperial Japan, the war against the United States, and wartime atrocities.
Emblematic of this phenomenon was the reemergence of Kishi Nobusuke,
who was the former head of the Manchurian railroad as well as minister of
munitions in the Tojo government and a signatory of the 1941 declaration of
war against the United States. Although he was held briefly as a Class A war
criminal after the war, Kishi returned to active politics in the 1950s and
became prime minister in 1957, a turn of events that would have been
unthinkable in the German context. Japan’s conservative leadership, who
gathered together under the umbrella of the Liberal Democratic Party (LDP)
after 1955, favored a narrative of the origins of the Pacific War that was
largely exculpatory, stressing the “defensive” motives behind the expansion
of the empire and neglecting the simmering issue of Japanese wartime
atrocities.
The United States and its Cold War allies were determined to contain
communism in Asia as in Europe, and Indochina became the next battlefield
in the Cold War. French efforts to restore imperial control by insisting that
Indochina was another arena in the Cold War gained credence as the
containment of communism became a greater American concern than
European colonialism or Asian nationalism. American assistance to the
French began as early as May 1950—even before the outbreak of the Korean
War on June 25, 1950—and increased substantially over the next few years.
As in Korea, the Vietnam War became internationalized with growing US
involvement. From the United States’ creeping containment in the 1940s and
1950s to the massive enlargement in money and troops in the second half of
the 1960s and the final desperate attempts of the early 1970s to seek a
diplomatic solution, its policies in Indochina had all ended in ashes, marking
the most disastrous chapter in post-war American foreign policy as well as
the beginning of the relative decline of US influence in world affairs.
Ironically, the United States had fought the Vietnam War ostensibly to
prevent the expansion of a monolithic communist bloc, but by early 1975
(even before the North Vietnamese troops marched into Saigon), Washington
was already aligning itself with Beijing to oppose the Soviets in the emergent
strategic triangle.
One of the many unexpected and paradoxical consequences of the Korean
War was that the Sino-Soviet alliance, formally forged on February 14, 1950,
was strengthened in the short run and weakened in the long run. The irony is
that the Sino-Soviet split became the unavoidable consequence of growing
equality in the alliance. The widening gap between Beijing’s rising demands
and expectations and Moscow’s inability and unwillingness to satisfy them
undermined an alliance rooted in shared values and shared fears. Still, Sino-
Soviet differences in 1956–58 were confined to esoteric intra-bloc
communications. From mid-1958 onward, the dispute began to escalate from
ideological to national security issues, reaching by early 1964 the point of no
return. The Soviet invasion of Czechoslovakia in 1968, the 1969 Sino-Soviet
military clashes on Zhenbao Island, and the ensuing Soviet threat to launch a
preventive attack on Chinese nuclear installations refocused Beijing’s and
Washington’s minds on strategic considerations. This transformation led
China to abandon the dual-adversary policy as it sought to improve US-
Chinese relations in order to offset the escalating Soviet threat.
While in Europe the Cold War ended with a bang, in Asia it withered
away in installments. Here again China was at the creation as well as the
gradual deconstruction. By the late 1960s, important premises and pillars of
the bipolar order in Asia had already begun chipping away. With the Sino-
Soviet conflict escalating to military clashes and a border war in 1969,
Moscow took several measures to isolate China, including the not-so-subtle
hint at the possibility of a nuclear strike, the anti-China proposal for an Asian
Collective Security System, and the 1971 treaty with India.49 Meanwhile,
China was seeking alignment with the United States to balance against the
Soviet Union even as the United States was seeking an exit from the
quagmire of the Vietnam War. Thus, the rise and fall of the strategic triangle
(tripolarity) was closely keyed to the rise and decline of Soviet power relative
to that of the United States.50
The Sino-American rapprochement in 1970–72—also known as the
“Nixon in China Shock” in much of Asia (especially in Japan)—came to
serve as the chief catalyst (and a force multiplier) for China’s belated grand
entry into the United Nations and UN Security Council as one of the five
permanent members in late 1971. By 1978 bipolarity had been not so much
destroyed—at least not yet—as shifted and mutated into a US-Soviet-China
strategic triangle. Even the Korean Peninsula as the last stronghold of the
Cold War could not remain unaffected by the changing geopolitical realities
in Northeast Asia: the two Koreas held the first-ever inter-Korean talks,
resulting in the North-South Joint Communiqué of July 4, 1972. In addition,
the Sino–South Korean rapprochement was well under way even before the
end of the Cold War, paving the groundwork for diplomatic normalization in
1992.
The Cold War system worked well in the establishment and maintenance
of American hegemony in the region until the beginning of the 1970s. But
there were economic ramifications as well. The growing costs of maintaining
a far-flung “hub-and-spokes” system undermined the strength of the dollar
and the fiscal foundations of US primacy.51
Japan’s economic resurgence, followed by that of the newly
industrializing countries, also increased American pressures for “burden
sharing without power sharing.” But in the end, as previously in history, the
American hegemon could not arrest the cycle of the rise and fall of a great
power, as the law of imperial overextension turns today’s dividends into
tomorrow’s debts with compound interest. Gorbachev’s Soviet Union was the
single greatest factor in the reshaping of Asia’s strategic context in at least
three separate but mutually interdependent ways—the end of the Cold War
bipolarity, Sino-Soviet renormalization, and Soviet-ROK normalization. “All
of this had happened by 1990,” as Robert Legvold aptly put it, “two years
before the collapse of the Soviet Union, and largely as the result of the
revolution that Gorbachev brought about in his country’s foreign policy. . . .
In the end, the demise of the triangle, which had been a profound
manifestation of the old order, became one of the profoundest manifestations
of its passing.”52

WHITHER THE ASIAN SYSTEM?

Taken together, these three system transformations lead to one obvious and
somewhat paradoxical conclusion: contrary to the Eurocentric and
Sinocentric “back to the future” models, there is no past that can serve as a
desirable and feasible guide for the future of Asian international relations.
Both the Japanese imperial system and the Cold War system reflected a sharp
break from their predecessors. The emerging post–Cold War Asian system
also represents a discontinuity from the three past systems tracked and
analyzed in this study.
The most obvious continuity over the years has been the centrality of the
Middle Kingdom, with the waxing and waning of Chinese power as the main
reality and critical factor. But the traditional hierarchical Chinese world order
—the tribute system—was neither intensive nor extensive, contrary to David
Kang’s assertion otherwise.53 The Indic system in South Asia, even during its
heyday before British rule, was largely disconnected from the Chinese tribute
system, while Southeast Asia, except Vietnam, also remained largely outside
of the Sinic zone, fighting its own wars among kingdoms of the region.
Despite the cultural and economic interaction among the countries in the
Sinic zone, there was no truly Asian international system that enveloped all
Asian sub-regions and countries. In terms of interaction, too, the exponential
growth of international trade, finance, and investment in the post–World War
II era and particularly in the post–Cold War era of globalization, along with
the full integration of post-Mao China into the global economic system, has
produced a level and intensity of interaction and interdependence such as the
world has never known.54
There is no disagreement that China is at the center of both competing
“back to the future” models. The more popular, Realist, Eurocentric balance
of power model, in which the rise of China is conflated with the rise of a
Chinese threat, suffers from several problems. The historically derived
correlation between system transition and war causation may no longer hold
—Asia has not had a single interstate war in the post–Cold War era. There
are many differences between ascendant China and the rise of Wilhelmine
Germany. The German case illustrates how national roles can change over
time. German nationalism quickly withered away after World War II,
whereas previous defeats (1806 and 1918) had only fueled more aggressive
nationalism. Harold James offers an explanation in the changing international
milieu—the changing international normative cycle—that molded German
national role expectations.55 Indeed, what distinguishes the post–World War
II international system, especially the post–Cold War Asian system, is the
extent to which regional and global multilateral institutions have become
integral parts of complex, increasingly interdependent regional and global
systems.56 In the post–Cold War era, thanks to globalization dynamics, the
games that Asian nation-states play have lost much of the Realist simplicity
of the struggle for power and plenty of the choice between anarchy and
hierarchy.57
The “back to the future” of the Sinocentric past model also fails to meet
the desirability and feasibility test. First, thanks to the colonial and post-
colonial (decolonization) experience, sovereignty in its full meanings has had
a profound impact on the aspirations of all the newly independent Asian
states. Consequently hierarchy—whether Sinocentric, Eurocentric, or
Americentric—is now more difficult to reconcile with the overwhelming
support of Asian states for state sovereignty, state equality, and non-
interference, even as solutions that were available for the problems of the
early 1800s are now much more difficult to obtain, while others,
inconceivable in the heyday of the tribute system, have become more readily
available. As Amitav Acharya argues, Asians are now coping with political
and economic challenges through “shared regional norms, rising economic
interdependence, and growing institutional linkages.”58 Asia’s new
regionalism here can be best seen as a calculated response to the complex of
rapid-fire developments occurring as a result of global, regional, national, and
local interactions simultaneously involving state as well as non-state market
and society actors.59
Second, China itself has shown no interest in recycling or reproducing the
Sinocentric hierarchical world order. On the contrary, China’s acceptance of
state sovereignty and its associated notions in the form of the Five Principles
of Peaceful Coexistence (FPPC)—(1) mutual respect for sovereignty and
territorial integrity, (2) mutual non-aggression, (3) mutual non-interference in
internal affairs, (4) equality and mutual benefit, and (5) peaceful coexistence
—have been reaffirmed repeatedly since their official adoption in 1954. The
FPPC have become globalized, providing the basic norms governing all types
of state-to-state relations, East–West, North–South, South–South, and East–
East. With the rise of Deng Xiaoping as the paramount leader in late 1978
came a drastic reformulation (and relegitimation) of China’s future in terms
of such hitherto proscribed concepts as the open door, international
interdependence, division of labor, and specialization. Even China’s
backwardness and stunted modernization were attributed not to Western
imperialism but to China’s own isolationism going back to the Ming dynasty
and implicitly to its tribute system.
With the official inauguration of a “harmonious world” concept in 2005,
China’s foreign policy seems to have made another great leap outward. While
the phrase “harmonious world” (hexie shijie) first appeared in President Hu
Jintao’s speech at the Asia-Africa Conference in Jakarta, Indonesia, in April
2005, it was Hu’s speech at the UN Summit in September 2005 (in
celebration of the sixtieth anniversary of the United Nations), entitled “Strive
to Establish a Harmonious World of Lasting Peace and Common
Prosperity,”60 that constituted an opening salvo of the Harmonious World
Principle (HWP). The HWP was further elaborated in a first-ever white
paper, China’s Peaceful Development Road, released on December 22, 2005.
The HWP involved a geopolitical triangulation of a nation (China), a region
(Asia), and a world. The logic here is that the harmonious country is the
foundation, the harmonious world is the ultimate goal, and the harmonious
region serves as a connector between the two. The concept of “harmonious
society” (hexie shehui), which became one of the four strategic domestic
goals in 2004, is linked to the concept of a harmonious region and
harmonious world with twin objectives of responding to domestic problems
(e.g., growing income inequalities, widening corruption, and rising
environmental concerns) while at the same time responding to the rise of
China as interpreted in the “China threat theory” (Zhongguo weixie lun)
abroad.61
And third, Asia today confronts a vastly different set of challenges and
threats as well as a vastly greater range of resources and solutions than those
of the Eurocentric balance of power system and the Sinocentric tribute
system. As the world’s largest and most populous continent, covering thirty-
seven states and five sub-regions, Asia’s chief characteristic is its diversity-
cum-disparity in virtually all categories: geographic, demographical, cultural,
religious, political, military, economic, environmental, and technological.
Contrary to Huntington’s thesis of the clash of civilizations, even post–Cold
War East Asia is still better defined by cultural and ideational diversity than
by its putative Confucian cultural heritage. Far from sharing a homogeneous
Confucian culture, East Asia still embodies (albeit in attenuated form) a high
degree of historical and national identity animus.62
Not surprisingly, the responses of Asian states to the rise of China and the
Sinocentric hierarchical and hegemonic system redux span the wide spectrum
of relations with China: from the one extreme of balancing against China to
the other extreme of bandwagoning with China. As Jae Ho Chung argues,
“explicit balancing or containment has been rare and engagement, if not
appeasement, appears to be East Asia’s modus operandi in responding to the
rise of China,” and variations in East Asian states’ responses “are conditioned
largely by three factors: alliances with the United States, territorial disputes
with China and regime characteristics.”63
What is missing in Chung’s list is the geo-economic factor, arguably the
most important and measurable independent variable conditioning the
responses not only of East Asian states but also of the United States, which is
claimed by balance of power Realists as the world’s greatest external
balancer maintaining peace and stability in Asia.
A short list of economic data may suffice to spotlight China’s rise as an
economic superpower. Just over three decades ago, when Deng Xiaoping
announced the policy of reform and opening up in 1978, China’s total trade
value (both imports and exports) was only $20.6 billion—ranking thirty-
second among all trading states and accounting for less than 1 percent of
global trade. Since then, China’s investment- and export-led economy has
grown more than a hundredfold at an annual average growth rate of 10.1
percent. China surpassed Germany as the world’s largest export power in
2009 and surpassed Japan as the world’s second-largest economy in 2010.
Even more remarkably, in 2012 China leapfrogged the United States to
become the world’s biggest trading power (with its total trade value of
US$3.87 trillion compared to the US total $3.82 trillion), bringing an end to
the post–World War II dominance of the United States in global trade. In
2012 alone, China amassed a whopping trade surplus of $231 billion with the
United States, accounting for 32.5 percent of the total US trade deficit. By
mid-2013, China’s foreign exchange reserves reached US$3.56 trillion—the
highest in the world, nearly three times the next largest holder, Japan (US$1.3
trillion), and more than twenty-four times US reserves ($148 billion).
In Asia, China’s rise as the dominant economic superpower is manifest in
the surge of China-led economic regionalism and trade with most Asian
states. China has emerged as the number one or number two trading partner
of virtually every country in East Asia. As of 2011, six of China’s biggest
trade partners are concentrated in Asia (Hong Kong, ASEAN, Japan, South
Korea, India, and Taiwan). In addition, six of the world’s ten largest foreign
exchange reserve holders as of mid-2013 are in Asia (China, Japan, Taiwan,
South Korea, Hong Kong, and India).
China and the United States are now firmly joined at the hip as China is
the largest foreign holder of US public debt (holding over US$1.28 trillion in
US treasury bonds as of mid-2013) even as the United States has become
China’s largest export market. China’s relative immunity to global economic
woes (e.g., the 1997 Asian financial crisis and the 2008 global financial
meltdown) and the evident symbiotic relationship between the Chinese and
US economies are giving rise to much talk of a shift from US dominance to a
new multipolar or US-China bipolar era.
All of this said, however, history still matters, not in the sense of recycling
any historical system, but in coming clean with historical scars and enmities
transmitted by the Japanese imperial system. The 1980s, as the last Cold War
decade, was a turning point in bringing the historical issues back into East
Asian international relations. As the Cold War world structure began to
unravel, issues of national identity reconstruction and reenactment became
increasingly salient. Most East Asian states, freed of the constraints imposed
by the East-West conflict and increasingly wealthy and prosperous in their
own right, no longer felt as dependent as they once had on Japanese support.
At the same time, the arrival of the third wave of democratization in East
Asia in the 1980s created more political space where such sentiments could
be voiced without fear of repression.
The end of the Cold War was to establish a new world order in Asia by
breaking down the extant bipolar hierarchies, but it did so with the revelation
of older and deeper historical and national-identity wounds that have now
become persistent points of contention in Japan’s relations with China and
the two Koreas. In short, both Japan and its neighbors are now faced with the
daunting challenge of shifting their national identities from a Cold War to a
post–Cold War footing.
Predicting the future of Asia’s international relations has always been
hazardous and never more so than today (in 2013), when the international
system itself is undergoing a profound and long-term transformation. Recent
momentous global changes—the end of the Cold War, the collapse of the
Soviet Union, the third wave of democratization—are unprecedented in their
nature, scope, and rapidity. To a significant degree, as Robert Jervis argues,
the flow of world politics has become contingent or “path dependent,” since
certain unexpected events can easily force it along quite different trajectories.
Hence, past generalizations can no longer provide a sure guide for the
future.64
That said, the challenge for the uncertain years ahead is neither one of
making a false choice between balancing and bandwagoning nor one of
seeking an alternative supranational regional or global organization (world
government). The challenge is rather to find a greater synergy among the
many types of state and non-state actors in order to collaborate for more
effective prevention, regulation, and resolution of simmering conflicts while
simultaneously expanding multilateral dialogues and economic integration as
vehicles for the creation of a pluralistic Asian security community.

NOTES
1. I wish to thank David Shambaugh and Michael Yahuda for their valuable comments and
suggestions on an earlier draft of this chapter. For pessimistic Realist analyses along this line with some
variations, see Aaron L. Friedberg, “Ripe for Rivalry: Prospects for Peace in a Multipolar Asia,”
International Security 18, no. 3 (Winter 1993/1994): 5–33; Aaron L. Friedberg, Europe’s Past, Asia’s
Future?, SAIS Policy Forum Series 3 (Washington, DC: Paul H. Nitze School of Advanced
International Studies, 1998), 1–15; Aaron L. Friedberg, “Will Europe’s Past Be Asia’s Future?”
Survival 42, no. 3 (Autumn 2000): 147–59; Aaron L. Friedberg, A Contest for Supremacy: China,
America, and the Struggle for Mastery in Asia (New York: Norton, 2011); and Barry Buzan and Gerald
Segal, “Rethinking East Asian Security,” Survival 36, no. 2 (Summer 1994): 3–21.
2. Samuel P. Huntington, The Clash of Civilizations and the Remaking of World Order (New York:
Simon & Schuster, 1996), 234.
3. Huntington, The Clash of Civilizations, 238.
4. See David C. Kang, “Getting Asia Wrong: The Need for New Analytical Frameworks,”
International Security 27, no. 4 (Spring 2003): 57–85; David C. Kang, “Hierarchy in Asian
International Relations, 1300–1900,” Asian Security 1, no. 1 (January 2005): 53–79; and David C.
Kang, China Rising: Peace, Power, and Order in East Asia (New York: Columbia University Press,
2007), 23–49.
5. Kang, “Hierarchy in Asian International Relations,” 174.
6. The idea of “Asia” is not an indigenous invention but a European one, lending itself to highly
problematic and often sweeping or misleading generalizations. The notion of Asia—or the Orient
(Orientalism)—was constructed by prominent European political philosophers (e.g., Charles de
Montesquieu, Adam Smith, G. W. F. Hegel, and Karl Marx) from the eighteenth century onward as a
way of sharpening and strengthening European identity (Eurocentrism). In such a teleological image of
world history, Europe was depicted as outward looking, dynamic, and progressive in us/them contrast
with inward looking, stagnant, and backward Asia. See Edward W. Said, Orientalism (New York:
Vintage, 1994); Wang Hui, “Reclaiming Asia from the West: Rethinking Global History,” Japan
Focus, February 23, 2005; and Gerald Segal, “‘Asianism’ and Asian Security,” National Interest 42
(Winter 1995): 59.
7. See Segal, “‘Asianism’ and Asian Security,” 60; see also Warren I. Cohen, East Asia at the
Center: Four Thousand Years of Engagement with the World (New York: Columbia University Press,
2000); Mark T. Berger and Douglas A. Borer, eds., The Rise of East Asia: Critical Vision of the Pacific
Century (London: Routledge, 1997); and Giovanni Arrighi, Takeshi Hamashita, and Mark Selden, eds.,
The Resurgence of East Asia: 500, 150 and 50 Year Perspectives (London: Routledge, 2003).
8. For further analysis of the Indic interstate system, see Muthiah Alagappa, “International Politics
in Asia: The Historical Context,” in Asian Security Practice: Material and Ideational Influences, ed.
Muthiah Alagappa (Stanford, CA: Stanford University Press, 1998), 71–75.
9. Christopher Hemmer and Peter J. Katzenstein, “Why Is There No NATO in Asia? Collective
Identity, Regionalism, and the Origins of Multilateralism,” International Organization 56, no. 3
(Summer 2002): 591.
10. On the traditional Chinese world order, see John K. Fairbank, ed., The Chinese World Order:
Traditional China’s Foreign Relations (Cambridge, MA: Harvard University Press, 1968); and Samuel
S. Kim, China, the United Nations, and World Order (Princeton, NJ: Princeton University Press, 1979),
19–48.
11. John K. Fairbank, “A Preliminary Framework,” in The Chinese World Order: Traditional
China’s Foreign Relations, ed. John K. Fairbank (Cambridge, MA: Harvard University Press, 1968), 3.
12. A classic example is the case of Lord Macartney in 1793, who was entered in the Chinese
diplomatic record as having performed the kowtow before the Chinese emperor. In fact, Lord
Macartney refused to perform that ritual. Nor did George III send tributary gifts to the emperor in 1804,
contrary to a Chinese documentary assertion. See Kim, China, the United Nations, and World Order,
19–20.
13. Immanuel C. Y. Hsü, China’s Entrance into the Family of Nations: The Diplomatic Phase, 1858–
1880 (Cambridge, MA: Harvard University Press, 1960), 13. Lucian W. Pye is also known for his
signature mantra: “[Post-Mao] China is a civilization pretending to be a state.” See Lucian W. Pye,
“China: Erratic State, Frustrated Society,” Foreign Affairs 69, no. 4 (Fall 1990): 58; Lucian W. Pye,
The Spirit of Chinese Politics (Cambridge, MA: Harvard University Press, 1992), 235; and Lucian W.
Pye, “International Relations in Asia: Culture, Nation and State,” Sigur Center Asia Papers 1
(Washington, DC: Sigur Center for Asian Studies, 1998), 9.
14. See Michel Oksenberg, “The Issue of Sovereignty in the Asian Historical Context,” in
Problematic Sovereignty: Contest Rules and Political Possibilities, ed. Stephen D. Krasner (New York:
Columbia University Press, 2001), 83–104; and Samuel S. Kim, “Sovereignty in the Chinese Image of
World Order,” in Essays in Honor of Wang Tieya, ed. Ronald St. John Macdonald (London: Martinus
Nijhoff, 1994), 425–45.
15. Curiously and confusingly, the 1818 Collected Statutes of the Qing Dynasty (Da Qing hui-tien)
categorized Tibet, Corea (Korea), Liu Ch’iu (Ryukyu), Cambodia, Siam, Sulu, Holland, Burma,
Portugal, Italy, and England as tributary states, while Russia, Japan, Sweden, and France were listed
merely as states having only commercial relations with China. See Kim, China, the United Nations,
and World Order, 24.
16. See Morris Rossabi, ed., China among Equals (Berkeley: University of California Press, 1983);
and Oksenberg, “The Issue of Sovereignty in the Asian Historical Context,” 89–90.
17. Carter Eckert, Offspring of Empire: The Koch’ang Kims and the Colonial Origins of Korean
Capitalism, 1876–1945 (Seattle: University of Washington Press, 1991), 226–27.
18. Key-Huik Kim, The Last Phase of the East Asian World Order (Berkeley: University of
California Press, 1980), 341. For further analyses of Sino-Korean tributary relations, see Chun Hae-
jong, “Sino-Korean Tributary Relations in the Ch’ing Period,” in The Chinese World Order:
Traditional China’s Foreign Relations, ed. John K. Fairbank (Cambridge, MA: Harvard University
Press, 1968), 90–111.
19. Alagappa, “International Politics in Asia,” 81.
20. Mark Mancall, “The Persistence of Tradition in Chinese Foreign Policy,” Annals of the American
Academy of Political and Social Science 349 (September 1963): 21.
21. “According to this canonical version of modern Chinese history, 1842 is year one. Every high
school student preparing to take the intensely competitive and dreaded college entrance examination is
now required to memorize the official national narrative that divides Chinese history neatly into pre-
Opium [pre-modern] and post-Opium War [modern] periods.” Orville Schell and John Delury, Wealth
and Power: China’s Long March to the Twenty-First Century (New York: Random House, 2013), 14.
22. For the inauguration of the Co-operative Policy and the role played by Burlingame, see Samuel S.
Kim, “Burlingame and the Inauguration of the Co-operative Policy,” Modern Asian Studies 5 (October
1971): 337–54.
23. For a comprehensive treatment of this theme, see Mary C. Wright, The Last Stand of Chinese
Conservatism: The T’ung-Chih Restoration, 1862–1874 (Stanford, CA: Stanford University Press,
1962).
24. Sun Yat-sen characterized China under the unequal treaty system as a “hypocolony,” which is a
grade worse than a semi-colony because of the multiple control and exploitation exercised by the
imperial powers. Sun Yat-sen, San Min Chu I: The Three Principles of the People, trans. Frank W.
Price (Shanghai: Commercial Press, 1932), 39.
25. See Giovanni Arrighi, Takeshi Hamashita, and Mark Selden, “The Rise of East Asia in World
Historical Perspective” (Binghamton: Fernand Braudel Center, State University of New York at
Binghamton, 1997); Alagappa, “International Politics in Asia,” 81–82.
26. Cohen, East Asia at the Center, 261–64.
27. On Tsushima, see Kim, The Last Phase of the East Asian World Order, 17–20.
28. Kim, The Last Phase of the East Asian World Order, 193–94, 200–203.
29. Kim, The Last Phase of the East Asian World Order, 253.
 30. C. I. Eugene Kim and Han-Kyo Kim, Korea and the Politics of Imperialism, 1876–1910
(Berkeley: University of California Press, 1967), 34–38, 46–54.
31. Kim and Kim, Korea and the Politics of Imperialism, 80–81.
32. Alvin So and Stephen W. K. Chiu, East Asia and the World-Economy (Newbury Park, CA: Sage,
1995), 91, 94; S. P. S. Ho, “Colonialism and Development: Korea, Taiwan and Kwantung,” in The
Japanese Colonial Empire, ed. R. Myers and M. Peattie (Princeton, NJ: Princeton University Press,
1984), 340–50.
33. Kim and Kim, Korea and the Politics of Imperialism, 125, 131.
34. Kim and Kim, Korea and the Politics of Imperialism, 141–43.
35. Peter Duus, “Economic Dimensions of Meiji Imperialism: The Case of Korea, 1895–1910,” in
The Japanese Colonial Empire, 1895–1945, ed. R. H. Myers and M. R. Peattie (Princeton, NJ:
Princeton University Press, 1984), 161–62.
36. So and Chiu, East Asia and the World-Economy, 105–8.
37. Masaru Tamamoto, “Japan’s Uncertain Role,” World Policy Journal 8, no. 4 (Fall 1991): 583.
For a more detailed analysis of Fukuzawa’s influence in Meiji Japan, see Sushila Narsimhan, Japanese
Perceptions of China in the Nineteenth Century: Influence of Fukuzawa Yukichi (New Delhi: Phoenix,
1999).
38. Cohen, East Asia at the Center, 358–59.
39. Alagappa, “International Politics in Asia,” 86.
40. See IISS, “Armed Conflicts and Fatalities, 1945–1994,” in The Military Balance 1997/98
(London: International Institute for Strategic Studies, 1997).
41. Cohen, East Asia at the Center, 362.
42. See Marc S. Gallichio, The Cold War Begins in Asia: American East Asian Policy and the Fall of
the Japanese Empire (New York: Columbia University Press, 1988).
43. Barry Buzan, “The Present as a Historic Turning Point,” Journal of Peace Research 30, no. 4
(1995): 386–87.
44. Mark Selden, “China, Japan and the Regional Political Economy of East Asia, 1945–1995,” in
Network Power: Japan and Asia, ed. Peter J. Katzenstein and Takashi Shiraishi (Ithaca, NY: Cornell
University Press, 1997), 306–7.
45. See Robert Jervis, “The Impact of the Korean War on the Cold War,” Journal of Conflict
Resolution 24, no. 4 (December 1980): 563–92.
46. See Samuel S. Kim, The Two Koreas and the Great Powers (New York: Cambridge University
Press, 2006), 2–4.
47. According to one official Chinese estimate, combat casualties were more than 360,000 (including
130,000 wounded), and non-combat casualties were more than 380,000. See Zhang Aiping, Zhongguo
Renmin Jiefangjun [China’s People’s Liberation Army], vol. 1, Contemporary China Series (Beijing:
Dangdai Zhongguo Chubanshe, 1994), 137.
48. See Kent Calder, “U.S. Foreign Policy in Northeast Asia,” in The International Relations of
Northeast Asia, ed. Samuel S. Kim (Lanham, MD: Rowman & Littlefield, 2004), 225–48.
49. Alagappa, “International Politics in Asia,” 93–94.
50. For the rise and fall of tripolarity, see Robert S. Ross, ed., China, the United States, and the Soviet
Union: Tripolarity and Policy Making in the Cold War (Armonk, NY: M. E. Sharpe, 1993); and Lowell
Dittmer, Sino-Soviet Normalization and Its International Implications, 1945–1990 (Seattle: University
of Washington Press, 1992), 147–255.
51. Selden, “China, Japan and the Regional Political Economy of East Asia,” 313.
52. Robert Legvold, “Sino-Soviet Relations: The American Factor,” in China, the United States, and
the Soviet Union: Tripolarity and Policy Making in the Cold War, ed. Robert S. Ross (Armonk, NY: M.
E. Sharpe, 1993), 87.
53. Kang, “Hierarchy in Asian International Relations,” 174.
54. Cohen, East Asia at the Center, 480.
 55. Harold James, A German Identity, 1770–1990 (New York: Routledge, 1989).
56. For a cogent analysis challenging the applicability of power-transition balance of power theory in
today’s Asia, see Steve Chan, Looking for Balance: China, the United States, and Power Balancing in
East Asia (Stanford, CA: Stanford University Press, 2012).
57. See David Shambaugh, ed., Power Shift: China and Asia’s New Dynamics (Berkeley: University
of California Press, 2005); David M. Lampton, The Three Faces of Chinese Power: Might, Money, and
Minds (Berkeley: University of California Press, 2008); and Samuel S. Kim, “China and Globalization:
Confronting Myriad Challenges and Opportunities,” Asian Perspective 33, no. 3 (2009): 41–80.
58. Amitav Acharya, “Will Asia’s Past Be Its Future?,” International Security 28, no. 3 (Winter
2003/2004): 164. See also Amitav Acharya, “How Ideas Spread: Whose Norms Matter? Norm
Localization and Institutional Change in Asian Regionalism,” International Organization 58 (Spring
2004): 239–75; Samuel S. Kim, “Regionalization and Regionalism in East Asia,” Journal of East Asian
Studies 4, no. 1 (January–April 2004): 39–67; and Kent E. Calder and Francis Fukuyama, eds., East
Asian Multilateralism: Prospects for Regional Stability (Baltimore: Johns Hopkins University Press,
2008).
59. Kim, “Regionalization and Regionalism in East Asia,” 43.
60. For the text of the speech, see UN Doc. A/60/PV.5, September 15, 2005, 19–20.
61. Kim, “China and Globalization,” 54–56.
62. Gilbert Rozman, ed., East Asian National Identities: Common Roots and Chinese Exceptionalism
(Washington, DC: Woodrow Wilson Center Press, 2012).
63. Jae Ho Chung, “East Asia Responds to the Rise of China: Patterns and Variations,” Pacific
Affairs 82, no. 4 (Winter 2009/2010): 659.
64. Robert Jervis, “The Future of World Politics: Will It Resemble the Past?,” International Security
16, no. 3 (Winter 1991/92): 39–45.
 Chapter Three
Thinking Theoretically about Asian IR
AMITAV ACHARYA

Any discussion of theoretical perspectives on the international relations (IR)

in Asia confronts the paradox that much of the available literature on the
subject had, until quite recently, remained largely atheoretical. Whether from
within or outside the region, many analysts of Asia were largely unconvinced
that theory was either necessary or useful for studying Asian international
relations.1 Although interest in it is growing in the region, particularly in
China,2 where efforts to develop a “Chinese School” of IR are gathering
steam, theory is still seen as too abstract or too divorced from the day-to-day
concerns of governments and peoples to merit serious and sustained pursuit.
Moreover, theory is criticized by many in Asia as too “Western.” Thus,
even among those writers on Asian IR who are theoretically oriented,
disagreement persists as to whether IR theory is relevant to studying Asia
given its origin in, and close association with, Western historical traditions,
intellectual discourses, and foreign policy practices. International relations
theory, like the discipline itself, remains, an “American social science,” to
quote Stanley Hoffman.3
The recent advances made by the “English School” and continental
European Constructivism have not made IR theory “universal”; indeed, they
have further entrenched and broadened the Western theoretical dominance.
The question of how relevant IR theory is to the study of Asian security has
evoked strikingly different responses. On the one hand, David Kang has
seized upon the non-realization of Realist warnings of post-war Asia being
“ripe for rivalry” to critique not just Realism, but Western IR theory in
general, for “getting Asia wrong.”4 In analyzing Asian regionalism, Peter
Katzenstein comments, “Theories based on Western, and especially West
European experience, have been of little use in making sense of Asian
regionalism.”5 Although Katzenstein’s remarks specifically concern the study
of Asian regionalism, they can be applied to Asian IR in general. And it is a
view widely shared among Asian scholars. On the other side, John Ikenberry
and Michael Mastanduno defend the relevance of Western theoretical
frameworks in studying the international relations of Asia. David
Shambaugh’s introduction to this volume also illustrates the partial
applicability of various IR theories—but the impossibility of any single one
—to explain international relations in the region. While intra-Asian
relationships might have had some distinctive features historically, this
distinctiveness had been diluted by the progressive integration of the region
into the modern international system. The international relations of Asia have
acquired the behavioral norms and attributes associated with the modern
interstate system that originated in Europe and still retains many of the
features of the Westphalian model. Hence, the core concepts of international
relations theory such as hegemony, the distribution of power, international
regimes, and political identity are as relevant in the Asian context as
anywhere else.6
To this observer, this debate is a healthy caveat, rather than a debilitating
constraint, on analyzing Asian international relations with the help of an
admittedly Western theoretical literature. To be sure, theoretical paradigms
developed from the Western experience do not adequately capture the full
range of ideas and relationships that drive international relations in Asia. But
IR theories and approaches—Realism, Liberalism, Constructivism, and
analytic eclecticism—are relevant and useful in analyzing Asian IR, provided
they do not encourage a selection bias in favor of those phenomena (ideas,
events, trends, and relationships) that fit with them and against those that do
not. IR scholars should feel free to identify and study phenomena that are
either ignored or given scarce attention by these perspectives. They should
also develop concepts and insights from the Asian context and experience not
just to study Asian developments and dynamics, but also other parts of the
world. In other words, Western IR theory, despite its ethnocentrism, is not to
be dismissed or expunged from Asian classrooms or seminars, but
universalized with the infusion of Asian histories, personalities, philosophies,
trajectories, and practices.
To do so, one must look beyond the contributions of those who write in an
overtly theoretical fashion, explicitly employing theoretical jargon and
making references to the theoretical literature of IR. A good deal of empirical
or policy-relevant work may be regarded as theoretical for analytical
purposes because it, like the speeches and writings of policy makers, reflects
mental or social constructs that side with different paradigms of international
relations.7 To ignore these in any discussion of theory would be to miss out
on a large and important dimension of the debate on, and analysis of, Asian
IR. In the sections that follow, I examine three major perspectives on Asian
international relations: Realism, Liberalism, and Constructivism, along with
some reflections on the merits of “analytical eclecticism”8 (see table 3.1).
None of these theories are coherent, singular entities. Each contains a
range of perspectives and variations, some of which overlap with those of the
others, although this complexity is seldom acknowledged in academic
debates. Using even these broad categories is not that simple because most
writings on Asian IR are generated by area specialists, who are unlikely to
pigeonhole themselves into Realist, Liberal, and Constructivist slots. So
theorizing Asian IR necessarily involves generalizing from a thin conceptual
base and making arbitrary judgments about who and what belongs where.

Table 3.1. Three Perspectives on International Relations

 Although theories of IR are built around a set of assumptions and
arguments that are broad in scope and supposed to apply to every region, in
reality, theoretical debates about the international relations of regions often
develop around issues and arguments peculiar to the region. Asia is no
exception. Hence in discussing the three theoretical perspectives in the
context of Asia, I identify and discuss those arguments and metaphors that
have dominated both academic and policy debates (see table 3.2).
This chapter looks primarily at international relations and regional order,
rather than the foreign policy of Asian states. It is not intended as a survey of
the literature on Asian international relations. Furthermore, I am interested in
exploring the relationship between theoretical constructs and empirical
developments in Asian international relations. Theory does not exist in a
vacuum. Both at the global level and in the region, theoretical work responds
to major events and changes occurring within and outside (at the global level)
the region. In the last section of this chapter I make some general
observations about the prospects for developing an Asian universalism in
international relations theory as a counter to both Western dominance and
Asian exceptionalism. A final aspect of this chapter is that it is oriented more
toward security studies than international political economy. This to some
extent reflects the state of the study of Asian international relations, in which
the work on security studies exceeds that on international political economy
(IPE).

REALISM

Realists take the international system to be in anarchy (no authority above the
state), in which states, as the main actors in international relations, are guided
mainly by considerations of power and the national interest. International
relations is seen as a zero-sum game in which states are more concerned with
their relative gains rather than absolute gains (how much one gains vis-à-vis
another is more important than the fact that everybody may gain something).
The relentless competition for power and influence makes conflict inevitable
and cooperation rare and superficial; international institutions operate on the
margins of great power whims and caprice. International order, never
permanent, is maintained by manipulating the balance of power, with power
defined primarily in economic and military terms. A later version of Realism,
developed by Kenneth Waltz and called “neo-Realism,” stresses the
importance of the structural properties of the international system, especially
the distribution of power, in shaping conflict and order, thereby downplaying
the impact of human nature (emphasized by classical Realists) or domestic
politics in international relations. More recently, intra-Realist debates have
revealed differences between “offensive Realists” and “defensive Realists.”
Offensive Realists such as Mearsheimer argue that states are power
maximizers: going for “all they can get” with “hegemony as their ultimate
goal.” Defensive Realists, such as Robert Jervis or Jack Snyder, maintain that
states are generally satisfied with the status quo if their own security is not
challenged, and thus they concentrate on maintaining the balance of power.

Table 3.2. Theoretical Perspectives on Asia’s International Relations

Whether academic or policy oriented, Realists view the balance of power

as the key force shaping Asia’s post-war international relations, with the
United States as chief regional balancer.9 A major proponent of this view is
Lee Kuan Yew, Singapore’s senior statesman. Lee ascribes not only Asian
stability, but also its robust economic growth during the “miracle years,” to
the US military presence in the region.10 In his view, the US presence and
intervention in Indochina secured the region against Chinese and Soviet
expansion and gave the Asian states time to develop their economies.11 In the
wake of the communist takeover of South Vietnam in 1975, Seni Pramoj, the
leader of Thailand’s Democrat Party, described the US role as the regional
balancer in somewhat different terms: “We have cock fights in Thailand, but
sometimes we put a sheet of glass between the fighting cocks. They can peck
at each other without hurting each other. In the cold war between Moscow
and Peking, the glass between the antagonists can be Washington.”12
Until the end of the Cold War, Realist arguments about Asian IR were
closer to classical Realism than the neo-Realism developed by Kenneth
Waltz, which stresses the causal impact of the distribution of power. This has
changed with the end of the Cold War, which spelled the end of bipolarity.
Thus, a new Realist argument about Asian international relations is the view
that the end of bipolarity spells disorder and even doom for the region. For
neo-Realists, bipolarity is a more stable international system than
multipolarity, both in terms of the durability of the system itself and the
balance between conflict and order that prevails within the system.13
The end of the Cold War would witness the “decompression” of conflicts
held in check under bipolar management.14 Hence, Realism paints a dark
picture of Asia’s post–Cold War order. In policy debates, the favorite Realist
cliché in the initial post–Cold War years was the “power vacuum” created by
superpower retrenchment, as could be foreseen from the withdrawal of Soviet
naval facilities in Cam Ranh Bay, Vietnam, and the dismantling of the US
naval and air bases in the Philippines.
Questions about a vacuum of power inevitably beg the question of who is
to fill it. Initially, Realist prognosis favored a multipolar contest featuring a
rising China, a remilitarized (thanks partly to US retrenchment) Japan, and
India (whose potential as an emerging power was yet to be recognized). But
with the persistence of China’s double-digit economic growth matched by
double-digit annual increases in its defense spending, it was the rise of China
that became the focal point of Realist anxieties (delight?) about Asian
insecurity.
From a “power transition theory” perspective, Realists foresaw an
inevitable confrontation between the status quo power (the United States) and
its rising power challenger (China). But paving the way for such a
confrontation was the logic of offensive Realism, which sees an inevitable
tendency in rising powers toward regional expansionism. John Mearsheimer
likened the rise of China to that of the United States in the nineteenth century,
where the aspiring hegemon went on a spree of acquiring adjacent territories
and imposed a sphere of influence (Monroe Doctrine) in the wider
neighborhood.15 Expansionism occurs not because rising powers are
hardwired into an expansionist mode, but because anarchy induces a concern
for survival even among the most powerful actors. In other words, great
powers suffer from survival anxieties no less than weak states, and it is this
concern for survival that drives them toward regional hegemony. The result is
the paradoxical logic of “expand to survive.”
Since a balance of power is likely to be either unstable (if multipolarity
emerges) or absent (if Chinese hegemony materializes), is there a role for
multilateral institutions as alternative sources of stability? During the Cold
War, Realists paid little attention to Asian regional institutions or dialogues,
of which there were but a few: an Association of Southeast Asian Nations
(ASEAN) preoccupied with the Cambodia conflict, a severely anemic South
Asia Association for Regional Cooperation (SAARC), and some loose
economic frameworks such as the Pacific Economic Cooperation Council
(PECC). But with the end of the Cold War accompanied by a refocusing of
ASEAN toward wider regional security issues and the emergence of new
regional institutions such as the Asia-Pacific Economic Cooperation (APEC,
1989) and the ASEAN Regional Forum (ARF, 1994), Realism came under
challenge from “institutionalist” perspectives, that is, those who argued that
regional norms and institutions, rather than just the balance of power system,
have helped to keep the peace in Cold War Asia and would play a more
important role in the region’s post–Cold War order. Realists responded to this
challenge by targeting Asian regional institutions. Their main preoccupation
is no longer just to highlight the crucial need for a stable balance of power
system, but also to expose the limitations of regional institutions.
Realists dismiss the capacity of regional institutions in Asia to act as a
force for peace. For them, regional order rests on bilateralism (especially the
US hub-and-spoke system), rather than multilateralism. During the Cold War,
Realist scholar Michael Leifer famously described Asian regional security
institutions as “adjuncts” to the balance of power.16 While institutions may be
effective where great powers drive them (e.g., NATO), Asian institutions are
fatally flawed because they are created and maintained by weak powers. One
concession made to Asian institutions by their Realist critics is to accord
them a role in smoothing the rough edges of balance of power geopolitics, an
argument consistent with the English School perspective. Since weak powers
are structurally incapable of maintaining order and achieving security and
prosperity on their own terms and within their own means (there can be no
such thing as a “regional solution to regional problems”), the best way to
manage the security dilemma is to keep all the relevant great powers involved
in the regional arena so that they can balance each other’s influence.
Such involvement cannot be automatic, however; it has to be contrived,
and this is where regional institutions play their useful role as arenas for
strategic engagement. Instead of great powers creating institutions and setting
their agenda, as would be normal in a Realist world, weak powers may
sometimes create and employ institutions with a view to engaging those
powers that are crucial to an equilibrium of power.17
But this limited role of regional institutions notwithstanding, Realists
generally find Asia’s international relations to be fraught with uncertainty and
danger of conflict due to the absence of conditions in Asia that ensure a
multi-polar peace in Europe. In a famous essay, Aaron Friedberg argued that
the factors that might mitigate anarchy in Europe resulting from the
disappearance of bipolar stability are noticeably absent in Asia, thereby
rendering the region “ripe for rivalry.”18 These mitigating factors include not
only strong regional institutions like the EU, but also economic
interdependence and shared democratic political systems. Some Realists, like
Friedberg, have found Asian economic interdependence to be thin relative to
what exists in Europe and the interdependence between Asia and the West.
Others—like Barry Buzan, the late Gerald Segal, and Robert Gilpin—argue
that economic interdependence cannot keep peace and may even cause more
strife than order.19 Ironically, Realists see economic interdependence within
Asia to be either scarce or destabilizing, or both at the same time.
In terms of its contributions, Realism can take credit for an analytical and
policy consistency in highlighting the role of the balance of power in regional
order. This view has been maintained both during the heydays of US
hegemony in the 1950s and 1960s, through the course of its relative decline
in the post-Vietnam years, and in the post–Cold War “unipolar moment.” In
China, Realism was the one Western theory of IR that broke the monopoly of
Marxist-Leninist and Maoist thought. This would later pave the way for other
perspectives on international relations, including Liberalism and
Constructivism. Realism also gave a certain underlying conceptual coherence
to a great deal of atheoretical or policy writings on Asian international
relations.
During the Cold War, Realism was arguably the dominant perspective on
the international relations of Asia. This was true not just of the academic
realm, but also in the policy world. Although it is difficult to find evidence
for the cliché that Asians are instinctively wedded to a Realist worldview and
approach, Asian policy makers (with the exception of some of those who
fought against colonial rule, India’s Jawaharlal Nehru in particular), tended to
be Realist (even Nehru claimed not to have been a “starry-eyed idealist”).20
Even in communist China, Hans Morgenthau’s Politics Among Nations
enjoyed a huge popularity in classrooms, matching or exceeding the appeal of
Marx or Mao. The same was true of Nehruvian India, where the indigenous
idealism Gandhi and Nehru inspired scarcely formed part of IR teaching and
learning.
But, more recently, Realist perspectives on Asian IR have come under
attack. The predictions of Realists about Asia’s post–Cold War insecurity
have yet to materialize.21 Moreover, Realism’s causal emphasis on US
military presence as the chief factor behind Asia’s stability and prosperity
ignores the role of other forces, including Asian regional norms and
institutions, economic growth, and domestic politics. In a similar vein,
Realism’s argument that the Cold War bipolarity generated regional stability
can be questioned. China’s preeminent Realist scholar of international
relations, Yan Xuetong of Tsinghua University, argues that while Cold War
bipolarity might have prevented war between the superpowers, it permitted
numerous regional conflicts causing massive death and destruction:
The history of East Asia does not support the argument that the balanced strengths between China
and the United States can prevent limited conventional wars in East Asia. During the Cold War,
the balance of power between the United States and the Soviet Union did prevent them from
attacking each other directly in this region, but it failed to prevent wars between their allies or
wars between one of them and the allies of the other, such as the Korean War in the 1950s.
Hence, even if a balance of power existed between China and the United States after the Cold
War, we would still not be sure it had the function of preventing limited conventional wars in this
region.22

The Realist explanation of Asia’s Cold War stability, while having the
virtue of consistency, actually contradicts a key element of its foundational
logic, which sees power balancing as a universal and unexceptionable law of
international politics (even if Realists disagree whether it is an automatic law
of nature or has to be contrived). The notion of balance of power in Asia as
understood from a Realist perspective is actually a fig leaf for US primacy, or
even preponderance. Hence, what should be anathema for a classical Realist23
—the discernible absence of balancing against a hegemonic power—has
acquired the status of an almost normative argument about Asian regional
order in Realist writings on Asia. This contradiction cannot be explained by
simply viewing the United States as a benign power which can escape the
logic of balancing. If Realism is true to one of its foundational logics, then
any power (benign or otherwise) seeking hegemony should have invited a
countervailing coalition. The fact that the United States has not triggered such
a coalition is a puzzle that has not been adequately explained. Adding a
qualifier to their causal logic (benign powers are less likely to be balanced
against than malign ones) only lends itself to the charge, raised powerfully by
John Vasquez, of Realism as a “degenerative” theoretical paradigm.24
Nonetheless, Realists would see the recent case of Chinese “assertiveness”
in the South China Sea and East China Sea as vindication of their arguments
about the coming instability in Asia. The scenario of a Chinese Monroe
Doctrine over Asia as imagined by the offensive Realists may appear closer
to realization with China’s growing military prowess, its 2009 publication of
a new map claiming much of the South China Sea, its foot-dragging in
concluding a binding code of conduct for the South China Sea with ASEAN,
and its coercive tactics against Vietnam and the Philippines (which are parties
to the South China Sea territorial disputes). And Realists would see the
advent of the US “pivot” (also known as “rebalancing”) strategy as proof that
power balancing, rather than institutional engagement, would be the
predominant force shaping the international order of Asia. This argument is
bolstered by the view held by many in China that the US pivot is a form of
“containment” of China. Whether these Realist claims are exaggerated or not,
or whether Chinese assertiveness is really anything new,25 they certainly
merit careful examination and need to be judged against the mitigating forces
that Liberal and Constructivist perspectives claim to find in Asia today.

LIBERALISM

Traditional Liberalism rests on three pillars:

1. Commercial Liberalism, or the view that economic interdependence,
especially free trade, reduces the prospect of war by increasing its costs
to the parties.
2. Republican Liberalism, or the “democratic peace” argument, which
assumes that Liberal democracies are more peaceful than autocracies,
or at least seldom fight one another.
3. Liberal institutionalism, which focuses on the contribution of
international organizations in fostering collective security, managing
conflict, and promoting cooperation.
 A modern variant of Liberal institutionalism is neo-Liberal
institutionalism. Unlike classical Liberalism, which took a benign view of
human nature, neo-Liberal institutionalism accepts the Realist premise that
the international system is anarchic and that states are the primary, if not the
only, actors in international relations. But it disagrees with neo-Realism’s
dismissal of international institutions. Neo-Liberals maintain that
international institutions, broadly defined—including regimes and formal
organizations—can regulate state behavior and promote cooperation by
reducing transaction costs, facilitating information sharing, preventing
cheating, and providing avenues for peaceful resolution of conflicts.
While Realism as a theory of international relations is preoccupied with
issues of security and order, Liberalism is more concerned with the nature
and dynamics of the international political economy. Liberal perspectives on
Asia’s international relations are no exception. For Liberals, the foundations
of the post-war international relations of Asia were laid not by the region’s
distinctive geography or culture, or by security threats facing the region, but
rather by the post–World War II international economic system under
American hegemony. The United States was central to the creation of
international institutions such as the International Monetary Fund (IMF), the
World Bank, and the General Agreement on Tariffs and Trade (GATT),
which played a crucial role in diffusing the norms of economic Liberalism. In
Asia, the United States served as a benign hegemon providing the collective
goods of security against communist expansion and free access to its vast
market by Asia’s early industrializers, even at a cost to itself (in terms of
incurring huge deficits). The outcome was rapid economic growth in a
number of Asian economies, which created “performance legitimacy” for the
region’s autocratic rulers, thereby stabilizing their domestic politics. At the
same time, the region witnessed a growing interdependence resulting from
the pursuit of market-driven and market-friendly economic growth strategies,
which furthered the prospects for regional stability and security.
Liberal conceptions of the international relations of Asia have particularly
stressed the role of expanding interdependence as a force for peace.26 The
interdependence argument was advanced with ever more vigor with the end
of the Cold War and the rise of Chinese economic power. Liberals, both
Western and Asian (including many of them within China itself), came to
view it as a crucial factor in making China’s rise peaceful. Yet the argument
also invited much criticism, especially, as noted earlier, from Realists, who
often take the failure of European economic interdependence to prevent the
First World War as a severe indictment of the “if goods do not cross borders,
soldiers will” logic. Defending against such charges, Liberals stress
differences between nineteenth-century and contemporary patterns of
economic interdependence. The former was based on trade and exchange,
while the latter is rooted in trans-national production, which is more “costly
to break” and which has a deeper and more durable impact on national
political and security autonomy.
The argument about economic interdependence in Asia as a force for
peace is tested by the recent escalation of the Sino-Japanese rivalry over
issues such as the Senkaku/Diaoyu Islands in the East China Sea and visits to
Yasukuni Shrine by Japanese leaders, despite nearly $350 billion worth of
bilateral trade (in 2012) between the two countries.27 On the other hand, there
is a clearer sense that economic interdependence in the more important dyad,
US-China, would be far costlier for either side to break. That interdependence
is underpinned not only by over half a trillion US dollars in bilateral trade
(rising from US$5 billion in 1981 to US$536 billion in 2012), but also by
China holding some US$1.3 trillion worth of US debt (in bonds and notes,
July 2013 figures), amounting to a third of China’s 3.5 trillion worth of
foreign reserves.28
The second strand of Liberalism—democratic peace theory—has found
very little expression in writings on Asian IR. This need not be surprising
since historically Asia has had few democracies to test the claims of this
theory meaningfully. Moreover, Asia’s democracies tend to be of the
“illiberal variety,” making it more plausible for us to speak of an “illiberal
peace” in the region (especially in Southeast Asia), whereby a group of
authoritarian and semi-authoritarian states avoid conflict by focusing on
economic growth, performance legitimacy, and sovereignty-preserving
regional institutions. Critics of democratic peace in the West, such as Jack
Snyder and Ed Mans-field, have also questioned the normative claims of
democratic peace by highlighting the danger of war associated with
democratic transitions. In Asia, the Liberal/democratic peace argument has
found more critics than adherents, but in general it has not been an important
part of the debate over the region’s international relations.
The neglect is as unfortunate as the criticism of democratic peace is
misplaced. Contrary to a popular perception, democratic transitions in Asia
have never led to interstate war and only occasionally to serious domestic
instability. The case of Indonesia post-Suharto might be an exception to the
latter, but didn’t more people die in the transition to authoritarian rule in that
country in the 1960s than from it? In South Korea, Taiwan, Cambodia, the
Philippines, and Thailand, democratic transitions have not caused serious
internal strife or interstate conflict. On the contrary, it might be argued that
such transitions have often yielded a “cooperative peace dividend,” whereby
the new democratic governments have pursued cooperative strategies toward
their traditional rivals. Examples include Thailand’s “battlefields to
marketplaces” policy in the late 1980s that helped to break the stalemate in
the Cambodia conflict, Kim Dae Jung’s Sunshine Policy, and Indonesia’s
ASEAN Security Community initiative. Pakistan’s democratic breakdown
under Musharraf might have led to improved prospects for peace with India,
but this was induced by a strong external element, the 9/11 attacks and the
US-led war on terror. Democratization fueled demands for Taiwanese
independence, thereby challenging East Asian stability, but democratization
has also created populist countervailing pressures on Taiwan’s pro-
independence governments from going over the brink in inviting a Chinese
military response. At the very least, there is not much evidence from Asia to
support the critics’ view that democratic transitions intensify the danger of
war, or even domestic strife.
The impact of the third element of the Liberal paradigm, Liberal
institutionalism, on Asian IR discourses is both easier and harder to establish.
On the one hand, the growth of regional institutions in Asia allows greater
space to Liberal conceptions of order-building through institutions. But the
Liberal understanding of how institutions come about and preserve order
overlaps considerably with social Constructivist approaches. Indeed,
institutionalism (the study of the role of international institutions) is no longer
a purely Liberal preserve; in Asia at least, it has been appropriated by
Constructivists who have both deepened and broadened the understandings of
what institutions are and how they impact on Asia’s international relations.
Classical Liberal institutionalism was identified with both collective
security and, to a lesser extent, regional integration theory, which was closely
derived from early West European integration during the 1950s and 1960s.
But neither type of Liberal institutionalism has had a regional application in
Asia, where there has been no collective security (even if one stretches the
term to include collective defense) or supranational institutions. The newest
Liberal institutionalism, neo-Liberal institutionalism, narrowed the scope of
investigation into institutional dynamics (how institutions affect state
behavior) considerably. It shared the Realist conception of anarchy while
disagreeing with Realism on the importance of institutions as agents of
cooperation and change. But it gave an overly utilitarian slant to the
performance of institutions. Institutions may (but not always or necessarily)
induce cooperation because they can increase information flows, reduce
transaction costs, and prevent cheating. But institutions are not really
transformative; their end product may be an international regime rather than a
security community where the prospect of war is unthinkable. In Asia, APEC
has been the one regime/institution that neo-Liberals have been most attracted
to. But even there, and certainly in the case of the more ASEAN-centric
institutions (e.g., ASEAN, the ASEAN Regional Forum, ASEAN 3, and the
East Asia Summit), Constructivism (with its stress on the culture- and
identity-derived notion of the “ASEAN Way”) has been a more popular mode
of analysis than neo-Liberalism or classical Liberalism (collective security
and regional integration).
In general, then, Liberal perspectives have made little impact on the study
of Asia’s international relations. This need not have been, or remain, the case.
Liberalism is more notable as a causal theory of peace, just as Realism
focuses on the causes of war. In a traditionally Realist-dominated field of
Asian international relations, and with the region’s domestic politics
landscape marked by a durable (if changing) authoritarian pattern, Liberal
conceptions of peace and democracy have found few adherents. But as noted
above, the criticisms of Liberal notions of interdependence and democracy on
the one hand and peace and stability on the other are often rooted in
misplaced historical analogies and selective empirical evidence. Liberalism
has a brighter future in the analysis of Asia’s international relations as the
region’s historical (post–World War II) combination of economic
nationalism, security bilateralism, and political authoritarianism unravels and
gives way to a more complex picture where economic Liberalism, security
multilateralism, and democratic politics acquire force as determinants of
regional order and form the basis of an “Asian universalism” in IR theory.
The Liberal perspective on Asian security has taken a new turn with
growing attention to the role of “rising powers” and the renewed debate over
“American decline” in the wake of the 2008 financial crisis that centrally
featured the United States. John Ikenberry has argued that despite the US
decline, the “American-led Liberal hegemonic order” would persist. This
argument has special resonance for Asia, because it is this reason that is the
locus of the global power shift. Ikenberry suggests that the rising powers, like
China and India, that are potential challengers to US hegemony, have
benefited so much from the Liberal order, including the free trade regime and
international institutions, that they would refrain from revisionism and would
be co-opted into that order.29 Yet this optimism is questionable. Rising
powers such as China and India were not really “present at the creation” of
the Liberal order; indeed until their economic reforms (China’s since 1979
and India’s since the early 1990s), they pretty much stayed out of or even
opposed it. Second, both India and China are uncomfortable with some of the
new norms of Liberal internationalism that challenge state sovereignty,
especially humanitarian intervention and the responsibility to protect. Third,
both countries, along with other emerging powers such as Brazil, desire a
reform of the existing institutions created and maintained by the Liberal
hegemonic order with a view to acquiring a greater voice in their decision
making. Until these reforms are carried out, resistance, rather than co-option,
may be a more likely element of their attitude toward existing global
institutions.

CONSTRUCTIVISM

For Constructivists, international relations is shaped not just by material

forces such as power and wealth, but also by subjective and intersubjective
factors—including ideas, norms, history, culture, and identity.
Constructivism takes a sociological, rather than “strategic interaction,” view
of international relations. The interests and identities of states are not pre-
ordained or given, but emerge and change through a process of mutual
interactions and socialization. Conditions such as anarchy and power politics
are not permanent or “organic” features of international relations, but are
socially constructed. State interests and identities are in important part
constituted by these social structures rather than given exogenously to the
system by human nature or domestic politics. Norms, once established, have
a life of their own; they create and redefine state interests and approaches.
For Constructivists, international institutions exert a deep impact on the
behavior of states; they not only regulate state behavior but also constitute
state identities. Through interaction and socialization, states may develop a
“collective identity” that would enable them to overcome power politics and
the security dilemma.
Constructivism is struggling to acquire the status of a “theory” of
international relations comparable to Realism or Liberalism. Some critics
view it as a social theory that has no basis in IR. Constructivists are also
accused of lacking middle-range theory and not pursuing serious empirical
research (although this criticism would be increasingly hard to sustain as
more empirical studies emerge employing a Constructivist framework); some
Constructivists themselves acknowledge that, like rational choice theory, it is
more of a method than a theory per se.30
But Constructivism has helped to answer a number of key puzzles about
Asian security order. While Constructivism is essentially a post–Cold War
theory, it has been employed to explain key puzzles of Asian international
relations during the Cold War period. Constructivists stress the role of
collective identities in the foundation of Asia’s post-war international
relations. In an important contribution, Chris Hemmer and Peter Katzenstein
explain the puzzle of “why there is no NATO in Asia” by examining the
differing perceptions of collective identity held by US policy makers in
relation to Europe and Asia.31 American policy makers in the early post-war
period “saw their potential Asian allies . . . as part of an alien and, in
important ways, inferior community.”32 This was in marked contrast to their
perception of “their potential European allies [who were seen] as relatively
equal members of a shared community.” Because the United States
recognized a greater sense of a transatlantic community than a transpacific
one, Europe rather than Asia was seen as a more desirable arena for
multilateral engagement—hence there was no Asian NATO. While this
explanation stresses the collective identity of an external actor, another
Constructivist perspective highlights the normative concerns of Asian actors
themselves, especially Asia’s nationalist leaders, who delegitimized
collective defense by viewing it as a form of great power intervention
through their interactions in the early post-war period, culminating in the
Asia-Africa Conference in Bandung in 1955.33
Constructivism also explains why a different form of regionalism was
possible in Asia, one that was more reflective of the normative and cultural
beliefs of the Asian states and their collective identities as newly independent
states seeking national and regional autonomy. This explains the origins and
evolution of ASEAN, Asia’s first viable regional grouping. ASEAN’s
establishment in 1967, Constructivists argue, cannot be explained from a
Realist perspective, in the absence of a common external threat perception, or
from a Liberal one, which would assume substantial interdependence among
its members. Neither of these conditions marked the relationship among
ASEAN’s founding members at its birth. Instead, regionalism in Southeast
Asia was a product of ideational forces, such as shared norms, and
socialization in search of a common identity. Shared norms—including non-
intervention, equality of states, and avoidance of membership in great power
military pacts—were influential in shaping a deliberately weak and relatively
non-institutionalized form of regionalism that came to be known as the
“ASEAN Way.”
Regional institutions have thus been at the core of Constructivist
understanding of Asia’s post-war international relations. It is through Asian
institutions that Constructivists have attempted to project and test their
notions about the role of ideas (for example, common and cooperative
security); identity (“Asian Way,” “ASEAN Way,” “Asia-Pacific Way”); and
socialization.34 The influence of Constructivism is especially visible in
attempts to differentiate between European and Asian regionalism—stressing
the formal, legalistic, and bureaucratic nature of the former and the informal,
consensual, and process-centric conception of the latter. That the European-
derived criteria should not be used to judge the performance and
effectiveness of Asian institutions has been a key element in Constructivist
arguments about Asian regionalism.35
Apart from conceptualizing the distinctive nature and performance of
Asian regional institutions, which are either dismissed (by Realists) or
inadequately captured (by neo-Liberal or rationalist institutionalism),
Constructivists have also stepped into the debate over Asia’s emerging and
future security order by frontally challenging the “ripe for rivalry” scenario
proposed famously and controversially by Aaron Friedberg.36 David Kang,
noting that Realist scenarios such as Friedberg’s have failed to materialize,
calls for examining Asian security from the perspective of Asia’s own history
and culture. He raises the notion of a hierarchical regional system in Asia at
the time of China’s imperial dominance and the tributary system. Asia was
peaceful when China was powerful; now, with the (re-)emergence of China
as a regional and global power, Asia could acquire stability through
bandwagoning with China (which in his view is occurring).37 While for
Mearsheimer, Europe’s “back to the future” means heightened disorder of the
type that accompanied the rise of Germany in the late nineteenth century, for
Kang, Asia’s “back to the future” implies a return to hierarchy and stability
under Chinese preeminence.
Kang’s thesis presents one of the most powerful Constructivist challenges
to the Realist orthodoxy in Asian IR. But his argument has been
controversial, even among Constructivists,38 who have questioned its claim
about the peaceful nature of the old tributary system, whether China’s
neighbors are actually bandwagoning with China, and the structural
differences between Asian regional systems during the tributary system—
especially the absence of other contenders for hegemony that can now be
found in the United States, Russia, Japan, and India, and the continuing
importance of sovereignty to both China and its neighbors that militates
against hierarchy (see Samuel Kim’s chapter in this volume).
Constructivism has acquired a substantial following among not only
Western but also Asian scholars of Asian IR.39 A key factor behind this is the
growing interest in the study of Asian regionalism with the proliferation of
regional institutions and dialogues in Asia in the post–Cold War period. In
China, aside from regional institutions, local discourses about China’s
“peaceful rise” play an important role behind the emergence of
Constructivism as the most popular IR theory among younger-generation
academics. Constructivism has given an alternative theoretical platform to
Chinese scholars wary of Realist (power transition) perspectives from the
West (as well as other parts of Asia), which see the rise of China as a major
threat to international stability.
Constructivism has advanced the understanding of Asia’s international
relations in important ways. Their focus on the role of ideational forces—
such as culture, norms, and identity—enriches our understanding of the
sources and determinants of Asian regional order compared to a purely
materialistic perspective. Second, Constructivists have challenged the
uncritical acceptance of the balance of power system posited by Realist and
neo-Realist scholars as the basis of Asian regional order by giving greater
play to the possibility of change and transformation driven by socialization.
Third, Constructivist writings have introduced greater theoretical diversity
and opened space for debate in the field and have helped to link the insights
of the traditional area studies approach to Southeast Asia to the larger domain
of international relations theory.40
Moreover, perhaps more so than Realism and Liberalism, Constructivist
writings drawing upon the Asian experience have challenged and enriched
the wider theoretical literature on Constructivism. Kang’s invocation of
hierarchy as a defining feature of Asia’s once and future interstate relations
may be debatable (especially insofar as the future is concerned), but there is
little question that it poses a frontal challenge to Realism and Liberalism by
pointing to alternatives to the Westphalian model. Another example can be
found in the literature on norms, a central part of Constructivist theory. The
first-wave literature on norm diffusion was essentially about “moral
cosmopolitanism” of Western transnational advocates, which transformed
“bad” local ideas and practices in the non-Western world. These writings paid
little attention to the agency of norm-takers, mainly non-Western actors, who
were relegated to being the “passive recipients” of global norms. But the
experience of the diffusion of ideas and norms from an Asian backdrop
(classical and modern) suggests that local actors do not simply act as passive
recipients but as active players in norm diffusion, and they not only contest,
modify, and localize global norms, but also universalize locally constructed
norms. These insights have had a major impact on Constructivist theory and
have been applied to explain norm diffusion globally and in other regions of
the world.41
But the growing visibility of Constructivism in Asian IR has invited
criticism of the “new Constructivist orthodoxy.” Despite having begun as a
dissenting view, side by side with other critical perspectives on international
relations, Constructivism is now bracketed as a “mainstream” perspective.
This is ironic, because Constructivism is also dismissed by some as a fad, a
passing fancy of a handful of intellectuals, which will fade into obscurity as
the optimism generated by the end of the Cold War dissipates. Equally
unconvincing are accusations leveled against Constructivism for uncritically
emulating their rationalist foes, of normative determinism (too much
emphasis on norms at the expense of material forces), and unreformed state-
centrism (ignoring the role of civil society actors). While critics see the
degree of Constructivist optimism about Asia’s future to be as misconceived
as Realist pessimism, in reality, Constructivist optimism has been more
guarded than what the critics portray. More serious are the criticisms of
Constructivism’s tendency to ignore domestic politics (how domestic
interactions change identity and interests) and its self-serving moral
cosmopolitanism (bias toward “universal” ideas and global norm
entrepreneurs at the expense of preexisting local beliefs and local agents).
Constructivist perspectives on Asian international relations have been
criticized on the ground that Asian regional institutions have yet to, and are
unlikely ever to, become more than “talk shops.” These criticisms are not
new but have acquired greater force in recent years over signs of Chinese
assertiveness and other developments. For example, ARF is yet to move
beyond a confidence-building stage to a more action-oriented preventive
diplomacy role. The entry of the United States into the EAS in 2011 creates
the danger of it being undermined by US-China competition. The unity of
ASEAN shows signs of being frayed by intramural conflicts, such as the
armed clashes in 2011 between Thai and Cambodian forces near the Preah
Viehar Temple, and differences over how to deal with Chinese territorial
claims. The latter was evident in July 2012 when the meeting of ASEAN
foreign ministers in Cambodia failed for the first time to issue a joint
communiqué owing to disagreements over the South China Sea conflict.
These episodes suggest that socialization in Asia remains incomplete, and
that while Asian institutions as claimed by the Constructivists may be
regarded as distinctive, the “ASEAN Way” may no longer work and may
need to be reinvented or replaced with a more institutionalized and legalistic
form of regional cooperation.

ANALYTICAL ECLECTICISM

It is quite obvious that the lines separating the three theoretical perspectives
on Asian international relations have never been neat. As David
Shambaugh’s introduction to this volume reminds us, “no single IR theory
explains all.” This brings us to the question of what Katzenstein and Sil have
called “analytic eclecticism.”42 The usefulness of analytic eclecticism lies in
producing middle-range theoretical arguments as well as in addressing
“problems of wide scope that, in contrast to more narrowly parsed research
puzzles designed to test theories or fill in gaps within research traditions,
incorporate more of the complexity and messiness of particular real-world
situations.”43 This is especially relevant to the analyses of “mixed scenarios”
of conflict and cooperation, which is perhaps more apt for Asia than the
extremes of “ripe for rivalry” and “security community.” I would add that
such eclecticism is needed not just between theoretical paradigms but also
within them (intraparadigm and interparadigm). Prospects for Asia’s future
cannot be ascertained from tightly held paradigmatic frameworks, but from
synthesis between and within them.
This chapter has suggested a considerable overlap between Liberalism and
Constructivism (which in turn has significant English School foundations),
especially when it comes to the study of Asian regional institutions and to
countering Realist pessimism about Asia’s future international order. But the
Realist-favored notion of balance of power can also be seen as having its
basis in normative and social foundations, as evident in notions such as “soft
balancing” or “institutional balancing.”
The idea of a Consociational Security Order developed by this author
represents an example of the application of analytical eclecticism to Asian
security.44 “A consociational security order (CSO) is a relationship of mutual
accommodation among unequal and culturally diverse groups that preserves
each group’s relative autonomy and prevents the hegemony of any particular
group/s.”45 The emergence of a CSO depends on four conditions:
interdependence, equilibrium, elite restraint, and institutions and norms. First,
interdependence among states helps to offset the centrifugal elements of
cultural difference and animosity within consociations and contributes to the
imperative of common survival and well-being. This view accords with
Liberal theory, which has for long pointed to the pacific effects of economic
interdependence. Second, stability in a consociation comes from equilibrium.
Unlike offensive Realists who argue that states go for “all they can get,” with
hegemony as their ultimate goal, defensive Realists maintain that states are
generally satisfied with the status quo if their own security is not challenged
and thus concentrate on maintaining a balance of power. Groups in a CSO
engage in coalitional politics to deny hegemony to any particular group. This
assumption echoes defensive Realism. Third, a CSO relies on institutions,
although consociational institutions promote the softer norms of cooperative
security rather than the conventional forms of collective security or collective
defense. Collective security and collective defense systems are usually geared
to deterring and punishing aggression (“security against” an adversary) and
require hard power or military action that only the great powers can provide.
By contrast, cooperative security stresses reassurance (“security with” a
competitor or adversary) and relies primarily on conflict management (both
within a consociation and with outsiders), confidence-building measures, and
political-diplomatic norms. Finally, a CSO relies on “elite restraint,” which
borrows from both Liberal institutionalism and Constructivism, which argue
that institutions and norms induce strategic restraint and promote cooperative
behavior.
Thus defined, the conditions or the stability mechanisms of a CSO draw
from multiple theoretical lenses: defensive Realism (balance of power),
Liberalism (especially economic interdependence and institutions), and
Constructivism (socialization and cooperative security norms), thereby
creating an eclectic framework for the study of the Asian security order. The
stability mechanisms of a CSO can be mutually reinforcing. Balancing
prevents hegemonic orders, whether that of a single power, duopolies, or
concerts. Elite restraint fosters shared leadership in multilateral institutions.
These, along with interdependence, encourage “soft balancing” and
discourage outright containment approaches that might aggravate the security
dilemma and rivalries. These mechanisms do not make war “unthinkable,”
but they do inhibit actors from engaging in behavior that might lead to a
system collapse. Competition is controlled, and outright war is avoided for
the sake of common survival.
The CSO framework offers a novel and dynamic approach to conflict and
stability in Asia. Going beyond existing perspectives that rely on single
theoretical lenses, it captures a wider range of determinants of Asia’s
security. It emphasizes the regional context of the implications of China’s rise
instead of focusing on great power (especially US-China) relationships, as in
many existing perspectives on the issue. It represents a mixed scenario of
conflict and stability, presenting an alternative between the extremes of
anarchy that represent Europe’s past as Asia’s future on the one hand and a
security community that renders war unthinkable on the other (Europe’s
present as Asia’s future). While not necessarily predictive, it offers an
analytic device for evaluating trends and directions in Asian security by
identifying the conditions— interdependence, equilibrium, institutions, and
elite restraint—that can produce order (understood as the absence of system-
destroying war rather than of small-scale conflicts), and their absence,
disorder. While no single condition is sufficient by itself to ensure order,
together they may go a long way in preventing catastrophic conflict in Asia.
While the debate between Realist “pessimism” and Liberal/Constructivist
“optimism” about the future of Asia’s security order remains far from settled,
it should not be forgotten that debates over Asian international relations can
also be intraparadigmatic, such as the Kang-Acharya Constructivist debate
and between offensive and defensive Realists. Moreover, the debate over
Asia’s future security order is less about whether it will feature some type of
cooperative mechanism (rather than approximating a pure Hobbesian
anarchy) than which type of cooperation/accommodation (concert,
community, soft balancing, or hierarchy) will be feasible. And in this context,
while traditional conceptions of regional order in Asia revolved around the
relationship of competition and accommodation among the great powers,
how the great powers relate to weaker states has become especially crucial
for a region in which the weaker states drive regional cooperation and
institution building.

CONCLUSION: FROM EXCEPTIONALISM TO

UNIVERSALISM

IR theory is increasingly used in classrooms and writings on Asian IR in

Japan, Korea, China, and Taiwan, and to a lesser extent Southeast and South
Asia. It should be noted that a good deal of “theory” that might be helpful in
broadening the scope of IR remains “hidden” due to language barriers, lack
of resources in Asian institutions, and the dominance of Western scholarly
and policy outlets. But this is changing with the infusion of new scholarship
and the broadening intellectual parameters of theoretical discourses.
As elsewhere and in other points of history, theoretical arguments and
claims about Asian IR closely approximate shifts in global and regional
international relations. The growing popularity of Liberalism and
Constructivism in Asian IR is thus closely related to the end of the Cold War
and the emergence of new regional institutions in Asia. While events drive
theoretical shifts, to some extent theories have offered rationalization of
event-driven policy perspectives and approaches. Thus, Sino-US tensions
over Taiwan and other East Asian security issues have given a fresh impetus
for Realist pessimism, while the end of the Cambodia conflict, the South
China Sea Code of Conduct, and the emergence of the ARF and East Asia
Summit (EAS) have given a fillip to Liberal and Constructivist optimism.
What next in the theoretical evolution of Asian IR studies? Realism retains
a dominant, if no longer hegemonic, position. Realist arguments such as
“power transition,” “back to the future,” “ripe for rivalry,” and “offensive
Realism” have often provided the starting point of debate over Asia’s
emerging and future international order. But newer approaches, especially
Liberal and Constructivist perspectives, are enriching academic and policy
debates on Asian IR. Realism, especially empirical Realism (i.e., academic
and policy writings that reflect the philosophical assumptions of Realism
without being self-consciously framed in theoretical jargon), will remain
important, but so will Constructivism. While Constructivism has been
criticized as a fad, it is likely to retain a central place in writings on Asian IR
because its focus on issues of culture and identity resonate well with Asian
thinkers and writers. And Liberal perspectives, such as democratic peace and
institutions, which have been neglected thus far, might assume greater
prominence, but perhaps not as a justification for the persistence of the
American-led Liberal Hegemonic Order.
More importantly, with the growing interest in theorizing Asia’s
international relations, the debate over the relevance of Western theory to
analyze Asia has intensified. Perspectives that view IR theory as a
fundamentally ethnocentric enterprise that does a poor job of analyzing Asian
IR are becoming commonplace in Asian writings on the region’s IR. And this
view is shared by a number of leading Western scholars. This debate has also
led to a search for an “Asian IR theory,” akin to the English School or the
Copenhagen School. But there is little movement in the direction of an Asian
IR theory in the regional sense. This is not surprising, given Asia’s sub-
regional and national differences.46 There is a great scope for national
perspectives, even in a highly contested manner.47 For example, many
Chinese scholars are attempting to develop a “Chinese School of IR,” derived
either from Chinese historical practices, such as the Warring States Period
and the tributary system, or from the metaphysical Chinese worldview.48
An equally vocal group of Chinese scholars rejects this approach, insisting
that IR theory must have a universal frame. According to this group, attempts
to develop IR theory should be guided by “scientific” universalism, rather
than cultural specificity.49 Going by this immensely helpful and exciting
debate, the challenge, then, is to broaden the horizons of existing IR theory
by including the Asian experience, rather than either to reject IR theory or to
develop a Chinese or Asian School that will better capture and explain
China’s or Asia’s unique historical experience, but have little relevance
elsewhere, even though such universalism would still require deeper
investigations into Asian history.
There is thus a growing space for an Asian universalism in IR theory. I use
the term “Asian universalism” since it is in direct juxtaposition to the Asian
exceptionalism found in the extreme form in the notion of Asian values, an
Asian conception of human rights, and Asian democracy, or in a more
moderate strain in claims about an Asian form of capitalism, or an Asian
mode of globalization. Asian exceptionalism, especially in its extreme form,
refers to the tendency to view Asia as a unique and relatively homogenous
entity that rejects ideas, such as human rights and democracy, that lay a claim
to universality but which are in reality constructed and exported by the West.
Such ideas are to be contested because of their lack of fit with local cultural,
historical, and political realities in Asia. Asian universalism by contrast refers
to the fit, often constructed by local idea entrepreneurs, between external and
Asian ideas and practices with a view to giving a wider dissemination to the
latter. This involves the simultaneous reconstruction of outside ideas in
accordance with local beliefs and practices and the transmission and diffusion
of preexisting and localized forms of knowledge beyond the region. Whereas
Asian exceptionalism is relevant only in analyzing and explaining local
patterns of IR, Asian universalism would use local knowledge to understand
and explain both local and foreign IR.
The impetus for Asian universalism comes from several sources. The first
is a historical shift from economic nationalism, security bilateralism, and
authoritarian politics in the post-war period to economic interdependence,
security multilateralism, and democratic politics of the post–Cold War era.
This shift is far from linear, but it is occurring and having a substantial
impact on studies of Asian IR. This need not be seen as a purely or mainly
Liberal trend, as it would be mediated by local historical, cultural, and
ideational frameworks that have their roots in local conceptions of power
politics, utilitarianism, and normative transformation. This shift challenges
the distinction between Asian and universal knowledge claims and expands
the scope for grafting outside theoretical concepts onto Asian local
discourses.
The region also abounds in historical forms of local knowledge with a
universal reach. Examples include the ideas of Asian thinkers such as
Rabindranath Tagore’s critique of nationalism, Nehru’s neutralism and non-
alignment, and Gandhi’s satyagraha.50 There are many Japanese writings that
were developed either in association with, or in reaction against, Western
concepts of nationalism, internationalism, and international order.51 Although
some of these Indian and Japanese contributions were either critiques of
Western ideas (like nationalism) or were borrowed forms of Western ideas
(such as Gandhi’s borrowing of passive resistance), they were sufficiently
infused with local content to be deemed a form of local knowledge.
Moreover, the outcome of this interaction between Western and Asian ideas
was “constitutive” in the sense that it redefined both the Western ideas and
the local identities. And while the localization of Western ideas might have
been originally intended for domestic or regional audiences, the resulting
concepts and practices did possess a wider conceptual frame to have
relevance beyond Asia.
Such ideas deserve a place alongside existing theories of IR. Historical
patterns of interstate and intercivilizational relations in Asia, including the
tributary system, also have their place if they can be conceptualized in a
manner that would extend their analytical utility and normative purpose
(present in any theory) beyond China or East Asia.52
Asian practices of international relations are another rich source of Asian
universalism in IR theory.53 Asian regionalism, which manages the balance of
power and expands the potential for a regional community, also provides a
good potential avenue for such universalism. Instead of drawing a sharp
distinction between what is European and what is Asian, theoretical
perspectives on Asian regionalism should explore commonalities that are
quite substantial and would constitute the core of a universal corpus of
knowledge about regionalism in world politics.54
A final word of this chapter concerns the question whether the theoretical
writings on Asia would challenge or enrich the broader corpus of IR theory,
which has been derived from Western or transatlantic ideas, experiences, and
writings. As stated, I am not a fan of Asian exceptionalism. Nor do I think
theories derived from Asia would entirely displace the existing corpus of IR
theory. But I also do not think existing IR theories are sufficient, as Ikenberry
and Mastanduno have argued, with minor adjustments, to explain the major
developments in the international relations of Asia. And I am more confident
than Johnston55 appears to be about the possibility of Asia offering a robust
challenge to many deeply held assumptions of the three mainstream IR
theories, namely, Realism, Liberalism, and Constructivism. Johnston sets the
bar too high by holding that for theoretical contributions to IR focusing on
Asia (whether by Asians or non-Asians) to succeed, they would need to
“resolve major controversies, lead to breakthroughs, and drive theory
development.” He is not sure if this will ever happen. While I cannot be
certain if Asia can resolve major controversies (especially those that
originally emerged in Western contexts, often with limited relevance for
Asia), I could see the possibility of theoretical contributions to IR focusing on
Asia in time producing breakthroughs and driving theory development,
especially by offering new concepts and approaches drawing on Asian ideas,
history, and practice.56 This is already evident in works on Asian regionalism,
conceptualizations of historical interstate systems (Kang), and the
aforementioned work on norm diffusion.
While the distinctive aspects of Asia’s history, ideas, and approaches will
condition the way Western theoretical ideas are understood and make their
impact, elements of the former will find their way into a wider arena,
influencing global discourses about international order in the twenty-first
century. The challenge for theoretical writings on Asian IR is to reflect on
and conceptualize this dynamic, whereby scholars do not stop at testing
Western concepts and theories in the Asian context, but generalize from the
latter in order to enrich a hitherto Western-centric IR theory.57

NOTES
I wish to thank Muthiah Alagappa, David Shambaugh, and Michael Yahuda for their helpful
suggestions for this chapter.
1. In this chapter, I use the term theory broadly, focusing on grand theories that have paradigmatic
status, such as Realism, Liberalism, and Constructivism. The term theory has many different meanings.
The American understanding of theory tends to have a social-scientific bias, whereby the general
assumptions of a theory must be translated into causal propositions that can be rigorously tested and
yield some measure of prediction. Europeans view theory more loosely as any attempt to systematically
organize data, structure questions, and establish a coherent and rigorous set of interrelated concepts and
categories. Writings on Asian IR remain atheoretical in either sense, but more so in terms of the
American understanding than the European one. For further discussion, see Amitav Acharya and Barry
Buzan, “Why Is There No Non-Western IR Theory: An Introduction,” International Relations of the
Asia-Pacific 7 (October 2007): 287–312. The special issue also explores the reasons for the lack of
interest in theory in the Asian IR literature, one of the main factors being the dominance of area
specialists in the field.
2. In visits to China, the author found widespread evidence of a major growth of interest in theory
among Chinese scholars of international relations. This is true not only of universities such as Beijing,
Tsinghua, and Fudan, but also of think tanks such as the Institute of World Economics and Politics of
the Chinese Academy of Social Sciences, which publishes the leading IR journal of China: World
Economics and Politics. It is published in Chinese. Tsinghua University’s Institute of International
Studies has also launched an English-language journal published by Oxford University Press, titled
Chinese Journal of International Relations. For an up-to-date survey of the IR field in China today, see
David Shambaugh, “International Relations Studies in China: History, Trends, and Prospects,”
International Relations of the Asia-Pacific 11, no. 3 (September 2011): 339–72.
3. Stanley Hoffmann, “An American Social Science: International Relations,” Daedalus 106, no. 3
(1977): 41–60; Ole Wæver, “The Sociology of a Not So International Discipline: American and
European Developments in International Relations,” International Organization 52, no. 4 (1998): 687–
727; Robert A. Crawford and Darryl S. L. Jarvis, eds., International Relations—Still an American
Social Science? Toward Diversity in International Thought (Albany: State University of New York
Press, 2000).
4. David C. Kang, “Getting Asia Wrong: The Need for New Analytical Frameworks,” International
Security 27, no. 4 (Spring 2003): 57–85.
5. Peter J. Katzenstein, “Introduction: Asian Regionalism in Comparative Perspective,” in Network
Power: Japan and Asia, ed. Peter J. Katzenstein and Takashi Shiraishi (Ithaca, NY: Cornell University
Press, 1997), 5.
6. G. John Ikenberry and Michael Mastanduno, “The United States and Stability in East Asia,” in
International Relations Theory and the Asia-Pacific, ed. G. John Ikenberry and Michael Mastanduno
(New York: Columbia University Press, 2003), 421–22.
7. Stephen M. Walt, “International Relations: One World, Many Theories,” Foreign Policy 110
(Spring 1998): 29–46.
8. This leaves out critical IR theories such as Marxism, post-modern/post-structural, post-colonial,
and feminist perspectives. Some argue that critical theories have been concerned mostly with critiquing
their “mainstream” rivals, especially Realism and Liberalism, and have made little attempt to offer an
alternative conception or trajectory of regional order. But the insights of critical perspectives are
especially crucial in understanding and analyzing the impact of globalization on Asian IR, the
limitations and abuses of the sovereign state system and the national security paradigm, and Asia’s
uneven and unjust development trajectory. An important recent book applying critical theories of IR to
Asia is Anthony Burke and Matt McDonald, eds., Critical Security in the Asia-Pacific (Manchester:
Manchester University Press, 2007). Critical IR theory includes, among others, post-modernism, post-
structuralism, Marxism/neo-Marxism, Gramscian approaches, feminism, and post-colonialism, often in
some combination (e.g., post-colonial feminism).
9. For two well-known perspectives, see Paul Dibb, Towards a New Balance of Power in Asia,
Adelphi Paper 295 (London: International Institute for Strategic Studies, 1995); Michael Leifer, The
ASEAN Regional Forum, Adelphi Paper 302 (London: International Institute for Strategic Studies,
1996).
10. Lee has repeatedly asserted his faith in the balance of power, a typical example being his
comments in Canberra in 2007 that “the golden strand [in Australia-Singapore relations] is our common
strategic view that the present strategic balance in the Asia-Pacific, with the U.S. as the preeminent
power, provides stability and security that enables all to develop and grow in peace.” See “S’pore and
Australia Share Common Strategic View: MM,” Straits Times, March 29, 2007,
http://app.mfa.gov.sg/pr/read_content.asp? View, 6860 (accessed January 25, 2008). “MM” refers to
“Minister Mentor.”
11. For a theoretical discussion of Lee’s views, see Amitav Acharya and See Seng Tan, “Betwixt
Balance and Community: America, ASEAN, and the Security of Southeast Asia,” International
Relations of the Asia-Pacific 5, no. 2 (2005). For a recent restatement of Lee’s position, see “Excerpts
from an Interview with Lee Kuan Yew,” International Herald Tribune, August 29, 2007,
http://www.iht.com/articles/2007/08/29/asia/lee-excerpts.php?page=1 (accessed September 23, 2007).
12. “Toward a New Balance of Power,” Time, September 22, 1975,
http://www.time.com/time/magazine/article/0,9171,917875,00.html (accessed September 23, 2007).
13. Kenneth N. Waltz, “The Stability of the Bipolar World,” Daedalus 93 (Summer 1964): 907;
Kenneth N. Waltz, Theory of International Politics (Reading, MA: Addison-Wesley, 1979), 171; John
Mearsheimer, “Back to the Future: Instability in Europe after the Cold War,” International Security 15,
no. 1 (Summer 1990): 5–55. A contrary view that stresses the stabilizing potential of multipolarity is
Karl W. Deutsch and J. David Singer, “Multipolar Power Systems and International Stability,” World
Politics 16, no. 3 (April 1964): 390–406.
 14. For a discussion and rebuttal of this view in the context of the Third World, see Amitav Acharya,
“Beyond Anarchy: Third World Instability and International Order after the Cold War,” in
International Relations Theory and the Third World, ed. Stephanie Neumann (New York: St. Martin’s,
1997), 159–211.
15. John J. Mearsheimer, The Tragedy of Great Power Politics (New York: Norton, 2001), 41.
16. Leifer, The ASEAN Regional Forum, 53–54. For a critique of Leifer’s view, see Amitav Acharya,
“Do Norms and Identity Matter? Community and Power in Southeast Asia’s Regional Order,” Pacific
Review 18, no. 1 (March 2005): 95–118.
17. This shows that Realism is not a homogenous theory as its critics sometimes portray and that
important differences exist among Realists insofar as the nature and purpose of international institutions
are concerned. It also shows a disjuncture between disciplinary neo-Realist theory and Realist
perspectives on Asian institutions. Mearsheimer, a neo-Realist (but not an Asian specialist), viewed
international institutions as pawns in the hands of great powers. John J. Mearsheimer, “The False
Promise of International Institutions,” International Security 19, no. 3 (Winter 1994–1995): 5–49.
Michael Leifer took a more nuanced view. While institutions were not able to take care of the
fundamental security of nations, great power intervention in Asia was not inevitable, but only occurred
when there was a conjunction between great power interests and disputes between or within ASEAN
states. Institutions could play a role in the management of regional order if regional actors purposively
used institutions to engage different great powers so that none acquired overriding influence. For
example, following the end of the Cold War, Leifer saw the ARF as the means for locking China into a
network of constraining multilateral arrangements that would in turn “serve the purpose of the balance
of power by means other than alliance.” See Michael Leifer, “The Truth about the Balance of Power,”
in The Evolving Pacific Power Structure, ed. Derek DaCunha (Singapore: Institute of Southeast Asian
Studies, 1996), 51. I am grateful to Michael Yahuda for pointing to this aspect of Leifer’s writings. This
acceptance that multilateral arrangements can be “constraining” has much in common with
institutionalist scholars like Keohane and Martin. Robert O. Keohane and Lisa Martin, “The Promise of
Institutionalist Theory,” International Security 20, no. 1 (1995): 42; Ralf Emmers, Cooperative
Security and the Balance of Power in ASEAN and ARF (London and New York: RoutledgeCurzon,
2003).
18. Aaron Friedberg, “Ripe for Rivalry: Prospects for Peace in a Multipolar Asia,” International
Security 18, no. 3 (Winter 1993/1994): 5–33; Aaron L. Friedberg, Europe’s Past, Asia’s Future?, SAIS
Policy Forum Series 3 (Washington, DC: Nitze School of Advanced International Studies, John
Hopkins University, 1998).
19. Barry Buzan and Gerald Segal, “Rethinking East Asian Security,” Survival 36, no. 2 (Summer
1994): 3–21; Robert Gilpin, “Sources of American-Japanese Economic Conflict,” in International
Relations Theory and the Asia-Pacific, ed. G. John Ikenberry and Michael Mastanduno (New York:
Columbia University Press, 2003), 299–322.
20. See Amitav Acharya, “Why Is There No NATO in Asia? The Normative Origins of Asian
Multilateralism” (Working Paper 05-05, Weatherhead Center for International Affairs, Harvard
University, Cambridge, MA, 2005).
21. Muthiah Alagappa, “Introduction,” in Asian Security Order: Normative and Instrumental
Features, ed. Muthiah Alagappa (Stanford, CA: Stanford University Press, 2003).
22. Xuetong Yan, “Decade of Peace in East Asia,” East Asia: An International Quarterly 20, no. 4
(Winter 2003): 31. This view sets limits to Realist optimism found in Robert Ross’s “The Geography of
the Peace: East Asia in the Twenty-First Century,” International Security 23, no. 4 (Spring 1999): 81–
118. Ross argues that a geopolitical balance between the United States as the dominant maritime power
and China as the leading continental power would preserve stability in post–Cold War East Asia.
23. Although not for Gilpin and others who would attribute international stability to the role of a
hegemonic power and consider the absence of balancing against such a power as an indicator of
stability. Robert Gilpin, War and Change in World Politics (New York: Cambridge University Press,
1981).
24. John Vasquez, “Realism and the Study of Peace and War,” in Realism and Institutionalism in
International Studies, ed. Michael Breecher and Frank P. Harvey (Ann Arbor: University of Michigan
Press, 2002), 79–94; John Vasquez and Collin Elman, eds., Realism and the Balancing of Power: A
New Debate (Upper Saddle River, NJ: Prentice Hall, 2003).
25. Alastair Iain Johnston, “How New and Assertive Is China’s New Assertiveness?,” International
Security 37, no. 4 (2013): 7–48.
26. Ming Wan, “Economic Interdependence and Economic Cooperation,” in Asian Security Order:
Normative and Instrumental Features, ed. Muthiah Alagappa (Stanford, CA: Stanford University Press,
2003); Benjamin E. Goldsmith, “A Liberal Peace in Asia?,” Journal of Peace Research 44, no. 1
(2007): 5–27. Goldsmith finds weak empirical support for the pacific effects of democracy and
international institutions, but evidence for the pacific effects of interdependence is “robust.” For further
Asian case studies, see Ashley J. Tellis and Michael Wills, eds., Strategic Asia, 2006–07: Trade,
Interdependence, and Security (Seattle, WA: National Bureau of Asia Research, 2006).
27. “China Becomes Japan’s Largest Trading Partner for Five Consecutive Years,” People’s Daily
Online, February 21, 2012, http://english.people.com.cn/90778/7735801.ht (accessed September 14,
2013).
28. Wayne M. Morrison, “China-U.S. Trade Issues,” CRS Report for Congress, 7-5700 (Washington,
DC: Congressional Research Service, Library of Congress, July 17, 2013), 2; “China’s US Treasury
Holdings Hit Record $1.3 Trillion,” July 17, 2013, http://rt.com/business/china-federal-debt-record-207
(accessed September 14, 2013).
29. John Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the American
World Order (Princeton, NJ: Princeton University Press, 2011).
30. Jeffrey Checkel, “The Constructivist Turn in International Relations Theory,” World Politics 50,
no. 2 (January 1998): 324–48.
31. Christopher Hemmer and Peter J. Katzenstein, “Why Is There No NATO in Asia? Collective
Identity, Regionalism, and the Origins of Multilateralism,” International Organization 56, no. 3
(Summer 2002): 575–607. They reject not only the power disparity explanation, but also neo-Liberal
explanations that would see alliance design as a function of differing calculations about what would be
the most efficient institutional response to the threat at hand. Europe and Asia differed in this respect:
the threat in Europe was a massive cross-border Soviet invasion, while the threat in Asia was
insurgency and internal conflict. For other explanations (Realist, Liberal, and mixed) of this puzzle, see
Donald Crone, “Does Hegemony Matter? The Reorganization of the Pacific Political Economy,” World
Politics 45, no. 4 (July 1993): 501–25; John S. Duffield, “Why Is There No APTO? Why Is There No
OSCAP: Asia Pacific Security Institutions in Comparative Perspective,” Contemporary Security Policy
22, no. 2 (August 2001): 69–95; and Galia Press-Barnathan, Organizing the World: The United States
and Regional Cooperation in Asia and Europe (New York: Routledge, 2003).
32. Hemmer and Katzenstein, “Why Is There No NATO in Asia?,” 575.
33. Acharya, “Why Is There No NATO in Asia?”
34. Amitav Acharya, “Ideas, Identity and Institution-Building: From the ‘ASEAN Way’ to the ‘Asia-
Pacific Way’?” Pacific Review 10, no. 3 (1997): 319–46. Amitav Acharya, “How Ideas Spread: Whose
Norms Matter? Norm Localization and Institutional Change in Asian Regionalism,” International
Organization 58, no. 2 (Spring 2004): 239–75; Tobias Ingo Nischalke, “Insights from ASEAN’s
Foreign Policy Cooperation: The ‘ASEAN Way,’ a Real Spirit or a Phantom?,” Contemporary
Southeast Asia 22, no. 1 (April 2000): 89–112; Jürgen Haacke, ASEAN’s Diplomatic and Security
Culture: Origins, Developments and Prospects (London: RoutledgeCurzon, 2003); Nikolas Busse,
“Constructivism and Southeast Asian Security,” Pacific Review 12, no. 1 (1999): 39–60;
Kamarulzaman Askandar, “ASEAN and Conflict Management: The Formative Years of 1967–1976,”
Pacifica Review (Melbourne) 6, no. 2 (1994): 57–69; Amitav Acharya, “Regional Institutions and
Asian Security Order: Norms, Power and Prospects for Peaceful Change,” in Asian Security Order:
Instrumental and Normative Features, ed. Muthiah Alagappa (Stanford, CA: Stanford University Press,
2003), 210–40.
35. Katzenstein, “Introduction: Asian Regionalism in Comparative Perspective”; Amitav Acharya
and Alastair Iain Johnston, eds., Crafting Cooperation: Regional International Institutions in
Comparative Perspective (Cambridge: Cambridge University Press, 2007).
36. Thomas C. Berger, “Set for Stability? Prospects for Conflict and Cooperation in East Asia,”
Review of International Studies 26, no. 3 (July 2000): 405–28; Thomas C. Berger, “Power and Purpose
in Pacific East Asia: A Constructivist Interpretation,” in International Relations Theory and the Asia-
Pacific, ed. G. John Ikenberry and Michael Mastanduno (New York: Columbia University Press, 2003),
387–420.
37. Kang, “Getting Asia Wrong”; David Kang, China Rising: Peace, Power and Order in East Asia
(New York: Columbia University Press, 2007).
38. Acharya, “Will Asia’s Past Be Its Future?” These criticisms from Constructivist scholars suggest
that the latter are not a homogenous orthodoxy as some critics allege.
39. In the words of a Malaysian scholar, “Thinking in the Constructivist vein has been about the best
gift made available to scholars and leaders in the region.” See Azhari Karim, “ASEAN: Association to
Community: Constructed in the Image of Malaysia’s Global Diplomacy,” in Malaysia’s Foreign
Policy: Continuity and Change, ed. Abdul Razak Baginda (Singapore: Marshal Cavendish Editions,
2007), 113.
40. Acharya, “Do Norms and Identity Matter?”; Amitav Acharya and Richard Stubbs, “Theorizing
Southeast Asian Relations: An Introduction,” in “Theorizing Southeast Asian Relations: Emerging
Debates,” ed. Acharya and Stubbs, Pacific Review 19, no. 2 (June 2006): 125–34.
41. Amitav Acharya, “How Ideas Spread”; Amitav Acharya, Whose Ideas Matter: Agency and Power
in Asian Regionalism (Ithaca, NY: Cornell University Press, 2009); Amitav Acharya, “Norm
Subsidiarity and Regional Orders: Sovereignty, Regionalism and Rule Making in the Third World,”
International Studies Quarterly 55 (2011): 95–123; Amitav Acharya, Civilizations in Embrace: The
Spread of Ideas and the Transformation of Power (Singapore: Institute of Southeast Asian Studies,
2013).
42. Peter J. Katzenstein and Rudra Sil, “Rethinking Asian Security: A Case for Analytical
Eclecticism,” in Rethinking Security in East Asia: Identity, Power and Efficiency, ed. J. J. Suh, Peter J.
Katzenstein, and Allen Carlson (Stanford, CA: Stanford University Press, 2004), 1–33; Rudra Sil and
Peter Katzenstein, Beyond Paradigms: Analytic Eclecticism in the Study of World Politics (New York:
Palgrave Macmillan, 2010).
43. Rudra Sil and Peter Katzenstein, “Analytic Eclecticism in the Study of World Politics:
Reconfiguring Problems and Mechanisms across Research Traditions,” Perspectives on Politics 8, no.
2 (June 2010): 411–31.
44. Amitav Acharya, “Power Shift or Paradigm Shift? China’s Rise and Asia’s Emerging Security
Order,” International Studies Quarterly (2013): 1–16.
45. Acharya, “Power Shift or Paradigm Shift?,” 2.
46. Acharya and Buzan, “Why Is There No Non-Western IR Theory: An Introduction.”
47. Amitav Acharya and Barry Buzan, “Conclusion: On the Possibility of a Non-Western IR Theory
in Asia,” in “Why Is There No Non-Western IR Theory: Reflections On and From Asia,” 427–28.
48. Qin Yaqing, “Why Is There No Chinese International Relations Theory?” in “Why Is There No
Non-Western IR Theory?,” 313–40.
49. Interviews with Chinese scholars: Tang Shiping, formerly of the Chinese Academy of Social
Sciences, September 8, 2007; Qin Yaqing, vice president of China Foreign Affairs University; Yan
Xuetong, director of the Institute of International Relations at Tsinghua University; Chu Sulong,
director of the Institute of Security Studies at Tsinghua University; and Wang Zhengyi, professor of
International Political Economy, Beijing University, all during September 10–13, 2007.
50. For a review of Indian ideas that might be of theoretical significance, see Navnita Chadha Behera,
“Re-Imagining IR in India,” in “Why Is There No Non-Western IR Theory?” See also George
Modelski, “Foreign Policy and International System in the Ancient Hindu World,” American Political
Science Review 58, no. 3 (September 1964): 549–60.
51. Takashi Inoguchi, “Why Are There No Non-Western Theories of International Relations? The
Case of Japan,” in “Why Is There No Non-Western IR Theory?” In this essay, Inoguchi highlights the
theoretical work of three pre-1945 Japanese writers: Nishida Kitaro, a “constructivist with Japanese
characteristics”; Tabata Shigejiro, a normative international law theorist placing popular sovereignty
(as with Samuel von Pufendorf) before Grotian state sovereignty; and Hirano Yoshitaro, a social
democratic internationalist.
52. One notable such attempt is Victoria Hui, “Towards a Dynamic Theory of International Politics:
Insights from Comparing Ancient China and Early Modern Europe,” International Organization 58
(Winter 2004): 174–205.
53. Muthiah Alagappa, ed., Asian Security Practice: Material and Ideational Influences (Stanford,
CA: Stanford University Press, 1998).
54. Amitav Acharya, Whose Ideas Matter: Norms, Power and Institutions in Asian Regionalism
(Ithaca, NY: Cornell University Press, 2008).
55. Alastair Iain Johnston, “What (If Anything) Does East Asia Tell Us about International Relations
Theory?,” Annual Review of Political Science 15 (2012): 53–78.
56. More on this in Amitav Acharya, “International Relations Theory and the Rise of Asia,” in
Oxford Handbook of International Relations of Asia, ed. Rosemary Foot, Saadia Pekkanen, and John
Ravenhill (Oxford: Oxford University Press, 2013).
57. In his study of cultural globalization, Arjun Appadurai calls this process “repatriation” of
knowledge. Arjun Appadurai, Modernity at Large: Cultural Dimensions of Globalization (Minneapolis:
University of Minnesota Press, 1996).
 Part Three
THE ROLE OF EXTERNAL POWERS
 Chapter Four
The United States in Asia
Durable Leadership
ROBERT SUTTER

This chapter examines significant challenges to US interests and influence in

the Asia-Pacific region at the start of the twenty-first century and assesses the
strengths and weaknesses of the American government’s recently enhanced
engagement efforts with the region. It finds enduring US strengths, forecasts
durable American regional leadership, and considers alternative outcomes.
The end of the Cold War and collapse of the Soviet Union in 1991
changed the position of the United States in Asia. Since World War II, the
United States had arguably played the leading role in the affairs of the Asia-
Pacific region, but the challenges facing the United States often were
multifaceted and daunting. They included the “loss” of China to the Soviet
camp, the failure to win wars and defeat communist aggression and
expansion in the costly Korean War and the protracted US-led war in
Vietnam, the specter of Soviet strategic dominance prompting American
alignment with Maoist China, and the seeming inability of the United States
to compete economically with Japan’s commercial sway in the Asia-Pacific
region during the 1970s and 1980s.
In the 1990s, for the first time since the start of the Cold War in the late
1940s, the United States appeared to be the region’s truly dominant power,
facing few challenges from major competitors. The Soviet Union was no
more; Japan entered a protracted period of economic stagnation, and China
was preoccupied with keeping internal order following the most serious
leadership crisis of the People’s Republic of China that was prompted by the
mass demonstrations in Beijing’s Tiananmen Square and bloody suppression
on June 4, 1989.1
Whatever dominance the United States exerted in the region eroded with
twenty-first-century developments. Heading the list of signs of American
decline in the Asia-Pacific region and in international affairs more broadly
were the protracted American wars in Afghanistan and Iraq related to an
inconclusive US-led war on terror, the heavy impact on the US economy of
the worst international economic recession in almost a century that was
catalyzed by American financial malfeasance and neglect, and repeated US
government funding crises prompted by acute American political polarization
and frequent episodes of gridlock in US government decision making.2
In notable contrast to the recent American experience was the ever greater
prominence of China as the leading Asian power, buttressed by three decades
of annual double-digit economic growth, over two decades of annual double-
digit military spending increases, and active diplomatic involvement focused
on bilateral and multilateral relations in the Asia-Pacific region. China
became the world’s largest manufacturer, largest trader, and largest creditor
nation, with over $3 trillion in foreign exchange reserves. Advancing quickly
past Germany and Japan, China pursued rapid growth, which meant that it
was only a matter of time before China would surpass the United States as
the world’s leading economy. The Chinese military advancement reached a
point where Chinese military forces had the means to contest and impede
access of American air and naval forces to Taiwan and other areas along
China’s eastern periphery (so-called anti-access/area denial). Against the
backdrop of ever-growing Chinese strength and capabilities, Beijing’s efforts
to spread its influence evolved in recent years from a strategy of mutual
accommodation with other nations and “peaceful development” to a more
“assertive” China that included a variety of more coercive and intimidating
pressures on Asian neighbors and the United States, notably involving
disputed maritime and territorial claims along China’s eastern and southern
littoral. The United States and China’s neighbors struggled to come up with
ways and means to deter and dissuade Chinese expansion at their expense in
disputed territories along China’s rim.3

“PIVOTING” TO THE PACIFIC

In this newly challenging environment, beginning in 2009 President Barack

Obama focused on a set of initiatives that raised the priority of the Asia-
Pacific in American global and strategic foreign policy. The effort recognized
and advanced growing American security, economic, and political interests
throughout the Asia-Pacific region—ranging from India to Korea and from
northern Japan to New Zealand and the Pacific Islands. What became known
as the Obama government’s “pivot” or “rebalancing” to the region involved
an evolving emphasis on military, economic, and diplomatic dimensions that
built on existing US strengths. Asia-Pacific governments welcomed the
greater US engagement. The main exception was China, which was critical of
US military initiatives in particular. The Obama government faced a delicate
balancing act. It was focused, on the one hand, on advancing US relations
throughout the region, which at times were clearly competitive with China.
On the other hand, it sought to sustain close engagement with China in order
to avoid significant US-China frictions that would not be welcomed by Asian
government leaders and would be contrary to American interests in fostering
regional stability.4

CHALLENGES TO US INTERESTS AND INFLUENCE IN

ASIA

The start of the twenty-first century saw the American-led global war on
terror result in US leadership and influence spreading from eastern Asia to
South and Central Asia. The United States became the leading foreign power
in South Asia, having good relations with both India and Pakistan. US
military and other relationships with several Central Asian countries also
grew significantly for a few years, though they tended to stall and decline as
the US-led NATO forces began to withdraw from combat roles in
Afghanistan.5
Yet other challenges to US leadership in Asia arose. Some American
policies in Iraq, Afghanistan, and the broader war on terror offended and
alienated majorities in Asia. For much of the George W. Bush administration
(2001–9), US policy appeared inattentive to Asian concerns with
development, nation building, and regional cooperation in multilateral
organizations. Burgeoning intra-Asia trade and investment networks seemed
to diminish the importance of the United States in regional economic matters.
Rising powers, including India and especially China, were portrayed as
gaining regional influence and leadership as the United States was seen to
decline.6
Viewed broadly, US policy in this new century represented the
culmination of a long-standing pursuit of three sets of objectives in policy
toward Asia. First, the United States remains concerned with maintaining
regional stability and a balance of power in Asia favorable to American
interests and opposed to efforts at domination of the region by hostile powers.
Second, US economic interests in the region grow through increasing
involvement in economic development and expanded US trade and
investment. Third, US culture and values prompt efforts to foster in Asia (and
other parts of the world) democracy, human rights, and other trends involving
rules and norms viewed as progressive by Americans. The priority given to
each of these goals has changed over time. US leaders have varied in their
ability to set priorities and organize US objectives as part of a well-integrated
strategic national approach to the Asia-Pacific.7
Following the terrorist attack on America in 2001, the George W. Bush
administration added two specific objectives that remain important for the
United States: elimination of terrorist organizations and curbing proliferation
of weapons of mass destruction that might fall into the hands of terrorists. US
officials during the Bush years from time to time also advanced a US goal of
implicit if not explicit strategic dominance in Asia and other world regions,
premised on unsurpassed US military capabilities. Thus the US Defense
Department’s Quadrennial Defense Review of 2006 noted, “It [the United
States] will also seek to ensure that no foreign power can dictate the terms of
regional or global security. It [the United States] will attempt to dissuade any
military competitor from developing disruptive or other capabilities that
could enable regional hegemony or hostile action against the United States or
other friendly countries, and it will seek to deter aggression or coercion.
Should deterrence fail, the United States would deny any hostile power its
strategic and operational objectives.”8 These stated objectives seemed
generally consistent with the United States seeking a favorable balance of
power in Asia, though they also appeared more assertive than past US
positions. Such emphasis on strategic dominance has not been as prominent
during the Barack Obama administration.9
In addition to the indications of American decline caused by the costly,
protracted, and inconclusive wars in Iraq and Afghanistan, the massive
impact of the economic crisis and recession beginning in 2008, and the grid-
lock in American leadership politics, the US government finds the pursuit of
its interests challenged by the wide range of changes under way in Asia since
the end of the Cold War.10 These changes can be grouped under five
categories.
Changes in regional major power relationships. US policy in Asia has
been compelled to take account of China’s rising power and recent
assertiveness over sensitive territorial issues. Adding to the mix of changing
Asian power relations of importance to US policy are India’s rising power,
Japan’s greater international assertiveness following a period of economic
and political weakness, Russia’s greater activism in Asian affairs, and
Indonesia’s comeback from the collapse of the Suharto regime in 1999.
Economic globalization. The growing force of economic globalization and
related free flow of information have required US policy to adjust to these
international trends and to deal with Asian governments focused on seeking
advantage in a dynamic and increasingly interdependent world economy. In
particular, US-China economic interdependence has underlined reasons why
leaders of both governments seek to avoid serious confrontation or conflict
that would undermine their respective economic development strategies.
Asian multilateralism. US policy has reacted to burgeoning Asian
multilateral organizations which reflect Asian governments’ growing interest
in and convergence over sub-regional and regional multilateral groups and
organizations that address important economic, political, and security
concerns of Asian countries. The US government privately debates the actual
importance of Asian multilateral organizations, which emphasize process
over results, but Asian multilateralism has figured more prominently in US
policy and diplomacy in Asia, especially during the Barack Obama
administration.
The war on terror and nuclear weapons proliferation (especially North
Korea). These recent US priorities often are not shared to the same degree by
many Asian governments, challenging US policy to devise means to build
appropriate coalitions and approaches. The sometimes acute US concern with
North Korea’s development of nuclear weapons and missile delivery systems
resulted in a hard line against Pyongyang for many years during the George
W. Bush government—which alienated many in Asia. North Korea’s
subsequent repeated provocations against South Korea and disregard for
United Nations sanctions, as it continues to develop nuclear forces, have
witnessed greater convergence in US policy with Asia-Pacific governments
—including China, North Korea’s main international supporter.
Changes in US policy. US policy has been compelled to deal with
wariness of many Asian governments concerned over perceived changes in
American policy involving excessive US activism, unilateralism, and
pressures on the one hand, and US neglect, pullback, and withdrawal
regarding Asian affairs on the other. Asian opinion leaders questioned
whether or not the Obama administration’s “rebalancing” policy initiatives
would be sustained in light of US funding constraints exacerbated by partisan
competition and gridlock between the Republican-controlled House of
Representatives and the president.
As US policy makers have adjusted to these changes, they have
encountered resistance to US leadership. Thus, for example, Asian
governments often oppose US pressure for political rights and democracy in
Asia that come at the expense of national sovereignty and regional stability.
Asian governments foster some regional economic groupings that endeavor
to deal with issues of economic competition and globalization in a regional
context, without the interference of the United States. The Obama effort to
develop a rigorous rule-based trans-Pacific free trade area known as the
Trans-Pacific Partnership (TPP) that would feature US participation and
leadership is opposed by a Chinese-led and less rigorous “Regional
Comprehensive Economic Partnership” (RCEP) that notably excludes the
United States.

Hedging
It is difficult to avoid the term hedging when assessing recent discussions of
security and related relationships in Asia. The term is widely used to define
patterns of interaction between and among regional states, and yet it remains
poorly defined and often imprecise. Evelyn Goh, an Australia-based scholar
of Asia-Pacific security dynamics, advised that what is referred to as hedging
is the norm in international relations. Most states adopt insurance policies,
and while they establish military and other relationships with some states,
they avoid committing themselves to potentially antagonistic stances toward
other states most of the time, thereby preserving a maximum range of
strategic options. During the Cold War, such behavior was severely limited
by a need to line up with one side among contending blocs. But that era
ended over twenty years ago.11
 Another way to look at hedging is to see it as contingency planning. Asian
governments face a complicated and uncertain situation, with many variables
impacting their security and overall well-being. Even though most Asian
nations seek to emphasize the positive in their recent security policy and
other initiatives with one another, negative historical experiences reinforce
prudence in supporting preparations for negative developments or
contingencies at the same time.12
Hedging is defined in this chapter as a broad-ranging practice widely used
by Asian governments and the United States in seeking various domestic and
international means in order to safeguard their security and well-being in the
prevailing uncertain (but generally not immediately threatening) environment
in post–Cold War Asia. Asian governments show determination to keep the
initiative in their security, economic, and diplomatic policies as they also
pursue “hedging” strategies notably vis-à-vis China, but do so in a way that
seeks to avoid following US guidance. The post–Cold War Asian order has
witnessed a tendency on the part of most Asian governments to emphasize
nationalistic ambitions and independence. They eschew the tight and binding
alignments of the past in favor of diverse arrangements with various powers
that support security and other state interests in the newly fluid and somewhat
uncertain regional environment.13 The environment is not so uncertain that
countries feel a need to seek close alignment with a major power or with one
another to protect themselves. But it prompts a wide variety of hedging
behavior, with each government seeking more diverse and varied
arrangements in order to shore up security and other important interests.
What this means for the United States is that most Asian governments
want generally positive relations with the United States, the region’s leading
military power, the world’s largest economy, and the country that annually
absorbs manufactured and other goods from Asia’s export-oriented
economies to the point of running annual trade deficits with the region worth
over $350 billion. But some Asian states are wary of US intentions, and they
seek diversified ties to enhance their security and other options. At the same
time, they also remain wary of one another and thus work with the United
States and others to ensure their interests in the face of possible regional
dangers posed by their neighbors.
Most notably, China’s rising prominence and power has prompted an
array of recent hedging activities as the United States and China’s neighbors
endeavor to engage with China constructively on the one hand while they
prepare for possible contingencies involving rising China that would be
adverse to their interests on the other hand. Indeed, the United States is an
active player and receptive partner among Asian governments hedging in the
face of China’s rise. It hedges notably in regard to possible negative
consequences of China’s rising military, economic, and political power and
influence for US interests in Asian and world affairs.14

THE OBAMA ADMINISTRATION’S “PIVOT” AND

“REBALANCING” POLICIES

In pursuit of long-standing American goals of regional stability and balance

of power, economic development, and promotion of American values in a
progressive rules-based international order, President Barack Obama and his
senior foreign, defense, and economic administrators undertook a series of
policy initiatives—first under the rubric of the American “pivot” to Asia, and
later under the rubric of American “rebalancing” in Asia. The scope of US
efforts is broad, and the emphasis has evolved and changed over time. The
efforts take due account of the challenges noted above as they build on a
range of important strengths seen as likely to sustain US leadership in a
future order in Asia. That order will be determined in considerable measure
on how well or poorly the United States, China, and regional countries craft
policy approaches to balance sometimes competing or conflicting interests.15
Though Obama government representatives rightfully indicated that they
were focused on improving relations with Asia from the outset of their time
in office, since the autumn of 2011, the Obama administration has issued a
series of announcements and taken a series of steps to expand and intensify
the already significant role of the United States in the Asia-Pacific region.
Explicitly identifying the Asia-Pacific region as a geo-strategic priority for
the United States, the Obama administration paid a higher level of attention
to the region across a wide range of issue areas. The overall effort represented
a significant shift in US policy.16
The rebalance is not a story of US disengagement and then reengagement
in Asia. It is a matter of emphasis and priority, building on a wide-ranging
and strong foundation of US-Asia relations that was already in place. As
noted earlier, the United States has had powerful national interests in the
Asia-Pacific region since World War II and was deeply engaged in the region
—militarily, economically, and diplomatically—throughout the Cold War.
The post–Cold War administrations of presidents Bill Clinton and George W.
Bush also were actively engaged in Asia.17
The Obama administration’s policy toward the Asia-Pacific region
evolved over time and passed through two distinct phases. When the policy
was first rolled out in 2011–12, much of the emphasis was placed on the shift
or “pivot” seen in military initiatives in the region. China disapproved of
these initiatives, and Beijing took steps to demonstrate its power in maritime
territorial disputes with US allies. Then the Obama administration adjusted its
approach in late 2012, playing down the pivot and the significance of military
initiatives, emphasizing a broad set of economic and diplomatic elements
involved in an overall “rebalance” of US policy, and calling for closer US
engagement with China.18
Commentators in China and some observers elsewhere have said that the
rebalance was designed to contain China; this is a simplistic (and, in the case
of China, partially contrived) reading of the new policy. US policy makers
are certainly aware of China’s economic rise and its growing military power,
but the rebalance has been driven by a much broader set of strategic,
economic, and political considerations. Following more than a decade of war
in Afghanistan and Iraq, the Obama administration has been trying to place
more emphasis on Northeast, Southeast, and South Asia—parts of the world
that will be of growing strategic and economic importance in the first half of
the twenty-first century. In geo-strategic terms, the rebalance is the Obama
administration’s grand strategy for US foreign policy.19
The new US policy is also based on the need—widely felt throughout
most of the Asia-Pacific region—for strategic reassurance in the face of a
rising and increasingly assertive China. The rebalance is also driven by a
desire to reassure US allies, friends, and other countries in the region that the
United States has not been exhausted after a decade of war, that it has not
been weakened by economic and political problems at home, and that it is not
going to disengage from Asia-Pacific affairs.20
The fundamental goals of the new US policy are to broaden areas of
cooperation beneficial to the United States with regional states and
institutions; strengthen relations with American allies and partners, including
great powers such as China and India as well as important regional powers
such as Indonesia; and develop regional norms and rules compatible with the
international security, economic, and political order long supported by the
United States.21
The rebalance included a region-wide, multidimensional collection of
policy initiatives that placed stronger emphasis on Southeast and South Asia
to complement traditionally strong American attention to Northeast Asia.
This rebalance entailed three sets of initiatives—security, economic, and
diplomatic.
Changes in the US military force structure involved shifting substantial
military capacities from other theaters of operation to the Asia-Pacific and
restructuring US regional security arrangements to generate more widely
dispersed US forces across the region. This has included new high-profile
military deployments to Australia and the Philippines and has been
accompanied by expanded security arrangements with regional partners that
emphasize greater military integration.22
The rebalance also entails economic initiatives which aim to expand
bilateral and multilateral economic cooperation between the United States
and the region. Much of the discussion has focused on the Trans-Pacific
Partnership (TPP), the proposed free trade agreement that presently involves
the United States and eleven other countries but does not currently include
China. The Obama administration has also begun a process which will
increase the generally modest US foreign assistance to the Asia-Pacific
region by 7 percent.23
Finally, the rebalance has seen a greatly intensified level of US diplomatic
engagement in the region. US diplomatic activism has involved strengthening
US alliances, building deeper relationships with partners such as Singapore
and India, deepening engagement with multilateral institutions, and managing
the US-China relationship.24
In response to the Obama administration’s rebalancing of US-Asia
relations, Chinese government representatives and official media have voiced
measured criticism of the new US policy, especially its military aspects.
Official sources have also criticized US diplomatic activism seen in Beijing
as US support for American allies and associates that have maritime and
territorial disputes with China. In China’s burgeoning non-official media,
criticism of the rebalance and the United States has been vociferous. Some
commentators have alleged that the United States is engaged in a conspiracy
to develop a Cold War–style “containment” of China.
Significantly, the run-up to the June 2013 summit between President
Obama and newly installed Chinese president Xi Jinping coincided with
greater moderation in Chinese assessments, with Chinese officials telling
foreign visitors there were “no fundamental, structural, or irreconcilable
differences” between the two countries. Chinese military commanders noted
that, as the rebalance has evolved, Washington has been placing less
emphasis on military initiatives and less emphasis on China as a focus of US
policy. While still wary of US intentions, Chinese officials became more
positive toward US-China military cooperation than at any time during the
Obama administration.25
Almost every other regional power in Northeast, Southeast, and South
Asia holds to two positions. First, most regional powers have been publicly
or privately pleased to see the stronger US commitment to the Asia-Pacific
region. Second, regional powers are also keen to avoid having to choose
between the United States and China. They very much want to have good
relationships with both countries. A few regional powers—including
Indonesia, Thailand (a formal US ally), and Malaysia—have been “straddling
the fence” by avoiding public signs of tilting toward either the United States
or China.
The Philippines, Japan, South Korea, and Singapore have been exceptions
to the generally muted official reactions in the region; their support for a
greater US presence in the region has been quite explicit. It is not a
coincidence that the Philippines, Japan, and South Korea are embroiled in
territorial and security disputes with China. The Philippines and Japan have
been engaged in protracted, intense disputes with China, which has exerted
extraordinarily coercive diplomatic, economic, and military power in both
cases. A small and vulnerable city-state, Singapore has done more than many
US allies to embrace close strategic cooperation with what it sees as the
stabilizing influence of the United States.
Australia and New Zealand also have warmly welcomed the US rebalance,
though both have taken pains to avoid upsetting China and their important
economic ties with Beijing. Many other key countries in the region—
including India, Vietnam, and Burma—have taken significant steps to
improve relations with the United States in recent years. Although
governments in these countries have been careful to preserve their close
economic ties with China and to avoid offending the region’s largest rising
power, they have found it strategically reassuring to position themselves a
few steps closer to the world’s preeminent superpower. In the face of a rising
and increasingly assertive China, many countries in the Asia-Pacific region
have drawn on classic balance of power thinking and “rebalanced” their
positions closer to the non-threatening great power.26
The many countries that have explicitly supported or quietly embraced the
US rebalance to the Asia-Pacific have probably been motivated more by
concerns over China than by the intrinsic appeal of US policies. Although
many Chinese commentators accuse the United States of having a
containment strategy, it probably is more accurate to say that China is
engaging in self-containing behavior.
Given the rise of Asia in world affairs, the US rebalance toward Asia is a
reasonable reflection of changing geo-strategic realities. The rebalance has
more promise for advancing US interests, especially economic interests, than
US policy efforts in most other parts of the world. Given Asia’s continuing
importance in the first half of the twenty-first century, US grand strategy is
likely to continue focusing on the Asia-Pacific region after President Obama
leaves office. Nevertheless, the Obama administration continues to take care
to reassure its European allies, Russia, and powers in the Middle East that the
rebalance does not imply US disengagement from those regions. In
particular, US Secretary of State John Kerry went to extraordinary lengths
during his tenure to demonstrate deep American involvement in issues
including Syria, Egypt, and the Middle East peace process, in moves
welcomed by European and Middle Eastern nations.

AMERICAN STRENGTHS IN ASIA

The durability and success of the Obama administration’s rebalancing

initiatives in the Asia-Pacific rely fundamentally on American strengths in
the region. The brief review below of the key elements of US power and
influence in the region shows that the foundations of American regional
policy are sound. Neither a rising China nor any other power or coalition of
powers is prepared to undertake even a fraction of the leadership
responsibilities that continue to be carried out by the United States in the
Asia-Pacific region.27 At the same time, analysts need to give careful
attention to US weaknesses as well as strengths in the Asia-Pacific region. As
noted above, the policies of the George W. Bush administration were
generally unpopular with regional elites and public opinion. The United
States was seen as inattentive to regional concerns, preoccupied with wars in
Southwest Asia and the broader war on terror, and prone to unilateral actions
and crude use of military coercion in dealing with sensitive international
issues. As the Barack Obama government refocused US attention on the
Asia-Pacific region, regional concerns shifted to worry that US budget
difficulties and political gridlock in Washington seemed to undermine the
ability of the United States to sustain support for regional responsibilities.
To determine the degree of purported US decline and how this decline
impacts the Obama administration’s rebalancing, as well as China’s rising
role and other aspects of the Asian order, the discussion below provides
indicators as to whether or not the United States will sustain its leadership
roles.

• Recent practice shows that US priorities, behavior, and power mesh well
with the interests of the majority of Asia-Pacific governments that seek
legitimacy through development and nation building in an uncertain
security environment and an interdependent world economic order. As
seen in the Obama government’s rebalancing, the drivers of America
undertaking leadership responsibilities in the Asia-Pacific region remain
strong: the region is an area of ever-greater strategic and economic
importance for the United States.
• The United States remains strongly committed to long-standing US
goals of supporting stability and balance of power, sustaining smooth
economic access, and promoting US values in this increasingly
important world area.
• US leadership in Asia-Pacific arose in World War II. It has faced
repeated major challenges—often much more serious than challenges
faced today.

Of course, amid the various challenges facing US policy in Asia, notably a

widely perceived decline of the United States relative to China in regional
influence, it sometimes has been hard to discern evidence of US strengths in
the region. Several of these strengths have been discussed in the media and in
specialist and scholarly assessments, and they are duly noted below. This
assessment of US strengths also comes from private interviews conducted
with 210 Asia-Pacific affairs experts in the governments of ten Asia-Pacific
states during repeated trips to the region since 2004. The findings of these
interviews also were reinforced in public speeches, briefings, and other
interactions with audiences (amounting in total to 3,000 people) of informed
Asia-Pacific elites in these countries during the course of the author’s
repeated travel in the region since 2004.28
The basic determinants of US strength and influence in the Asia-Pacific
region involve the following factors:29

Security
In most of Asia, governments are strong, viable, and make the decisions that
determine direction in foreign affairs. Popular, elite, media, and other opinion
may influence government officials in policy toward the United States and
other countries, but in the end the officials make decisions on the basis of
their own calculus. In general, officials see their governments’ legitimacy and
success resting on nation building and economic development, which require
a stable and secure international environment. Unfortunately, Asia is seen by
regional officials as not particularly stable, and most regional governments
are privately wary of, and tend not to trust, each other. As a result, they look
to the United States to provide the security they need to pursue goals of
development and nation building in an appropriate environment. They
recognize that the US security role is very expensive and involves great risk,
including large-scale casualties if necessary, for the sake of preserving Asian
security. They also recognize that neither rising China nor any other Asian
power or coalition of powers is able or willing to undertake even a fraction of
these risks, costs, and responsibilities. Several US allies and associates in the
Asia-Pacific support the US security role through provision of monetary
support, access to bases and supplies, and defense buildups, providing greater
synergy with American forces in the region.
Looking out, a key set of indicators to monitor involves the ability of the
US government to sustain such support for security in the region. If the
United States declines, withdraws military forces, or becomes “isolationist,”
such developments are certain to lead to recalibrations by Asia-Pacific
governments on how best to secure their interests in a newly uncertain
security environment.

Economic Factors
The nation-building priority of most Asian governments depends importantly
on export-oriented growth. Chinese officials recognize this, and officials in
other Asia-Pacific countries recognize the rising importance of China in their
trade; but they also recognize that half of China’s trade is done by foreign-
invested enterprises in China, and a large portion of the trade is processing
trade—both features that make Chinese and Asian trade heavily dependent on
exports to developed countries, notably the United States. The United States
has run a massive trade deficit with China, and a total annual trade deficit
with Asia valued at over $350 billion at a time of a much larger overall US
trade deficit. Asian government officials recognize that China, which runs an
overall trade surplus, and other trading partners of Asia are unwilling and
unable to bear even a fraction of the cost of such large trade deficits, which
nonetheless are very important for Asian governments.30
The global economic crisis and downturn beginning in 2008 had an
enormous impact on trade and investment. Chinese and some other Asian
officials talked about relying more on domestic consumption—but tangible
progress seems slow. They appear determined to preserve market share and
export-oriented growth involving the United States and other world markets.
While pushing the renminbi as a global reserve currency, the Chinese
leadership still appears to give priority to stability in its continued adherence
to international economic patterns that feature the leading role of the US
dollar, strong direct and indirect US influence on foreign investors in China,
and the United States as a market of priority for Chinese products.
A key set of indicators to monitor involves the ability of the US
government to sustain such support for economic interests in the region. If
the United States declines or resorts to economic policies designed to protect
American companies at the expense of Asian exporters, such developments
are certain to lead to recalibrations by Asia-Pacific governments on how best
to secure their interests in a newly uncertain economic environment.

Government Engagement
The Obama administration inherited a US position in the Asia-Pacific
buttressed by generally effective Bush administration interaction with Asia’s
powers. It is very rare for the United States to enjoy good relations with
Japan and China at the same time, but the Bush administration carefully
managed relations with both powers effectively. It is unprecedented for the
United States to be the leading foreign power in South Asia and to sustain
close relations with both India and Pakistan, but that was the case since
relatively early in the Bush administration. And it is unprecedented for the
United States to have good relations with Beijing and Taipei at the same time,
but that situation emerged during the Bush years and strengthened with the
election of Taiwan president Ma Ying-jeou in March 2008.
The Obama government moved to build on these strengths—a series of
initiatives removed obstacles to closer US cooperation with ASEAN and
Asian regional organizations. As discussed earlier, the Obama government’s
wide-ranging engagement with regional governments and multilateral
organizations has a scope running from India to the Pacific island states. The
Obama administration’s emphasis on consultation and inclusion of
international stakeholders before coming to policy decisions on issues of
importance to Asia and the Pacific was also broadly welcomed and stands in
contrast with the previously perceived unilateralism of the US government.
Meanwhile, in recent years, the US Pacific Command (PACOM) and other
US military commands and security and intelligence organizations have been
at the edge of wide-ranging and growing US efforts to build and strengthen
webs of military and related intelligence and security relationships
throughout the region. In an overall Asian environment where the United
States remains on good terms with major powers and most other
governments, building military and other security ties through education
programs, on-site training, exercises, intelligence cooperation, and other
means enhances American influence in generally quiet but effective ways.
Another key set of indicators to monitor involves the ability of the US
government to sustain a well-balanced policy toward all of Asia’s powers,
including China. Meanwhile, the webs of US security relationships in the
region depend on continued budget support which is promised by Obama
government leaders but is not guaranteed given the continuing budget debates
in Washington.

Non-Governmental Engagement and Immigration

For much of its history, the United States exerted influence in Asia and the
Pacific much more through business, religious, media, educational, and other
interchange than through channels dependent on government leadership and
support. Active American non-government interaction with the countries of
the region continues today, putting the United States in a unique position
where the American non-government sector has such a strong and usually
positive impact on the influence the United States exerts in the region.
Meanwhile, almost fifty years of generally color-blind US immigration
policy since the ending of discriminatory US restrictions on Asian
immigration in 1965 has resulted in the influx of millions of Asia-Pacific
migrants who call America home and who interact with their countries of
origin in ways that undergird and reflect well on the American position in the
region. No other country, with the exception of Canada, has such an active
and powerfully positive channel of influence in the Asia-Pacific. The above
non-government factors have led to strong American “soft power,” attracting
generally positive reactions from Asian opinion in recent years.31
Among indicators to monitor regarding this set of factors are American
attitudes toward immigration. Should the United States restrict immigration,
or revert to the discriminatory practices against Asians seen in the past, the
result would weaken American influence in the Asia-Pacific region.

Asia-Pacific Contingency Planning and Hedging

Part of the reason for the success of US efforts to build webs of security-
related and other relationships with Asia-Pacific countries has to do with
active contingency planning by many Asia-Pacific governments. As power
relations change in the region, notably on account of China’s rise, regional
governments generally seek to work positively and pragmatically with rising
China on the one hand. On the other hand, they seek the reassurance of close
security, intelligence, and other ties with the United States in case rising
China shifts from its current avowed benign approach to one of greater
assertiveness or dominance.
Chinese assertiveness over territorial claims along its maritime frontier
rose beginning in 2009–10, prompting many Asia-Pacific governments to
reinforce their security relationships with the United States as it worked
methodically to preserve stability by dissuading China from pursuing
aggressive tendencies. The Asia-Pacific governments’ interest in closer ties
with the United States meshed well with the Obama government’s
engagement with regional governments and multilateral organizations. The
US concern to keep stability in the broad region while fostering economic
growth overlapped constructively with the priorities of the vast majority of
regional governments as they pursued their respective nation-building
agendas. North Korea remained opposed to the United States, and Myanmar
remained suspicious, at least until recently. China’s suspicions seemed
outweighed by the benefits derived from pragmatic cooperation with the
United States.
One should monitor these sets of indicators for evidence of greater
regional acceptance of America’s staying power and China’s position as a
benign and positive force in regional affairs. A change would presumably
reduce regional interest in sustaining close ties with the United States as a
potential counter to possible Chinese intimidation and coercion. Also, one
should monitor this set of indicators for signs that regional governments may
come to judge the United States as unable or unwilling to strike a proper
balance allowing regional governments to remain secure in the face of
China’s rise without causing US-China friction that destabilizes the regional
environment.

OUTLOOK AND ALTERNATIVE FUTURES

The United States remains the region’s leading power. But debate continues
over the United States’ ability to sustain security commitments, open
economic practices, and diplomatic engagement in the Asia-Pacific region.
Many governments in the region are wary of the implications of China’s rise
as they seek mutual benefit in greater economic and other interaction with
China. Some are taking concrete steps to assist the United States to provide
so-called common goods supporting regional stability and prosperity. Asia is
the world area where China has always exerted the greatest influence, but
prevailing conditions to date do not appear conducive to China’s emergence
in a dominant position in the region.
While putting aside the specter of an imminent power shift in Asia, the
fact remains that China’s rise poses serious challenges for the United States
and its interests in the region. For a long time, American officials were
deeply concerned about a potential conflict with China over Taiwan. That
danger has eased with the thaw in cross-strait relations since 2008, though the
respective Chinese and American military buildups targeted at one another
over a possible Taiwan contingency continue. The rise of Chinese cyber,
space, and nuclear weapons capabilities also continues to impinge on major
American interests in these areas.
Heading the list of challenges over the past few years has been US
concern over what to do about China’s assertiveness regarding maritime
territorial disputes, notably with US allies Japan and the Philippines. The
dangers here include the United States getting drawn into a confrontation and
possible conflict with China. US diplomacy has tried to calm the sometimes
tense situations in the East and South China seas and to move the
protagonists toward rules that would manage territorial disputes without
resort to coercion or conflict.
Looking further out, US officials—influenced in part by the opinions of
allies, associates, and others in the Asia-Pacific region—recognize that China
could become an ever more disruptive element in the region as it grows in
economic, military, and political strength. The challenge for US policy is to
formulate and follow policies that will effectively deter Chinese disruptions,
enhance areas of converging Sino-American interests and mutual
engagement, and thereby shape a regional order in line with US-backed
norms regarding the security, economic, and political developments of the
region.
An ongoing strategic challenge for the United States will be finding the
right balance between two competing sets of regional interests. On the one
hand, many countries in the region want strategic reassurance from the
United States, and they favor a robust, multidimensional US presence in the
region. On the other hand, a strong US presence will be seen by many in
Beijing as a US-led “containment” strategy directed at China. The challenge
for the United States is to provide strategic reassurance to allies, friends, and
other regional powers without provoking a strategic backlash from China.
Most regional powers will continue to seek good relations with both China
and the United States, and this will entail a second set of balancing acts.32
China will continue to be vitally important economically to many Asia-
Pacific countries—but so too will the United States continue to be important
economically and as a provider of strategic reassurance. If Beijing continues
or intensifies its assertive policies on maritime and territorial disputes, many
countries in the region are likely to favor even closer ties with Washington.
Much will depend on Beijing. China’s military power will continue to
grow in the years ahead, and this will inevitably make neighboring countries
nervous. Chinese nationalism is also on the rise. China faces a delicate
balancing act of its own: Beijing must maintain a robust rate of economic
growth, and it aspires to a greater role in Asia-Pacific affairs; but it must keep
Chinese nationalism and Chinese regional actions from triggering an even
stronger regional backlash.
If Beijing’s regional aspirations and behavior are non-hegemonic, then the
strategic prerequisites for Asia-Pacific coexistence are in place. Through
constructive engagement with their Chinese counterparts, American leaders
can demonstrate the long-term benefits Beijing would enjoy from a Chinese
regional posture that eschews egregious pressure, intimidation, and zero-sum
competition and embraces existing world norms that hold promise for
uninterrupted Chinese development.
To facilitate a positive outcome, it would be advisable to encourage
China’s participation in the TPP. Economic interdependence is not a panacea,
but it has conflict-dampening benefits. It would also be advisable to
encourage China’s involvement in more military-to-military discussions and
cooperative security endeavors with the United States. Transparency also is
not a panacea, but it too has conflict-dampening benefits. More generally, it
will be advisable to encourage China’s integration into regional and global
institutions as much as possible. US leaders may also need to construct ways
to show Chinese leaders the significant costs China will likely bear if it
insists on using its greater coercive capabilities along narrowly nationalistic
paths. The US rebalance in Asia could provide the strategic impetus and
some policy openings for a win-win outcome, but this is far from certain.
The Asia-Pacific region is changing rapidly. In this dynamic context, the
United States, China, and regional powers are all simultaneously engaged in
balancing acts, often involving both domestic and external calculations that
will shape the prospects for Asia-Pacific stability in the years ahead. The
strengths and weaknesses of the United States in Asia could change with
changing circumstances, including US policy choices. There appear to be
four plausible alternative outcomes, which are described below. Scenarios 1
and 2 are premised on substantial change in existing realities and are deemed
less likely, while scenarios 3 and 4 are more in line with existing realities and
thus are seen as more likely.
1. Decay and decline in US leadership. At one end of the spectrum is a
marked decline in the US leadership position. This could come as a result of
strong protectionist and/or isolationist sentiment in the United States,
resulting in major US barriers for Asian exports and/or large-scale
withdrawal from US defense commitments in Asia. American leaders may
choose this path, or they may be forced to adopt this approach on account of
domestic political, economic, or other pressures.
US decline in Asia also could come as a result of US inability or
unwillingness to meet major challenges from an Asian competitor or
adversary. The most likely competitor seems to be China. China has a long
record of publicly challenging the US position in Asia in the past, and a
revived Chinese stance strongly opposed to American interests regarding
Taiwan; disputed territories in the East and South China seas; alliances with
Japan and other Asian partners; or Asian multilateral groupings deciding
important security, economic, or other issues might cause the United States to
back away from past commitments rather than confront the newly assertive
China. Or the United States might judge that rather than risk a confrontation
with China, it should use negotiations to accommodate and appease the rising
power and accept a declining share of leadership on important security,
economic, and other Asian issues, even at the expense of long-standing US
commitments in Asia.
In his chapter in this volume and other writings, Hugh White argues
strongly that the United States will need to abandon its leadership position in
Asia and “accommodate” and share leadership in Asia with a rising China in
the interests of Asian stability. He notes the vague line between
accommodation and appeasement and argues that the latter would have
obvious negative consequences for Asian stability; but he also forecasts that
US efforts to sustain primacy in Asia and avoid accommodation of rising
China are likely to be very destabilizing in the longer run.33
2. Assertive US leadership. At the other end of the spectrum is an assertive
and unilateral US posture on salient trade, human rights, and/or security
issues in Asia. This approach could involve strident US advocacy of
democracy, strong retaliation against Asian trading practices deemed unfair
by the United States, and unilateral military actions to protect US interests in
free passage in such sensitive areas as the Malacca Straits or in opposition to
weapons proliferation by US adversaries. Meanwhile, the danger posed by
China’s military buildup could be met by prominent American
countermeasures including an overt American arms race involving the
buildup of US forces in Asia and other strong American military preparations
designed to meet the Chinese challenge along China’s rim or elsewhere.34
Such proposals came from some of the candidates in the Republican
presidential primaries in 2012.
 Alternative scenarios 1 and 2 would result in major and probably
disruptive changes in the prevailing order in Asia; they would force many
Asian powers that have relied on the security and economic support provided
by the United States to seek their interests in a much more uncertain regional
environment; and they would undermine US interests in preserving a
favorable balance of power and smooth economic access to Asia.
3. Drift. This alternative would involve a largely reactive US stance in the
region. US leadership would be sustained in large measure because of
prevailing strengths of the United States in the region and the unwillingness
or inability of others to bear the risks, costs, and commitments undertaken by
the United States. However, US leadership would remain preoccupied with
problems at home and in the Middle East and other foreign areas. The
American government would be unwilling or unable to translate the US
position of power into a position of authority. This generally passive US
approach would continue to miss opportunities to establish organizations and
norms supporting US security, economic, and political interests in Asia.
Emerging issues like growing Asian multilateralism, energy security, and
climate change would see the United States playing catch-up rather than
leading toward constructive outcomes.
4. Consultative engagement. This alternative follows generally along the
lines of Obama administration policy. It would involve ever greater US
attention to Asian affairs. American leaders would endeavor to use US power
and leadership in close consultation with Asian governments in order to
establish behaviors and institutions in line with long-standing American
interests.35
Listening to and accommodating wherever possible the concerns of Asian
governments would help to ensure that the decisions reached would have
ample support in the region. Building on the recent change in the prevailing
US image in Asia from a self-absorbed unilateralist to a thoughtful consensus
builder would increase further the United States’ ability to lead in ways likely
to have constructive results for American interests in the region. The priority
given to the Asia-Pacific doubtless would come at the expense of US
attention to other world regions, and ways would need to be found to meet
the continued requirements for American involvement in those regions.

NOTES
 1. Michael Yahuda, The International Politics of the Asia-Pacific (New York: Routledge, 2011),
223–68.
2. “Roundtable: Turning to the Pacific—U.S. Strategic Rebalancing toward Asia,” Asia Policy 14
(July 2012): 21–49.
3. Ashley Tellis, “Uphill Challenges: China’s Military Modernization and Asian Security,” in
Strategic Asia 2012–2013: China’s Military Challenge, ed. Ashley Tellis and Travis Tanner (Seattle,
WA: National Bureau of Asian Research, 2012), 3–26.
4. Phillip Saunders, The Rebalance to Asia: U.S.-China Relations and Regional Security
(Washington, DC: National Defense University, Institute for National Security Studies, 2013); Daniel
Russel, “Overview of U.S. Policy in the East Asia and Pacific Region” (news transcript, US
Department of State, Washington, DC, July 22, 2013); Mark E. Manyin, Stephen Daggett, Ben Dolven,
Susan V. Lawrence, Michael F. Martin, Ronald O’Rourke, and Bruce Vaughn, Pivot to the Pacific?
The Obama Administration’s ‘Rebalancing’ Toward Asia (Report R42448, Congressional Research
Service of the Library of Congress, Washington, DC, March 28, 2012); David Shambaugh, “Assessing
the U.S. Pivot to Asia,” Strategic Studies Quarterly 7, no. 2 (Summer 2013): 10–19; Robert Sutter,
Michael Brown, and Timothy Adamson, Balancing Acts: The U.S. Rebalance and Asia-Pacific Stability
(Washington, DC: Sigur Center for Asian Affairs, Elliott School of International Affairs, George
Washington University, August 2013).
5. Michael Yahuda, The International Politics of the Asia-Pacific (New York: Routledge, 2005),
242–80; US National Intelligence Council, Mapping the Global Future 2020 (Report NIC 200-13, US
National Intelligence Council, December 2004), 8–36, 38–61, 74–78, 112–14.
6. Morton Abramowitz and Stephen Bosworth, Chasing the Sun: Rethinking East Asian Policy (New
York: Century Foundation, 2006); Jonathan Pollack, ed., Asia Eyes America: Regional Perspectives on
US Asia-Pacific Strategy in the 21st Century (Washington, DC: US Government Printing Office,
2007); David Shambaugh, “China Engages Asia: Reshaping the Regional Order,” International
Security 29, no. 3 (Winter 2004/5): 64–99; David C. Kang, China Rising: Peace, Power, and Order in
East Asia (New York: Columbia University Press, 2007); Bates Gill, Rising Star: China’s New Security
Diplomacy (Washington, DC: Brookings Institution, 2007); Joshua Kurlantzick, “Pax Asia-Pacifica?
East Asian Integration and Its Implications for the United States,” Washington Quarterly 30, no. 3
(Summer 2007): 67–77.
7. Robert Sutter, The United States in Asia (Lanham, MD: Rowman & Littlefield, 2009); Alice
Lyman Miller and Richard Wich, Becoming Asia (Stanford, CA: Stanford University Press, 2011),
233–78.
8. US Department of Defense, Quadrennial Defense Review Report, 30,
http://www.defense.gov/qdr/report/report20060203.pdf.
9. Ibid.; Michael McDevitt, “The 2006 Quadrennial Defense Review and National Security
Strategy,” in Pollack, Asia Eyes America, 33–50.
10. Sutter, The United States in Asia, 154–66; Lowell Dittmer, “Assessing American Asia Policy,”
Asian Survey 47, no. 4 (July/August 2007): 521–35.
11. Evelyn Goh, “Understanding ‘Hedging’ in Asia-Pacific Security,” PacNet, no. 43 (August 31,
2007), http://www.csis.org/pacfor.
12. Evan Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” Washington
Quarterly 29, no. 1 (Winter 2005/2006): 145–67.
13. Evelyn Goh, Meeting the China Challenge: The US in Southeast Asian Regional Security
Strategies (East-West Center Washington Policy Studies 16, Washington, DC, 2005).
14. Evan Medeiros et al., Pacific Currents: The Responses of US Allies and Security Partners in East
Asia to China’s Rise (Santa Monica, CA: RAND Corporation, 2008); Robert Sutter, China’s Rise:
Implications for US Leadership in Asia (Washington, DC: East-West Center Washington, 2006), 24–
29.
15. This section is adapted from Sutter, Brown, and Adamson, Balancing Acts, 1–4; see also
Saunders, The Rebalance to Asia; and Shambaugh, “Assessing the U.S. Pivot to Asia.”
16. Russel, “Overview of U.S. Policy.”
17. Chuck Hagel, “Remarks by Secretary Hagel at the IISS Asia Security Summit, Shangri-La Hotel,
Singapore” (news transcript, US Department of Defense, Washington, DC, June 1, 2013).
18. Sutter, Brown, and Adamson, Balancing Acts, 1.
19. Ashton Carter, “The U.S. Defense Rebalance to Asia” (speech at the Center for Strategic and
International Studies, Washington, DC, April 8, 2013).
20. Saunders, The Rebalance to Asia, 4.
21. Hillary Clinton, “America’s Pacific Century,” Foreign Policy 189 (November–December 2011):
56–63.
22. Leon Panetta, “Remarks by Secretary Panetta at the IISS Asia Security Summit, Shangri-La
Hotel, Singapore” (news transcript, US Department of Defense, Washington, DC, June 2, 2012).
23. Saunders, The Rebalance to Asia, 6–7.
24. Russel, “Overview of U.S. Policy.”
25. The Chinese and other Asia-Pacific reactions are from Sutter, Brown, and Adamson, Balancing
Acts, 17–25.
26. Sutter, Brown, and Adamson, Balancing Acts, 3.
27. Robert Sutter, “Assessing China’s Rise and U.S. Influence in Asia—Growing Maturity and
Balance,” Journal of Contemporary China 19, no. 65 (June 2010): 591–604.
28. These interviews are highlighted in Robert Sutter, China’s Rise in Asia: Promises and Perils
(Lanham, MD: Rowman & Littlefield, 2005); Robert Sutter, China’s Rise and US Influence in Asia: A
Report from the Region (issue brief, Atlantic Council of the United States, Washington, DC, July
2006); Sutter, The United States in Asia; and, most recently, Robert Sutter, The Foreign Relations of
the PRC (Lanham, MD: Rowman & Littlefield, 2013), 321–26.
29. See also “China’s Rise: Evolution and Implications,” in The Far East and Australasia 2014
(London: Routledge, 2013), 3–9.
30. Wayne Morrison, China’s Economic Conditions (Report 33534, Congressional Research Service
of the Library of Congress, Washington, DC, December 4, 2012).
31. Christopher Whitney and David Shambaugh, Soft Power in Asia: Results of a 2008 Multinational
Survey of Public Opinion (Chicago: Chicago Council on Global Affairs, 2008).
32. For a full discussion of these various regional balancing efforts, see Sutter, Brown, and Adamson,
Balancing Acts, 29–30.
33. Hugh White, “In Support of Accommodation,” in Pollack, Asia Eyes America, 153–68; Hugh
White, The China Choice: Why America Should Share Power (Colling-wood, Australia: Black Inc.,
2012).
34. Aaron Friedberg, A Contest for Supremacy (New York: Norton, 2011).
35. Jeffrey Bader, Obama and China’s Rise (Washington, DC: Brookings Institution, 2011); Russel,
“Overview of U.S. Policy.”
 Chapter Five
Europe’s Role in Asia
Distant but Involved
SEBASTIAN BERSICK

The EU needs to look East. Not only in words, but also in facts.
—Herman Van Rompuy, president of the European Council1

The post-2008 global financial crisis and the European sovereign debt crisis
were both watershed events in the further development of the global political
economy and international relations in Asia. With respect to Europe’s
relations with the Asian region, the twin crises marked a material and
ideational power shift. Not only in economic terms is Europe a region in
relative decline. The still ongoing crisis of the European integration process
also erodes the EU’s credibility as a role model for regional cooperation and
integration in Asia. At the same time, region-building processes in Asia and
especially East Asia are largely hampered by a state-centered Westphalian
belief in regional order and the complex role of external actors. As a result,
bilateral relations between the People’s Republic of China and the United
States of America are considered to be the most defining relationship for the
region.2 Yet, on the political, economic, and societal levels, Europe and Asia
are closely connected (see tables 5.1–5.6).
The above-quoted statement by the president of the European Council
Herman Van Rompuy highlights the evolutionary change in Europeans’
approach toward Asia. It encapsulates the challenge that Asia’s rise poses to
Europe and raises the question of how far the European interest in Asia
corresponds with Europe’s actual presence and engagement in the Asian
region. There is no question about Asia’s economic importance to Europe.
Asia today accounts for one-third of all EU exports3 and is the EU’s second-
largest regional trading partner after the European neighborhood, followed by
the BRIC countries and NAFTA.4

Table 5.1. EU Trade and FDI with Asia (in billion €)

Table 5.2. Asia’s Trade and FDI with the EU in 2012 (in billion €)

Table 5.3. European Tourists in Asia in 2011

But one must look beyond the economic dimension. In order to analyze
the relationship between Europe and Asia, this chapter will focus on relations
between the EU and Asia nationally, institutionally, and regionally. It will
discuss the relations between countries as well as between regional actors
and, when appropriate, the role and policies of individual EU member states.

Table 5.4. Asian Tourists in Europe 2012

Table 5.5. Asian Students in the EU in 2010

Table 5.6. European Students in Asia 2010

In the 1990s most European observers of Asian affairs agreed on the

growing importance of Asia. Europe, however, was still looking to the West.
The transatlantic relationship mainly defined Europe’s view of the world as
well as its foreign policy priorities. In economic, political, security, and
cultural respects, the United States was its primary partner and ally. This is
changing. The rise of the Global South impacts the distribution patterns of
material as well as ideational factors that define the global political economy
today and increasingly in the future. The establishment of the new G-20 and
the BRICS (Brazil, Russia, India, China, South Africa) demarcates what can
be described as a shift of power from the North to the South and the Asia-
Pacific. It is the general understanding of Europeans that Europe’s future will
increasingly depend on competition and cooperation with the newly emerging
Asian powers—and especially with China.5 At the same time, the EU has
moved toward a further integration of trade and investments with the United
States in the form of a Transatlantic Trade and Investment Partnership
(TTIP). Regardless of which belief system informs the interpretation of
global politics, the question of how relations between Europe, Asia, and the
United States develop is of paramount importance for national, regional, and
global prosperity. What has become clear in recent years is that Europeans
have started developing policies and institutions that allow for a more
comprehensive linkup with Asia and its many actors.

THE EU AS AN ACTOR IN ASIA

The European institutions, the EU member states, and even national political
parties are developing strategies and policies that react to Asia’s rise—
namely the staggering economic success of newly emerging and reemerging
countries like India, Indonesia, and especially China.6 However, European
reactions to date remain incoherent. No real Asia strategy exists because the
EU is, unlike a nation-state, an incomplete and evolving global political actor.
Only in the area of trade have the EU-28 successfully overcome the
coherence and consistency problem by establishing a supranational foreign
trade policy. Despite the effort made to improve cohesion in the Common
Foreign and Security Policy (CFSP) and coordination among European
institutions in the post–Lisbon Treaty era, the CFSP is still based on
intergovernmentalism. Even though the EU spent over 5 billion euros on
development cooperation with Asia between 2007 and 2013,7 it is considered
a weak actor in Asia because of non-existent military capabilities in the
region and an undeveloped CFSP.8
The EU member states agreed to share national sovereignty and created
supranational institutions and political actors like the European Commission
(EC), the Council of the European Union, the European Parliament, and the
new European External Action Service (EEAS). Yet the EU’s
instrumentalism is still limited. Because of the prevailing national interests of
its twenty-eight member states, the resulting incoherence limits the EU’s
capacity to act in a coordinated fashion in the international sphere.9 Several
levels of interaction between Europe and Asia can be differentiated, namely
(1) relations between individual EU member states and individual Asian
countries, for example, between Germany and China; (2) relations between
the twenty-eight EU member states and individual Asian countries, for
example, the EU and India; and (3) interregional relations between the EU
and a specific group of Asian countries, for example, the ASEAN-EU
dialogue or the Asia-Europe Meeting (ASEM).
The specific institutional structure of the EU is mirrored in its relations
with Asia—the most decisive element being the intrinsic tendency of
Europeans to support regional institution-building and community-building
processes in Asia. While it was expected that the EU’s external policies
would become more coherent after the Lisbon Treaty ratification, the EU’s
relations with Asia need to be differentiated between the supranational and
intergovernmental levels. The European approach to Asia thus sets Europe’s
policies apart from other external actors’ policies in Asia.

FOREIGN POLICY WITH EU CHARACTERISTICS

The Lisbon Treaty constitutes a turning point in the EU’s foreign policy. It
entered into force on December 1, 2009, and introduced major changes such
as merging the European Community and the European Union, creating inter
alia a new multi-hatted figure, that is, the High Representative for Foreign
Affairs and Security Policy/vice president of the European Commission and
permanent chair of the Foreign Affairs Council (HR/VP). The first HR/VP is
Catherine Ashton. The Lisbon Treaty also introduced a permanent president
of the European Council, Herman Van Rompuy.10
Ashton permanently chairs several working groups in the General
Secretariat Council that deal with foreign, security, and defense policy and
crisis management. The working group in charge of Asia is called the Asia-
Oceania Working Party (COASI).11 It is to provide consistency in EU actions
and proposes joint EU positions vis-à-vis individual countries and regions in
Asia. COASI aims at identifying general political guidelines for key priorities
in the EU’s external relations. During her first year of appointment in 2009,
Ashton set up three priorities for EU external affairs: establishment of a
European External Action Service, development of deeper relations with
Europe’s neighbors, and the creation of strategic partnerships with emerging
global actors. The EEAS represents the first European diplomatic corps.12
Nonetheless, the internal structure of the EU involves a complex set of
political and bureaucratic actors and is characterized by a lack of leadership,
lack of consistency, and inadequate allocation of resources. Reasons for this
are manifold.13 First, the lack of leadership is linked to a constellation of
actors, a blurred division of responsibilities, constrained decision-making
procedures, and divided resources. Second, the EU’s sui generis identity and
organizational structure generate a lack of consistency within European
institutions. Weak inter-institutional coordination is thus reflected at all
levels. In addition, European institutions—the Commission and the
Secretariat-General Council (SGC) of the European Union—and bodies, such
as the EEAS, have different geographical and sectoral priorities. Third,
resources are unequally allocated and there is a duplication of means. The
Lisbon Treaty offered the opportunity of new resources at the EU’s disposal,
that is, the EEAS, EU delegations, and EU special representatives. The EEAS
was provided with a similar degree of budgetary autonomy as the European
Commission, but it does not have legal authority to enter into contracts
(except the ones that are for the purpose of its own functioning). Whereas the
years 2012–13 were budget-cut years, sectoral dialogue visits, working
groups, and programs with Asian partners continue to grow and expand. This
raises concerns with regard to the financial sustainability of EU actions.
Furthermore, internal dynamics influence the EU’s external
representation. The Lisbon Treaty strengthens the EU’s external action
architecture, but external representation remains ambiguous. Consequently,
the EU faces struggles on visibility and a low degree of influence in Asia.14

THE EU STRATEGY IN ASIA

The global financial crisis and the still lingering European sovereign debt
crisis have profound implications for the EU and its relations with Asia. The
latter has resulted in the EU experiencing serious internal problems that have
pushed foreign policy out of the top priority on the EU’s agenda. The crisis
has impacted the EU’s external relations and resulted in a loss of influence in
Asia.15 The EU has not yet dedicated enough time and resources to cultivate
its political relations vis-à-vis Asia.
The basis of an EU strategy for Asia was laid in the first EU East Asia
policy guidelines of 2007. The European Council revised the document and
published the current Guidelines on the EU’s Foreign and Security Policy in
East Asia in mid-2012. The EU aims to influence Asian partners in shaping
political, socioeconomic, and security matters through a process of dialogue
and negotiation—and increasingly in coordination with the United States. On
the occasion of the 2012 ASEAN Regional Forum (ARF), HR/VP Ashton
and then US Secretary of State Hillary Clinton for the first time issued a joint
statement on developments in Asia-Pacific: “Closer consultation between the
United States and European Union on Asia-Pacific issues bilaterally, and
with partners across the region, will be aimed at advancing regional security,
development, well-being, and prosperity.”16 The joint statement is further
evidence of the EU’s newly developed political will to follow US security
interests in East Asia. It shows the learning curve the Europeans have been
on since they tried to unilaterally lift the arms embargo against China in
2004–5 without prior consultation with the United States or other Asian
stakeholders.
With regard to East Asia’s security architecture, Europeans are largely
free riders that rely on the US military posture in Asia-Pacific.17 Instead of
hard security, the European agenda vis-à-vis Asia prioritizes the improvement
of economic relations, especially trade and investment.
The policy of the EU toward Asia is one of multilevel engagement, which
combines bilateral and multilateral approaches. Besides interaction on the
bilateral level, the EU and its member states seek to develop their relations in
multilateral forums like the ARF or within the Asia-Europe Meeting (ASEM)
process. Since March 2007 the EU is also an official observer of the South
Asia Association for Regional Cooperation (SAARC) and has started to
interregionalize its relations with the five Central Asian republics. The
assumption that institution building in Asia via intraregional and interregional
forums is conducive for national, regional, and global order is an inherent
element of this approach.
Within this context the EU has chosen a policy path that, by its own
account, differs from containment or balance of power strategies. It aims to
strengthen regional cooperation and the promotion of a rules-based
international system. The EU’s first High Representative for Foreign and
Security Policy, Javier Solana, has described the thinking that informs the
EU’s policy choices. According to Solana, the EU’s foreign policy vis-à-vis
Asia follows a “vision in which a system of global governance with regional
structures as its cornerstones effectively addresses trans-regional problems.”18
The EU’s policies vis-à-vis Asia are based on the normative premise that the
cooperative experience of Europe can and should become part of Asian
region-building processes. This approach to international relations and the
corresponding policy to support the development of regional structures in
Asia differs from the US approach inasmuch as the EU facilitated the
development of regional institutions in Asia even if the US was excluded.19
The United States considers Asian region-building processes with suspicion
—or even as dangerous if China is included. Seen from a regional
perspective, the so-called American pivot to Asia can be understood as a
strategy to integrate a bilateral approach and a multilateral approach in order
to prevent China from becoming the regional leader of Asia.20

THE EVOLUTION OF EU-ASIA POLICIES

Europe’s interests in Asia are driven by economic considerations. The

Europeans rediscovered Asia in the beginning of the 1990s. After the German
government had adopted its Asienkonzept in 1993, the EC produced its first
strategy paper for Asia under the title “Towards a New Asia Strategy” a year
later. It was followed in September 2001 by a new document that formulated
the following objective as a priority in EU-Asia relations: “We must focus on
strengthening the EU’s political and economic presence across the region,
and raising this to a level commensurate with the growing global weight of an
enlarged EU.”21 The EC identified six objectives on which the new strategy
was to focus:

1. to contribute to peace and security in the region;

2. to increase trade and investment flows;
 3. to support the development of poverty-stricken Asian countries;
4. to facilitate the spread of democracy, good governance, and the rule of
law, especially in China;
5. to cooperate with Asian countries in international forums on security
and global environmental issues, including terrorism, migration, and
climate change; and
6. to further the awareness of Europe in Asia.

According to the Asia Regional Strategy Paper covering the years 2007 to
2013, regional cooperation will prioritize three areas: (1) the support to
regional integration; (2) policy- and know-how-based cooperation; and (3)
the support to uprooted people.22
Whereas the EU, and Germany in particular, already in the mid-1990s
started to frame Asia in policy terms, it was only over the course of the last
ten years that the EU and its member states gradually developed a better
understanding of Asia’s increasing strategic importance to Europe’s
prosperity. Yet, different from the United States, Europe’s approach to the
region lacks any hard security-related commitments. It is only with respect to
the war in Afghanistan that the EU and its member states have been willing
to contribute in terms of hard security assets.
The EU started to engage with Asia via its European Security and Defense
Policy (ESDP), which is part of the Common Foreign and Security Policy
(CFSP). The first-ever ESDP operation in Asia was the Aceh Monitoring
Mission (AMM) in Indonesia.23 A second ESDP operation was the
deployment of a small-scale police force in Afghanistan in June 2007. The
only security agreement in which solely European and Asian state actors are
involved is the Five Power Defense Agreement of 1971, which brings
together the UK, Malaysia, Singapore, Australia, and New Zealand. The EU
is also a member of the Korean Energy Development Organization (KEDO),
which pursues the objective of a denuclearized Korean Peninsula.24
An important security initiative enhancing EU-Asian cooperation is the
area of maritime security and non-traditional threats such as counter-piracy
operations.25 The Gulf of Aden and the Western Indian Ocean, the waters
where Somali piracy occurs, are major thoroughfares of maritime trade
between Europe and Asia. In late 2008 the Europeans launched EU
NAVFOR Operation Atlanta, following up on earlier missions of individual
countries to protect World Food Program (WFP) ships. Since then a large
number of Asian and European countries have contributed to naval missions
against Somali piracy. Apart from some East and Southeast Asian navies that
had previously been active in the Western Indian Ocean, for many Asian
navies involved in counter-piracy operations in the Gulf of Aden, this was the
first time to conduct long-lasting naval operations outside of their own
region. Various Asian countries, such as China, Japan, South Korea, and
India, have maintained a continuous naval presence in the Gulf of Aden since
2009. Since then the participating navies have started to work together by
escorting ships and conducting navy exercises. In late 2013 the EU Naval
Force and Chinese navy conducted a counter-piracy exercise.26
However, vis-à-vis important security issues in the Asian theater, the EU
and its member states have not yet developed a coherent and consolidated
position or policy on Asian security. In view of this deficit and the need for a
“more developed, coherent and focused foreign and security policy in East
Asia,” the Council of the European Union in December 2007 approved, for
the first time, Guidelines on the EU’s Foreign and Security Policy in East
Asia, which were updated in 2012. Furthermore, and as a result of the
increasing importance of Asia, the EU has decided to extend its relations with
Asia into a new strategic partnership.

EUROPE’S STRATEGIC PARTNERSHIPS IN ASIA

In its 2003 security strategy, the EU stated the need to pursue its objectives
through “partnerships with key actors.” Since then the EU has been
developing strategic partnerships with the United States, Canada, Russia,
Japan, China, India, Brazil, and South Africa.27 The subsequent establishment
of three strategic partnerships in Asia, with China in 2003, India in 2004, and
Japan 2003, has already been a strong indicator of the importance of Asian
countries as compared to actors in other regions. Since 2007 also, the
relations between the two regions of Asia and Europe have been officially
depicted as a “strategic partnership.” In addition, the EU upgraded its
relations with the Republic of Korea (South Korea).

China
The EU’s China Strategy Paper for 2007–13 was drafted before the global
financial crisis hit the global economy and the EU had to face a sovereign
debt crisis starting in 2009. Three aims are central to the EU’s China policy:

1. Provide support for China’s reform program in areas covered by

sectoral dialogues, where EU experience can provide added value;
2. Assist China in her efforts to address global concerns over the
environment, energy, and climate change; and
3. Provide support for China’s human resources development.28

While the onset of the crisis had a profound impact on the world political
economy, China and the EU are among those in the center of developments,
the EU being, for example, the biggest trading partner of China. This is why
the state of the relationship has been undergoing profound changes over the
course of the last five years. Analysis of the Chinese academic and public
discourse on China-EU relations reveals that Chinese elites and the public no
longer consider the EU as “a rising power” but as “a power in relative
decline.”29 Analysis of the state of China-EU relations by European
academics complement this narrative by referring to China’s national
interests-based foreign policy behavior, which increasingly comes at the
expense of European interests.30 This reading of China-EU relations is
mirrored by discourse among the epistemic communities dealing with
Europe/EU-Asian or Europe/ EU-China affairs. During conferences the EU-
China strategic partnership is characterized as becoming increasingly “mature
and stable,” while shifting from “idealism towards pragmatism.” Europe is
asked to “take off its old glasses to view the new China.”
At the same time, official declarations emphasize the need for deepened
relations. Leaders have expressed their readiness to “redouble their joint
efforts to tackle global challenges such as the international financial and
economic crisis.”31 Global economic cooperation and governance have
become “core issues” in China-EU relations.32 In dealing with these the EU
and China can build upon an ever more broadened and institutionalized
relationship. Since diplomatic relations were established in 1975, they have
developed into a bilateral relationship that now encompasses more than fifty
dialogues and three main pillars—a high-level economic and trade dialogue
launched in 2007, a strategic dialogue (2010), and a high-level people-to-
people dialogue (2012).
Economic relations lie at the heart of this development. In 2012 the EU
became China’s major trading partner, and China was Europe’s largest source
of imports.33 Trade relations have increased more than a hundredfold, from 4
billion euros in 1978 to 428 billion euros in 2011. In 2011, 17 percent of EU
imports came from China. China is the EU’s biggest provider of
manufactured goods. Nearly 9 percent of EU exported goods in 2011 went to
China. In 2011 Europe was among the top five sources of foreign direct
investment (FDI) to China (17 billion euros) while China’s investments in
Europe have been rapidly increasing since the start of the global financial
crisis (3.1 billion euros in 2011).34 Furthermore, negotiations on an EU-China
Investment Agreement started in 2013, and the launch of a feasibility study
on an EU-China FTA is being considered by China.35
In October 2006 the EC released two new documents on EU-China
relations. The titles, “Closer Partners, Growing Responsibilities”36 and
“Competition and Partnership,” were indicative of a policy change on the
European side. Brussels started to perceive China as a strategic competitor in
the economic realm. It is in this context that the Council of Ministers has
stated in its adopted conclusions in December 2006 that the adjustment to the
“competitive challenge and driving a fair bargain with China will be the
central challenge of EU trade policy.” The council’s conclusions emphasized
that for the strategic partnership to “develop to its full potential it must be
balanced, reciprocal and mutually beneficial.”37 The demanding character of
the documents,38 and the underlying potential for conflict,39 became openly
apparent during the tenth EU-China summit in November 2007 when a joint
statement could not be agreed on. Moreover, in November 2008 China
unilaterally called off the eleventh EU-China summit because of the French
president’s meeting with the Dalai Lama.
Furthermore, the EU and China started to negotiate a partnership and
cooperation agreement (PCA) in 2007. A key objective for the EU is to
acquire better access to the Chinese market for European exporters and
investors going beyond WTO commitments.40 However, over the course of
six years the PCA negotiations have so far not made much headway. From
the very beginning of the negotiations it became apparent that Brussels has a
bigger stake in the PCA than Beijing. Old and new contested issues add to the
difficulties.
Even though former premier Wen Jiabao tried hard to convince the
Europeans to lift their arms embargo against China and grant it market
economy status (MES), he did not succeed. These two issues continue to
impact negatively on EU-China relations, and the new Chinese leadership
still needs to decide how to deal with it. From a Chinese perspective the arms
embargo symbolizes the inability and unwillingness of the EU and its
member states to act as a responsible and equal partner. In this context, the
2007 Guidelines on the EU’s Foreign and Security Policy in East Asia
marked an important change in the EU’s policy. In a highly defensive manner
the document recommends that the EU should “in consultation with all
partners, deepen its understanding of the military balance affecting the cross-
strait situation . . . and factor that assessment into the way that Member States
apply the Code of Conduct in relation to their exports to the region of
strategic and military items.”41 In 2012 the EU published an update of the
Guidelines in which the need for closer security relations with the region is
underlined. The EU is developing an interest in strengthening EU-China
cooperation in the field of defense and security policy, including regular
dialogues, promoting training exchanges, and specifically improving EU-
China cooperation on crisis management and combating piracy.42
As in the case of the arms embargo, EU member states are divided with
regard to the question of whether the EU should grant China market economy
status. The EU has, again, so far not lived up to China’s expectations. Yet
time is on China’s side. According to WTO rules, China will get MES
automatically in 2016. In the eyes of Beijing, the EU only demonstrates a
fundamental mistrust of China’s modernization.
In particular, the European sovereign debt crisis is a decisive constitutive
process in the development of Sino-EU relations. A redefinition of the overall
relationship is under way. On the one hand, China has become a crucial
supporter of the euro.43 On the other hand, Chinese leaders started to use the
leverage offered to them by the European sovereign debt crisis. Premier Wen
Jiabao linked Chinese support to EU member states with disputed issues such
as the arms embargo and MES. Beijing’s increasing assertiveness has become
most visible in the context of trade disputes. The main areas of trade that
have become disputed between China and the EU are in photovoltaic panels,
telecommunications, and beverages (in particular wine). The dispute over
solar-panel imports to the EU, a business with a volume of 21 billion euros,
threatened to escalate into a trade war following the EU’s anti-dumping and
countervailing duties probe against solar panels imported from China. In this
regard, Chinese trade action in the beverage sector was a related important
development. It demonstrated a new Chinese determination for retaliation. In
a move that surprised the European side, in June 2013 the Chinese Ministry
of Commerce (MOFCOM) started dumping and subsidy investigations on EU
wine imports to China. Facing strong resistance from several EU member
states, especially Germany, which objected to the EC’s decision to impose
taxes and the prospect of an escalation of the trade dispute that could even
include the agricultural and automotive sectors, the negotiating position of
the European Commission became weak. After nearly two months the
European and Chinese sides finally agreed on a negotiated settlement in the
photovoltaic sector.44 China immediately agreed to discuss dropping its
investigation into EU wine exporters for potential dumping activity. The case
of the photovoltaic trade dispute is so far the latest example of the EU’s
inability to speak with one voice—even in the area of trade, which is in the
competence of the European Commission.

South Korea
Diplomatic relations between the Republic of Korea (South Korea) and the
EU date back to 1953. Yet it was only in 2010 that the bilateral relationship
was upgraded to a strategic partnership. Both actors emphasize the
importance of normative, economic, and political common interests.
According to the EU, the new strategic partnership is based on a “bedrock of
shared values” like democracy, rule of law, market economy, multilateralism,
and human rights as well as on the newly developing bilateral legal
framework in the form of a free trade agreement (FTA) and a framework
agreement (FA).45
In 2011 the EU was South Korea’s third major trade partner (behind China
and Japan) and became the tenth most important trading partner of the EU.
Negotiations for an FTA started in April 2007 and were finalized in October
2010 on the occasion of the fifty EU–South Korea summit in Brussels.46 The
FTA entered into force provisionally as of July 1, 2011, and constitutes the
EU’s first FTA with an Asian country. The FTA aims at abolishing nearly all
tariffs as well as numerous non-tariff barriers. For South Korea the FTA
provides inter alia an opportunity to increase the competitiveness of its
companies in the EU market vis-à-vis other Asian countries’ companies.47 In
the EU’s case the FTA facilitates the opening of the South Korean market. It
can furthermore become an economic link to Northeast Asia’s economies,
especially China and Japan, thereby playing an important role in the recovery
of the European economy.
Politically the adoption of a new framework agreement in 2010 did set the
legal and institutional framework for the strategic partnership. The new FA
substantially describes areas of cooperation, which range from political
dialogue (e.g., summits, ministerial consultations, sectoral dialogues) to
cooperation in regional and international institutions, economic and
sustainable development, education and culture, and justice, freedom, and
security.48 Concerning global affairs, the EU and South Korea are considered
“compatible partners”49 as they share similar positions in the area of climate
change, security, development assistance, UN peacekeeping, and
denuclearization as well as the G-20 and reform of the global financial
architecture.

India
Europe is India’s major trade partner. In 2012 the EU accounted for 9.9
percent of the subcontinent’s trade, followed by the United Arab Emirates
(7.1 percent), China (6.6 percent), and the United States (5.9 percent).50 A
total of 2.2 percent of EU trade with the world is exchanged with India.51 In
2007 both actors started negotiations on a bilateral FTA. As India and the EU
share common values and a commitment to democracy, the rule of law,
human rights, and pluralism, both actors regard themselves as “natural
partners” that contribute to global stability. Institutional relations between the
EU and India are based on the 1994 Cooperation Agreement and the Joint
Political Declaration of 1993. In June 2004 the European Commission
suggested establishing an EU-India Strategic Partnership. In October 2007
the EU Council adopted its conclusions on the EU-India Strategic Partnership
and supported the elaboration of an EU-India Action Plan and a new Joint
EU-India Political Declaration.52 Both sides committed themselves to a
strengthened dialogue as strategic partners. According to the EC, the main
priority for the EU-India Strategic Partnership must be the promotion of
peace, security, and democracy in the world by using the partnership to
improve international cooperation, strengthen the economic partnership,
reform development cooperation, and deepen mutual understanding. The
implementation asks for a strategic and comprehensive approach that can
happen on the level of multilateral, bilateral, and regional cooperation. The
latter shall facilitate regional cooperation to encourage economic
development and trade among development countries and aims at, inter alia,
the negotiation of a cooperation agreement with SAARC.53
During the twelfth EU-India summit in 2012, discussions focused on the
ongoing FTA negotiations; cooperation projects in the issue areas of energy,
science, and technology; and cultural exchange, as well as on global issues
like the Doha Development Agenda and climate change.54
In 2008 the original 2005 Joint Action Plan was renewed. New activities
also focus on promoting international peace and security, economic progress
and sustainable development, research and technology, and people-to-people
and cultural exchanges.55 In addition, the “India Country Strategy Paper
2007–2013” put special focus on the areas of health and education.56
According to the strategy paper’s midterm review, good progress had been
made concerning the social sectors, while the implementation of the overall
Joint Action Plan experienced a slowdown.57 Negotiations on the EU-India
FTA have so far not been finalized.58

Japan
As a result of a common normative understanding in terms of shared values
(such as freedom, democracy, and the rule of law), the EU regards Japan as a
“close and like-minded” partner.59 In 2011 both actors started negotiating a
bilateral FTA.
The main areas of EU-Japan cooperation cover political as well as
economic relations and sectoral cooperation.60 In terms of the commercial
and trade relationship, Japan ranked as the seventh major partner of the EU
(3.4 percent) in 2012. The EU is Japan’s third trade partner (8.9 percent) after
China (18.1 percent) and the United States (11.9 percent).61
The bilateral relationship is legally based on a joint declaration from 1991
and the 2001 Action Plan for EU-Japan Cooperation, which covers a ten-year
period and expired in 2011 without a review or a subsequent document. It
consists of four basic objectives: the promotion of peace and security, the
strengthening of economic and trade links, global and societal challenges, as
well as the forging of people-to-people and cultural ties.
In addition to annual EU-Japan summits, the institutional format of the
strategic partnership includes meetings between the HR/VP and the Japanese
minister of foreign affairs; meetings of senior officials, as well as expert-level
political dialogue meetings between the EEAS and Japanese government
officials on a range of thematic issues (e.g., Eastern Europe, the Middle East,
Asia, non-proliferation, UN affairs); annual interparliamentary meetings
between the European parliament and the Japanese Diet; and dialogues on a
broad range of policy areas like the environment, trade, and science and
technology.62
The Japanese government stresses cooperation in the areas of intellectual
property rights (IPR), energy, climate change, and security in East Asia as
well as Central Asia as important areas of the EU-Japan strategic
partnership.63 In the wake of the EU’s intention to lift the arms embargo
against China, the Japanese government criticized the EU for a lack of
understanding of the “security situation in the region” and for regarding East
Asia mainly as an economic market.64 Since September 2005, a Japan-EU
Dialogue on the East Asian Security Environment has been institutionalized.
Furthermore, a similar dialogue between the EU and Japan on Central Asia
was first held in July 2006.
In May 2011 both actors set a milestone when, on the occasion of the
twentieth EU-Japan summit, they agreed to start negotiations on both an FTA
and a framework agreement.65 In addition, an agreement on science and
technology and on mutual legal assistance in criminal matters entered into
force shortly before the summit.66 The first talks on the FTA started in April
2013. After two rounds of bargaining, the agenda includes, inter alia, trade in
goods and services, IPR, and government procurement. Negotiations on a
framework agreement are ongoing as well and include political, economic,
global, and regional aspects of the bilateral relations.67

Multilateral Policies
In addition to the bilateral relations between the EU and its member states
and their Asian counterparts, Europeans and Asians also interact in
multilateral forums. One important dimension of multilateral interaction takes
place on the interregional level. The EU and Asia are connected via two main
interregional processes—namely the EU-ASEAN dialogue and the ASEM
(Asia-Europe Meeting) process. The Europeans have been facilitating
ASEAN’s intraregional cooperation for now more than thirty-five years of
joint official EU-ASEAN relations. The ASEM process in which the
European side cooperates with Southeast Asian, Northeast Asian, and South
Asian actors is complementing this policy. In so doing, the EU and its
member states had, in the middle of the 1990s, responded positively to the
interest of ASEAN countries to engage China. It was particularly the
Singaporean government that promoted this concept. The idea to form a new
Asian regional grouping that would cooperate with European counterparts
interregionally formed the conceptual framework of this approach. In 2007
the EU started to also interregionalize its relations with the five Central Asian
republics. Apart from these interregional processes the EU is also a member
of the ASEAN Regional Forum (ARF) and intends to participate in the East
Asia Summit (EAS). During Catherine Ashton’s first tour around different
Asian countries in early 2012, she pursued the development of so-called
comprehensive relations with Asian partners and participated, for the first
time, in the ARF.68

The ASEAN-EU Dialogue

The EU is ASEAN’s third-largest trade partner and its largest provider of
FDI. In the light of China’s and India’s growing integration into the world
economy and its implications for the development of a new regional and
global order, the EU emphasizes the increasing importance of a continuing
and accelerating integration process among ASEAN countries.69
Since 2005 the EU stepped up its activities in Southeast Asian affairs. Not
only have European and ASEAN countries successfully shaped and taken
part in the Aceh Monitoring Mission in Indonesia. The growing importance
that the EU attaches to Southeast Asia is demonstrated by the fact that the
Europeans on July 12, 2012, acceded to the ASEAN Treaty of Amity and
Cooperation in Southeast Asia (TAC)70 and negotiate partnership and
cooperation agreements as well as free trade agreements with individual
ASEAN countries.71 In September 2013 the EU and Singapore reached an
important step toward final approval of an FTA when the text of the
comprehensive FTA was released. Negotiations with Malaysia, Vietnam, and
Thailand are still ongoing.72 The EU, however, has not succeeded in
implementing its interregional approach to Southeast Asia so far. Plans for a
region-to-region FTA between the EU and ASEAN countries have been
postponed. It is hoped that a growing net of bilateral FTAs will eventually
add up to a regional solution.
Relations between the EU and ASEAN were initially driven by a German
interest in interregional cooperation. The then German foreign minister Hans-
Dietrich Genscher strongly promoted the idea of interregional cooperation
with ASEAN countries during his eighteen years in office. It was in
Genscher’s tradition of German and EU foreign policy vis-à-vis Southeast
Asian countries that the 2007 ASEAN-EU ministerial meeting in Nuremberg,
Germany, provided the relationship with a new dynamic as it enlarged the
EUASEAN agenda beyond economic, trade, and development issues by
agreeing to intensify political and security cooperation.73 The conference
participants in Nuremberg agreed on more intense cooperation in the spheres
of climate policy, energy security, and the fight against terrorism. As a result,
a plan of action was agreed on that was envisioned as a “master plan” to
enhance EU-ASEAN relations and support the integration of ASEAN.74 This
was supposed to transform the EU-ASEAN dialogue into “a cornerstone for
the strategic partnership between Asia and Europe.”75 Since then more
progress has been made on the bilateral level between the EU and individual
ASEAN countries, especially in the area of trade, than on the interregional
level. At the same time the EU continues to support ASEAN’s integration,
for example financially, with an amount of over 65 million euros in the
period of 2007–13. The support is expected to increase in the period of 2014–
20.76
The nineteenth EU-ASEAN ministerial meeting in Brunei Darussalam in
April 2012 thus saw a renewal of the commitments made in the Nuremberg
Declaration and agreed to closer cooperation in the areas of political/security,
economic/trade, and sociocultural affairs from 2013 to 2017.77 A further
important development for the deepening of EU-ASEAN relations was the
suspension of EU sanctions on the Myanmar (Burmese) government in 2012
and the opening of a delegation (embassy) in Yangon. In addition, EU
member states became major aid donors in the country.
Ultimately, however, the successful implementation of the Bandar Seri
Begawan Plan of Action, and thus the quality of the cooperation that was
proclaimed in Brunei, will depend on the ability of the ASEAN countries to
successfully implement their declared community-building goals. ASEAN
governments have resolved to establish a community by 2015 that will be
based on three pillars—namely, security policy, economic policy, and socio-
cultural policy. In their integration efforts the ASEAN countries have been
increasingly orienting themselves toward the EU.
The ASEM Process
The Asia-Europe Meeting (ASEM) was established in 1996 to offer heads of
state and government from Europe and Asia a platform for a free and
informal exchange of views and to allow for cooperation on an equal basis
and in consensus in order to develop common ground and common interests.
The now fifty-one members represent more than 50 percent of the world’s
GDP, up to 60 percent of world trade, and about 60 percent of the world’s
population. Since its foundation, ASEM has evolved into the central platform
for interregional cooperation between Asia and Europe. In addition to
biannual summits, over fifty meetings at minister and civil servant levels take
place in between the summits. The content of the consultations and projects
covers political and security relations, the economy, and cultural affairs and
ranges from the fight against terrorism or the facilitation of trade and
investment to the discussion of issues of faith and social policy. Furthermore
there are individual forums for parliamentarians, the business sector, and civil
society. The founding of the Asia-Europe Foundation (ASEF) in Singapore
and the formation of the Trans-Eurasia Information Network (TEIN), which
is the world’s largest research and education network connecting over 50
million researchers, are considered to be the key achievements of the ASEM
process.78
Though the ASEM process has only produced a few concrete results so
far, its comparative advantage lies in the very openness of the rules,
principles, and norms that the Asian and European actors have developed.79
ASEM is an institution that generates and manages interdependencies in a
globalizing world. The ASEM process demonstrates the demand for
governance on the inter- and intraregional level of the international system.
The utility of the ASEM process in the realm of global economic governance
became apparent when the global financial crisis set in. It was, for example,
during the ASEM summit in Beijing in October 2008 that the European
leaders successfully lobbied China to be represented in the new G-20 by the
president and not the premier. By applying a region-to-region formula, Asian
actors are expected to formulate and develop common positions and interests.
Therefore, the Asian ASEM region is not only defined by geographical
criteria but also by functional criteria. Several rounds of ASEM enlargement
have, however, aggravated problems of collective action on the regional and
interregional levels of cooperation.80
The resulting apparent lack of so-called tangible or concrete results is one
reason why the ASEM process suffers from a visibility deficit in the
European media.81 Yet research on how Europeans perceive the rise of Asia
shows that over 80 percent of a representative subset view the ASEM process
as necessary “in principle.”82 Europeans conceive of their countries’ relations
with Asia not only in merely bilateral but also multilateral terms.
During the ASEM summit in Laos in 2012, non-EU member states
(Switzerland and Norway) also joined the European ASEM delegation. This
is a new development, which shows an impact of Asian affairs on European
region-building processes. In view of Russia’s renewed interests in Asia and
especially Moscow’s energy policy vis-à-vis Central Asia, it is also important
to note that Russia has finally joined ASEM on the Asian side. The EU
thereby has lost an opportunity to engage Russia on the European side of an
essentially Eurasian institution.

Central Asia
The five Central Asian republics, Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan, and Uzbekistan, are members of the Organization for Security
and Cooperation in Europe (OSCE). Europeans and the five republics thus
nominally share the values and norms of an organization that, under the name
of the Conference for Security and Cooperation in Europe, played a pivotal
role in overcoming the Cold War.
In view of the increasing awareness of the geopolitical importance of
Central Asia, the Europeans deepened their relations with the central Asian
republics after the terrorist attacks on the United States of September 11,
2001.83 In order to facilitate the transition process of the republics toward
market economies and democratic societies, the EU supported the five
countries within the Technical Assistance for the Commonwealth of
Independent States (TACIS) program, which was replaced by the
Development Cooperation Instrument (DCI) in 2007. The DCI focuses on
poverty alleviation and the promotion of sustainable economic and social
development. In addition, democracy, good governance, the rule of law, and
human rights shall be promoted.84
In order to further increase its interaction with the five countries, the EU
adopted its first Central Asia strategy in June 2007.85 The strategy document
differentiates between bilateral and regional cooperation, and the EU will
support regional cooperation among the five countries and between the
Central Asian republics and other regions. Seventy percent of the 750 million
euros that have been earmarked in the period 2007–13 for development
assistance to Central Asia are used for bilateral support programs, of which
the fight against poverty has the highest priority. Thirty percent is spent to
support closer economic cooperation within Central Asia, as well as between
Central Asia, Southern Caucasia, and the EU.
As concluded by the Council of the European Union in June 2012, the
strategy “has proven itself and remains valid.”86 Its core objective is to
contribute to peace, democracy, and prosperity in Central Asia. The
document names the promotion of security and stability as “strategic
interests” of the Europeans in the region because (1) strategic, economic, and
political developments in the region “impact directly or indirectly on EU
interests”; (2) the EU and Central Asia are “moving closer” because of, for
example, the EU enlargement; and (3) “significant energy resources in
Central Asia and the region’s aim to diversify trade partners and supply
routes can help meet EU energy security and supply needs.”
In addition, the security aspect of the EU’s involvement in Central Asia
has become increasingly important in the course of the war in Afghanistan.87
As a result, the first EU–Central Asia High Level Security Dialogue was held
in 2013.88 According to the EU’s 2012 assessment of its strategy, progress
lies in the political dialogue, on security issues, as well as in the human rights
dialogue. Apart from a further focus on cooperation in counter-terrorism,
energy resources–related projects like the construction of a Trans-Caspian
pipeline system and the further development of the EU delegation’s network
in Central Asia form part of the EU’s Central Asia agenda.89
The underlying geopolitical considerations of the EU’s approach to
Central Asia have been voiced by the then German EU Council presidency.
Accordingly, the Europeans “have some catching up to do” as countries like
Russia, China, Japan, Turkey, and the United States are “very present” in the
region.90 The EU hopes that the oil and gas reserves in the region will
contribute to the diversification of its energy imports. Competition for the
energy resources of Central Asia is one important explanation for the political
will of the EU to increase its presence in Central Asia.91 European actors
know that especially Russia and China have a strategic advantage in the
region that results, inter alia, from the similarities of their political systems
and the willingness to support the countries without political conditions. In
the light of this structural power deficit, the overall approach of the EU aims
at promoting the political as well as economic transformation and
modernization of the region in order to overcome the political and
institutional differences between the EU and the five republics. For this
reason, the EU supports regional cooperation in Central Asia. The approach
is based on the belief in the socializing power of cooperative diplomacy and
negotiations between Europe and Central Asia—even though the actors
involved “do not share a common normative basis.”92

EUROPE AND THE NEW REGIONAL SYSTEM IN ASIA

While the EU’s relationship with Asia is becoming ever more complex, the
EU’s approach to the region is driven by an increasing understanding that a
new balance needs to be found between the Westphalian order in which Asia
still lives and the post-Westphalian order that the Europeans have
successfully constructed during the last sixty years.
Since the endorsement of the European Security Strategy in 2003, the
Europeans have sought to strengthen their bilateral relations with China,
India, Japan, and South Korea by establishing strategic partnerships. They
have furthermore substantiated their engagement by starting trade
negotiations with all Asian strategic partners except for China.
Overall, the quality of the strategic partnerships differs significantly—as
the EU, India, South Korea, and Japan share democratic values. This is not
the case with regard to the EU-China strategic partnership. Yet, with the
impact of the global financial crisis and particularly the European sovereign
debt crisis, the implications of this normative differential for the EU’s Asia
policy have changed. In 2006 the European Commission demanded that the
normative foundation of the EU-China partnership has to be “based on our
[European] values.”93 Since then, the economic and political context of EU-
China relations has fundamentally changed, and so has the normative
legitimacy of both actors.94 In the eyes of the EC, China has gained
legitimacy as Beijing behaves increasingly responsibly: “China has acted as a
driver of growth, a bridge between developing and developed economies, and
as a crucial advocate for free trade in the Doha Round Negotiations. China is
now much more than an export economy or an emerging economy. Indeed,
China is now an essential global force.”95 From this it can be inferred that the
normative differential between the political systems in Europe and China
does not hamper a further strengthening of the EU-China strategic
partnership.
However, developments on the global and regional levels of the
international system have so far worked against the EU’s regional approach
to Asia. Because of the European sovereign debt crisis, the EU is losing
credibility as a model for regional cooperation and integration in Asia. Over
the course of the last five years important modifications have been made to
the EU’s vision of its foreign policy since first formulated by Javier Solana.
As a result, the EU started to strengthen its bilateral ties with Asia relative to
its multilateral ties. The EU is following a policy of “re-bilateralization.” Its
bilateral FTAs are a result of this policy shift. Since earlier hopes to form
interregional FTAs have so far not been successful, the EU hopes that
bilateral trade integration with South Korea, Japan, India, Malaysia,
Singapore, Thailand, Vietnam, and other countries will strengthen its
competitive position in Asia. For the EU this is important because Europeans
are not a member of the Trans-Pacific Partnership (TPP), which is driven by
the United States and aims at establishing an advanced FTA in Asia-Pacific.
In sum, five developments are causing a bilateral shift in the EU’s
approach to Asia relative to the EU’s multilateral engagement vis-à-vis the
region:

1. the failing of WTO-led trade liberalization efforts in the WTO Doha

Round,
2. the increasing economic and political clout of China,
3. the fuzziness of region-building processes in Asia,
4. the European sovereign debt crisis, and
5. the Obama administration’s so-called pivot to Asia.

Time will tell how these factors play out and shape the future evolution of the
EU’s engagement with Asia. But for now Europe has never been more fully
engaged in the Asian region.

NOTES
1. Herman Van Rompuy, speech at the eighth Asia-Europe Meeting (ASEM),
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/116876.pdf (accessed June 16,
2013).
 2. For a discussion, see Sun Xuefeng, Matt Ferchen, and M. Taylor Fravel, “China in the Asia-
Pacific: A Reader,” Chinese Journal of International Politics (June 2013).
3. DG Trade, “Asia-EU Bilateral Trade and Trade with the World,” http://trade.ec.eu
ropa.eu/doclib/docs/2011/january/tradoc_147208.pdf (accessed September 28, 2013).
4. Ibid.; DG Trade, “BRIC-EU Bilateral Trade and Trade with the World,”
http://trade.ec.europa.eu/doclib/docs/2011/january/tradoc_147226.pdf (accessed September 28, 2013);
DG Trade, “NAFTA-EU Bilateral Trade and Trade with the World,”
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113487.pdf (accessed September 28,
2013).
5. See Sebastian Bersick et al., eds., Asia in the Eyes of Europe: Images of a Rising Giant (Baden-
Baden: Nomos, 2012).
6. See, for example, “Asiens Aufstieg: Herausforderung und Chance für uns” [Asia’s Rise: A
Challenge and Opportunity for Us] (strategy paper of the CDU/CSU Parliamentary Group, October 16,
2012).
7. Sebastian Bersick, “Die EU und Ostasien” [The EU and East Asia], in Die Auβenpolitik der
Europäischen Union: Zwischen interregionalem Dialog und strategischer Partnerschaft, ed. Heinz
Kramer and Annegret Bendiek (Baden-Baden: Nomos, 2012), 94–111.
8. Stephan Keukeleire and Arnout Justaert, “EU Foreign Policy and the Challenges of Structural
Diplomacy: Comprehensiveness, Coordination, Alignment and Learning” (DSEU Policy Paper 12,
February 2012), 2–8, http://dseu.lboro.ac.uk/Documents/Policy_Papers/DSEU_Policy…Paper12.pdf
(accessed September 8, 2013).
9. For a discussion of the coherence problem, see May-Britt Stumbaum, “Engaging China—United
Europe? European Foreign Policy towards China,” in European Foreign Policy in an Evolving System:
The Road towards Convergence, ed. Nicola Casarini and Costanza Musu (London: Palgrave, 2007),
57–75.
10. Peadar ó Broin et al., “The Treaty of Lisbon: A Second Look at the Institutional Innovations,”
Joint Study Center for European Policy Studies, Egmont—Royal Institute for International Relations
and European Policy Center, Brussels, September 2010, 142–46, http://www.ceps.eu/ceps/dld/3736/pdf
(accessed September 8, 2013).
11. European Council, “EU High Representative Catherine Ashton Appoints the Permanent Chairs of
Several Working Groups in the Council,” Brussels, December 22, 2010, Press Release A 273/10,
http://www.consilium.europa.eu/uedocs/cms_data/docs/press data/EN/foraff/118693.pdf (accessed
September 8, 2013).
12. European External Action Service, “Activity Report 2011,” Brussels, 2012, 6,
http://eeas.europa.eu/background/docs/20121017_eeas_aar_2011_en.pdf (accessed September 8, 2013).
13. See Mario Telò, European Union and New Regionalism: Regional Actors and Global
Governance in a Post-Hegemonic Era (Ashgate: Aldershot, 2007), 110; Charlotte Brethermon and John
Vogler, eds., The European Union as a Global Actor, 2nd ed. (New York: Routledge, 2006), 12–22.
14. See Natalia Chaban, Martin Holland, and Peter Ryan, eds., The EU through the Eyes of Asia, vol.
2, New Cases, New Findings (Singapore: World Scientific Publications, 2009).
15. See, in the case of China, Sebastian Bersick and Jörn-Carsten Gottwald, “Von wegen Zivilmacht:
10 Jahre Strategische Partnerschaft der Europäischen Union und der Volksrepublik China” [So Much
for a Civilian Power: Ten Years of Strategic Partnership between the European Union and the People’s
Republic of China], Integration, forthcoming.
16. US Department of State, “US-EU Statement on the Asia-Pacific Region,”
http://www.state.gov/r/pa/prs/ps/2012/07/194896.htm (accessed September 15, 2012).
17. Sebastian Bersick, “Die Rolle der EU in der Sicherheitsarchitektur Ostasiens” [The EU’s Role in
East Asia’s Security Architecture] (Berlin: SWP, 2009), http://www.swp-
berlin.org/fileadmin/contents/products/arbeitspapiere/Diskussionspapier_Ber_Jul09_ks.pdf (accessed
September 29, 2013).
 18. See Javier Solana, “The EU’s Strategic Partnership with Japan” (speech at Keio University,
Tokyo, April 24, 2006), ue.eu.int/ueDocs/cms_Data/docs/pressdata/EN/dis cours/89298.pdf (accessed
October 17, 2006).
19. See Sebastian Bersick, “The Impact of European and Chinese Soft Power on Regional and Global
Governance,” in The International Politics of EU-China Relations, ed. David Kerr and Liu Fei
(Oxford: Oxford University Press for the British Academy, 2007), 216–30.
20. See Sebastian Bersick and Niall Duggan, “China’s Strategic Development in the Asia-Pacific:
Challenges and Prospects,” in Strategic Yearbook 2012, ed. Bo Huldt, Tomas Ries, Pekka Sivonen, and
Camilla Huldt (Stockholm: National Defence College, 2012), 71–90.
21. Commission of the European Communities, “Europe and Asia,” http://ec.euro
pa.eu/external_relations/asia/doc/com01_469_en.pdf (accessed November 20, 2005).
22. European Commission, “Regional Programming for Asia: Strategy Document, 2007–2013,” May
31, 2007, http://ec.europa.eu/external_relations/asia/rsp/rsp_0713_en .pdf (accessed August 15, 2007).
23. The EC supported the Aceh Peace Process and spends 40 million euros on mediation, the
monitoring of the peace agreement, an EU Election Observation Mission, reintegration of ex-
combatants, and the implementation of a memorandum of understanding. See John Quigley,
“Enhancing South-East Asia’s Security: The Aceh Monitoring Mission,” in Multiregionalism and
Multilateralism: Asian-European Relations in a Global Context, ed. Sebastian Bersick, Wim Stockhof,
and Paul van der Velde (Amsterdam: Amsterdam University Press, 2006), 61–82.
24. Nicola Casarini, “The European ‘Pivot,’” in Issue Alert, ed. European Institute for Security
Studies, 1–2.
25. See Susanne Kamerling and Frans-Paul van der Putten, “Enhancing Maritime Security
Governance: European and Asian Naval Missions against Somali Piracy,” in The Asia-Europe Meeting:
Contributions to a New Global Governance Architecture from the Eighth ASEM Summit in Brussels,
ed. Sebastian Bersick and Paul van der Velde (Amsterdam: Amsterdam University Press, 2010), 134–
56.
26. European Union External Action Service, “EU Naval Force and Chinese Navy Work Together to
Ensure World Food Program Aid Ship Remains Safe from Pirates at Sea,”
http://www.eeas.europa.eu/csdp/missions-and-operations/eu-navfor-somalia/news/20130627_2_en.htm
(accessed August 28, 2013).
27. I will concentrate on relations with China and not on Taiwan (Republic of China), Hong Kong, or
Macao. With respect to Taiwan, the EU follows a “One China Policy” and does not have diplomatic
relations.
28. European Commission, “China Strategy Paper 2007–2013,”
http://eeas.europa.eu/china/csp/07_13_en.pdf (accessed September 26, 2013).
29. Chen Zhimin, “Europe as a Global Player: A View from China,” in Review of International
Affairs 20, no. 2 (2012): 7–29; Qin Yaqing, “How the European Crisis Impacts China,” in The Euro
Future Project Paper Series, November 2012, http://www.gmfus.org/wp-
content/blogs.dir/1/files_mf/1354052559Qin_EuropeanCrisisChina_Nov12.pdf (accessed July 22,
2013).
30. Nicola Casarini, ed., Brussels-Beijing: Changing the Game? (Paris: European Union Institute for
Security Studies, 2013), http://www.iss.europa.eu/publications/detail/article/brussels-beijing-changing-
the-game (accessed May 20, 2013); Jonathan Holslag, “The Elusive Axis: Assessing the EU-China
Strategic Partnership,” Journal of Common Market Studies 49, no. 2 (2011): 293–313; H. Kundnani
and Jonas Parello-Plesner, China and Germany: Why the Emerging Partnership Matters for Europe
(London: European Council on Foreign Relations, 2012); J. Fox and Francois Godement, A Power
Audit of EU-China Relations (London: European Council on Foreign Relations, 2009); Francois
Godement, Jonas Parello-Plesner, and Allan Richard, Scramble for Europe: European Council on
Foreign Relations (London: European Council on Foreign Relations, 2011); Paul Haydon, “Human
Rights and the Development of EU-China Relations: A Critical Analysis of the EU’s Normative
Power,” POLIS Journal 5 (2011); Jing Men, “The EU and China: Mismatched Partners?,” Journal of
Contemporary China 21, no. 74 (2012): 333–49.
31. Council of the European Union, Joint Press Communiqué, 15th EU-China Summit, “Towards a
Stronger EU-China Comprehensive Strategic Partnership,” Brussels, September 20, 2012, Presse 388,
http://eeas.europa.eu/china/summit/summit_docs/20120920_joint_communique_en.pdf (September 20,
2012).
32. R. de Luzenberger, “The View from the EU,” in Brussels-Beijing: Changing the Game?, ed.
Nicola Casarini (Paris: European Institute for Security Studies, 2013), 37–39,
http://www.iss.europa.eu/publications/detail/article/brussels-beijing-changing-the-game (accessed
March 10, 2013).
33. DG Trade, “China-EU Bilateral Trade and Trade with the World,”
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113366.pdf (accessed September 27,
2013).
34. Council of the European Union, “Factsheet—EU-China Summit,” http://eeas.eu
ropa.eu/china/summit/summit_docs/20120920_facts heet_en.pdf (accessed November 20, 2012).
35. Ding Qingfen, “EU Investment Talks on Horizon, Ambassador Says,” China Daily, March 8,
2013, http://www.chinadaily.com.cn/cndy/2013-03/08/content_16290018.htm (accessed September 29,
2013).
36. According to the EU, the document still characterizes the main direction of the EU-China
relationship; see European Council, “EU-China Summit 2012,”
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/132478.pdf (accessed
September 26, 2013).
37. Council of the European Union, “General Affairs and External Relations” (press release, 2,771st
Council Meeting), http://register.consilium.europa.eu/pdf/en/06/st16/st16291.en06.pdf (accessed
September 29, 2013).
38. David Shambaugh, “China-Europe Relations Get Complicated,” May 2007,
http://www.brookings.edu/research/opinions/2007/05/china-shambaugh (accessed September 29,
2013).
39. Economic points of conflict include but are not limited to resources, for example, in 2009 rare
earths (see European Commission, “EU Requests WTO Consultations with China over Export
Restrictions on Raw Materials,” Brussels, June 23, 2009, IP/09/986, http://europa.eu/rapid/press-
release_IP-09-986_en.htm?locale;eqen); in 2011 anti-subsidy tariffs against the Chinese coated fine
paper industry (see European Commission, “EU Imposes First Ever Anti-subsidy Tariffs against
Imports from China,” Brussels, May 14, 2011, IP/11/568, http://europa.eu/rapid/press-release_IP-11-
568_en.htm); and in 2013 an anti-subsidy investigation on solar panels (see European Commission,
“European Commission Continues Anti-Subsidy Investigation on Solar Panels from China without
Duties,” Brussels, August 7, 2013, IP/13/769, http://europa.eu/rapid/press-release_IP-13-769_en.htm)
(all accessed August 30, 2013).
40. The mandate of the PCA is confidential, but the case of the EU-Russia PCA sheds some light on
the related sensitivities. The current EU-Russia Partnership and Cooperation Agreement (PCA) expired
at the end of 2007. The European Parliament has repeatedly criticized the EC on its negotiations on a
new PCA, and “to accord democracy, human rights and freedom of expression fundamental importance
in any future agreement, and to ensure clear mechanisms to monitor implementation,”
http://www.futurdeleurope.parlament.gv.at/sides/getDoc.do?
type=CRE&reference=20061214&secondRef=ANN-01&language=RO&detail=H-2006-
1007&query=QUESTION (accessed May 8, 2007).
41. Council of the European Union, “Guidelines on the EU’s Foreign and Security Policy in East
Asia,” December 14, 2007, 16468/07 register.consilium.europa.eu/servlet/driver?
lang=EN&ssf=DATE…
DOCUMENT+DESC&fc=REGAISEN&srm=25&md=400&typ=Simple&cmsid=638&ff…
TITRE=East+Asia+Guidelines&ff_FT_TEXT=&ff_SOUS_COTE_MATIERE=&dd_DATE_REUNION=&rc=1&nr=3
(accessed January 3, 2008).
42. European Union, “High Representative Catherine Ashton Meets the Defense Minister of China,”
Beijing, July 10, 2012, A 320/12,
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/131658.pdf (accessed
September 26, 2013).
43. See M. Otero-Iglesias, “China, the Euro and the Reform of the International Monetary System,”
in Casarini, Brussels-Beijing: Changing the Game?, 29–36,
http://www.iss.europa.eu/publications/detail/article/brussels-beijing-changing-the-game (accessed
March 10, 2013).
44. European Commission, “Commissioner De Gucht: ‘We Found an Amicable Solution in the EU-
China Solar Panels Case That Will Lead to a New Market Equilibrium at Sustainable Prices,” Brussels,
July 27, 2013, MEMO/13/729, http://europa.eu/rapid/press-release_MEMO-13-729_en.htm (accessed
September 29, 2013).
45. Council of the European Union, “Republic of Korea–EU Summit,” Seoul, March 28, 2012, Presse
140, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/129272.pdf (accessed
August 15, 2013).
46. European Commission, “European Exporters to Benefit from Free Trade Agreement between EU
and South Korea from 1 July,” June 30, 2011, IP/11/811, http://europa.eu/rapid/press-release_IP-11-
811_en.htm (accessed August 15, 2013).
47. For the following, see Woosik Moon et al., EU-Korea Relations and the EU-Korea Free Trade
Agreement (Leuven: Centre for Global Governance Studies, 2010), 4–12.
48. http://eeas.europa.eu/korea_south/docs/framework_agreement_final_en.pdf (accessed August 15,
2013).
49. Oladiran Bello, “South Korea,” in Mapping EU Strategic Partnerships, ed. Giovanni Grevi
(Brussels: FRIDE, 2011), 40.
50. DG Trade, “India-EU Bilateral Trade and Trade with the World,”
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113390.pdf (accessed September 27,
2013).
51. Ibid.
52. Council of the European Union, “Political Declaration on the India-EU Strategic Partnership,”
Brussels, September 7, 2005, Presse 224,
http://www.consilium.europa.eu/ueDocs/cms_Data/docs/pressData/en/er/86132.pdf (accessed
September 29, 2013).
53. Commission of the European Communities, “An EU-India Strategic Partnership,” Commission
Staff Working Document, Annex to the Communication from the Commission, Brussels, June 16,
2004, COM(2004) 430 final, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?
uri=COM:2004:0430:FIN:EN:PDF (accessed September 29, 2013).
54. “India-European Union Joint Statement,” New Delhi, February 10, 2012,
http://eeas.europa.eu/india/sum02_12/docs/20120210_joint_statement_en.pdf (accessed September 27,
2013).
55. “The EU-India Joint Action Plan,” Marseille, September 29, 2008,
http://www.eeas.europa.eu/india/sum09_08/joint_action_plan…2008_en.pdf (accessed September 27,
2013).
56. “India Country Strategy Paper 2007–2013,” http://www.eeas.europa.eu/india/csp/07_13_en.pdf
(accessed September 27, 2013).
57. “India Country Strategy Paper 2007–2013: Mid-Term Review April 2010,”
http://www.eeas.europa.eu/india/csp/11_13_mtr_en.pdf (accessed September 27, 2013).
58. European Commission, “The EU’s Free Trade Agreements—Where Are We?,” Brussels, August
1, 2013, MEMO/13/734, http://europa.eu/rapid/press-release_MEMO-13-734_en.htm (accessed
September 27, 2013).
59. European Commission, “EU and Japan to Discuss Climate Change, Economic Crisis and Other
Global Challenges,” Brussels, April 30, 2009, IP/09/692, http://europa.eu/rapid/press-release_IP-09-
692_en.htm?locale=en (accessed September 27, 2013).
60. Axel Berkofsky, The EU and Japan: A Partnership in the Making (Brussels: EPC, 2007),
http://se2.isn.ch/serviceengine/FileContent?service=IDESDP&fileid=1877836F-3284-31AD-8879-
B75076749F49&lng=en (accessed March 22, 2007).
61. DG Trade, “Japan-EU Bilateral Trade and Trade with the World,”
http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113403.pdf (accessed September 27,
2013).
62. European Union External Action, “EU-Japan: Overall Relationship,”
http://eeas.europa.eu/japan/relationship_en.htm (accessed September 27, 2013).
63. Takekazu Kawamura, “The EU and Japan as Strategic Partners” (speech by the Ambassador of
Japan to the European Union at the Trans European Policy Studies Association [TEPSA] International
Conference, Brussels, November 27, 2006), http://www.eu.emb-
japan.go.jp/former%20amb%20speeches/tepsa_speech.html (accessed September 29, 2013).
64. Kawamura, “The EU and Japan as Strategic Partners.”
65. European Council, “20th EU-Japan Summit,” Brussels, May 28, 2011, Presse 162,
http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/122303.pdf (accessed
September 27, 2013).
66. Cf. Delegation of the European Union to Japan, “Major Bilateral Agreements,”
http://www.euinjapan.jp/en/relation/agreement (accessed September 27, 2013).
67. European Council, “20th EU-Japan Summit,” Presse 162.
68. Patryk Pawlak and Eleni Ekmektsioglou, “Can the EU Be Relevant for Asia?,” June 11, 2012,
http://thediplomat.com/new-leaders-forum/2012/06/11/can-eu-be-relevant-for-asia (accessed September
8, 2013).
69. Sebastian Bersick and Paul Pasch, “Compass 2020: Germany in International Relations—Goals,
Instruments, Perspectives: Southeast Asia,” in The Future of German Foreign Relations, ed. Friedrich-
Ebert-Stiftung (Berlin: Friedrich Ebert Stiftung, 2007), http://library.fes.de/pdf-files/iez/05001.pdf
(accessed January 30, 2008).
70. Council of the European Union, “The EU Accedes to Treaty of Amity and Cooperation in
Southeast Asia,” Phnom Penh, July 12, 2012, A327/12,
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/131708.pdf (accessed
September 26, 2013).
71. For more information, see European Commission, “The EU’s Bilateral Trade and Investment
Agreements—Where Are We?,” Brussels, August 1, 2013, MEMO,
http://trade.ec.europa.eu/doclib/docs/2012/november/tradoc_150129.pdf (accessed September 1, 2013).
72. European Commission, “The EU’s Free Trade Agreements—Where Are We?,” Brussels, June 18,
2013, MEMO/13/576, http://europa.eu/rapid/press-release_MEMO-13-576_en.htm (accessed
September 26, 2013).
73. Javier Solana, “Opening Statement by EU High Representative Javier Solana at the ASEAN-EU
Post Ministerial Conference, Manila, August 1, 2007,” European Commission, Brussels, 2007,
S227/07.
74. The plan of action lists common projects in the area of political and security cooperation, for
example the EU/EC’s accession to the TAC once ASEAN has completed the necessary legal
procedures, and of economic as well as sociocultural cooperation. See “Plan of Action to Implement the
Nuremberg Declaration on an EU-ASEAN Enhanced Partnership,” http://www.aseansec.org/21122.pdf
(accessed December 6, 2007).
75. “16th EU-ASEAN Ministerial Meeting, Joint Co-Chairmen’s Statement,” paragraph 2.
76. European External Action Service, “The EU-ASEAN Relationship in Twenty Facts and Figures,”
http://eeas.europa.eu/asean/docs/key_facts_figures_eu_asean_en.pdf (accessed September 15, 2013).
77. Council of the European Union, “Plan of Action to Strengthen the ASEAN-EU Enhanced
Partnership (2013–2017),”
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/129884.pdf (accessed
September 26, 2013).
78. European Union External Action, “EU Involvement in ASEM”; Research and Education
Network, “TEIN3,” http://www.tein3.net/Pages/home.aspx (accessed September 26, 2013).
79. For the following, see Sebastian Bersick, Auf dem Weg in eine neue Weltordnung? Zur Politik der
interregionalen Beziehungen am Beispiel des ASEM-Prozesses [Toward a New World Order? On the
Politics of Interregional Relations: The Example of the ASEM Process] (Baden-Baden: Nomos, 2004),
41–52.
80. Sebastian Bersick and Paul van der Velde, eds., “The Asia-Europe Meeting: Contributions to a
New Global Governance Architecture,” in The Asia-Europe Meeting: Contributing to a New Global
Governance Architecture—the Eighth ASEM Summit in Brussels (2010), ed. Sebastian Bersick and Paul
van der Velde (Amsterdam: Amsterdam University Press, 2011), 15–22.
81. Sebastian Bersick and Tanja Bauer, “Perception and ASEM Visibility in the European Media,” in
The Asia-Europe Meeting: Contributing to a New Global Governance Architecture—the Eighth ASEM
Summit in Brussels (2010), ed. Sebastian Bersick and Paul van der Velde (Amsterdam: Amsterdam
University Press, 2011), 71–83.
82. Bersick et al., Asia in the Eyes of Europe.
83. Andrea Schmitz, “Eine politische Strategie für Zentralasien” [A Political Strategy for Central
Asia], in Aufgaben und Chancen der deutschen Ratspräsidentschaft (Berlin: SWP, 2006), 41–44.
84. European Commission for Development and Cooperation, “Europeaid: Regional Cooperation in
Central Asia,” http://ec.europa.eu/europeaid/where/asia/regional-cooperation-central-asia/index_en.htm
(accessed September 26, 2013).
85. “The EU and Central Asia: Strategy for a New Partnership,” http://www.auswaer tiges-
amt.de/diplo/en/Europa/Aussenpolitik/Regionalabkommen/EU-CentralAsia-Strategy.pdf (accessed July
30, 2007).
86. Council of the European Union, “Council Conclusions on Central Asia,” Luxembourg, June 25,
2012, http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/131149.pdf
(accessed September 27, 2013).
87. Council of the European Union, “Joint Progress Report by the Council and the European
Commission to the European Council on the implementation of the EU Central Asia Strategy,”
Brussels, June 28, 2010, 11402/10,
http://register.consilium.europa.eu/pdf/en/10/st11/st11402.en10.pdf#page=2 (accessed September 27,
2013).
88. European Union, “EU-Central Asia High Level Security Dialogue,” Brussels, June 13, 2013,
A315/13, http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/137463.pdf
(accessed September 27, 2013).
89. Council of the European Union, “Progress Report on the Implementation of the EU Strategy for
Central Asia—Implementation Review and Outline for Future Orientation,” Brussels, June 20, 2012,
11455/12, http://eeas.europa.eu/delegations/uzbekistan/documents/press_corner/20120620_en.pdf
(accessed September 27, 2013).
90. “EU Outlines New Central Asia Strategy,” April 24, 2007,
http://www.euractiv.com/en/enlargement/eu-outlines-new-central-asia-strategy/article-163327
(accessed April 24, 2007).
91. Andrea Schmitz, “Interessen, Instrumente, Einflussgrenzen. Die Europäische Union und
Zentralasien” [Interests, Instruments, Spheres of Influence: The European Union and Central Asia],
Osteuropa 57 (August/September 2007): 327–38; Council of the European Union, “Progress Report on
the Implementation of the EU Strategy for Central Asia—Implementation Review and Outline for
Future Orientation,” Brussels, June 20, 2012, 11455/12,
http://eeas.europa.eu/delegations/uzbekistan/documents/press_corner/20120620_en.pdf (accessed
September 27, 2013).
92. Schmitz, “Interessen, Instrumente, Einflussgrenzen,” 337.
93. European Commission, “EU-China: Closer Partners, Growing Responsibilities,” October 2006,
eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0631en01.pdf (accessed October 16, 2006).
94. See Sebastian Bersick and Jörn-Carsten Gottwald, “Von wegen Zivilmacht,” Integration,
forthcoming.
95. Jose Manuel Barroso, “Statement Following the 14th EU-China Summit,” Beijing, February 14,
2012, SPEECH/12/94, http://eeas.europa.eu/china/summit/summit_docs/120214_jmb_speech_14th…
summit_press_conf_en.pdf (accessed September 29, 2013).
 Part Four
REGIONAL POWERS
 Chapter Six
China’s Role in Asia
Attractive or Assertive?
PHILLIP C. SAUNDERS

After decades of exerting only modest regional influence, China now plays
an active and important role in Asia. Market-oriented economic reforms and
China’s subsequent integration into regional and global production networks
have produced thirty-five years of rapid economic growth that have
dramatically increased China’s national power. Aggressive Chinese behavior
toward Taiwan and in the South China Sea from 1994 to 1996 created alarm
about a “China threat,” but more restrained behavior and assurance measures
adopted over the period from 1997 to 2008 helped to ease regional concerns
about a stronger China. During this period, Asian views largely shifted from
regarding China as a potential threat to regarding China as an opportunity;
this shift was widely interpreted as an indicator of the success of China’s
Asia policy.1 Beginning in 2009, however, more “assertive” Chinese behavior
on maritime territorial disputes and other issues dissipated much of the
goodwill built by China’s charm offensive and revived regional concerns
about how a strong China might behave.2
This chapter examines China’s Asia strategy, the sources of Chinese
power and influence, and the assurance measures Beijing has employed to try
to reconcile the region to a dominant Chinese regional role without
antagonizing the United States or destabilizing the region. It considers the
impact of China’s more assertive recent behavior on the regional security
environment and discusses how Chinese leaders have adapted their Asia
policy in light of the new circumstances. Chinese leaders will have to strike a
balance between restrained policies to preserve a stable regional security
environment and the desire to use China’s new power to make progress on
long-standing territorial disputes. The conclusion considers key variables and
potential developments that might alter China’s regional policy.

CHINA’S ASIA STRATEGY

China’s regional strategy derives in part from its global grand strategy.3 The
top domestic concern of Chinese leaders is maintaining political stability and
ensuring the continued rule of the Chinese Communist Party (CCP). CCP
leaders have tried to build new sources of political support by raising living
standards through rapid economic growth and by appealing to nationalist
sentiment.4 Throughout the reform era, Chinese leaders have focused on
maintaining a stable international environment that supports economic
modernization. This objective requires China to avoid a hostile relationship
with the United States, the dominant power in the current international
system. Given the high costs of confrontation, Beijing seeks stable,
cooperative relations with Washington. Yet many Chinese elites believe that
the United States seeks to subvert the Chinese political system and to contain
China’s economic and military potential. China therefore seeks to build
positive relationships with current and potential great powers to facilitate the
emergence of a multipolar world order and to deny the United States the
opportunity to construct a coalition to contain China and prevent its
continued rise.5 By properly managing relations with the United States, other
great powers, and developing countries, Chinese leaders hope to take
advantage of a “period of strategic opportunity” in the first two decades of
the twenty-first century to build China’s comprehensive national power and
improve China’s international position.
This grand strategy defines the international and domestic context in
which China formulates and pursues its Asia policy. Asia is the most
important region of the world to China in economic, security, and political
terms. It serves as a source of raw materials; as a supplier of components,
technology, and management expertise for production networks operating in
China; and as a market for finished Chinese products. The Asia-Pacific
region is the most important destination for Chinese exports and for Chinese
direct investment. Investment from other Asian countries played a critical
role in fueling China’s economic takeoff and export boom. Much of China’s
economic success can be attributed to the operations of multinational
companies that import components from Asia, assemble goods using Chinese
workers, and export the finished products to markets in the United States,
Europe, and elsewhere. Approximately 50 percent of Chinese exports are
produced by foreign-owned or foreign-invested companies, with the figure
rising as high as 80 percent in sophisticated sectors such as electronics.6
China’s economic growth has produced increasing dependence on oil
imported from the Middle East and Africa and on secure sea lanes to support
its maritime trade. Most of this traffic passes through Asian waters, including
through potential choke points such as the Strait of Malacca.
Geography also makes Asia critically important to China from a security
perspective.7 China shares land borders with fourteen East Asian, South
Asian, and Central Asian countries. Chinese leaders worry that neighboring
countries could serve as bases for subversion or for military efforts to contain
China. This is of particular concern because much of China’s ethnic minority
population, which Chinese leaders view as a potential separatist threat, lives
in sparsely populated border regions such as Xinjiang and Tibet. Chinese
concerns about threats posed by “terrorism, separatism, and religious
extremism” have prompted increased efforts at security cooperation with its
Central Asian and South Asian neighbors. China’s unresolved territorial
claims are all in Asia, including claims to the Spratly Islands and the South
China Sea, the Diaoyu/Senkaku Islands and parts of the East China Sea, a
disputed land border with India, and China’s self-described “core interest” in
unification with Taiwan. China also worries about the possibility of
encirclement and threats from conventional military forces based on its
periphery. In the 1960s, the United States had significant military forces
based on Taiwan, the Philippines, Japan, South Korea, and Thailand, all
within striking distance of Chinese territory. Chinese strategists are highly
sensitive to recent US actions to improve its military power projection
capability in the Pacific and the possibility that US alliances in Asia might
someday be turned against China, concerns that have strengthened with the
US “rebalance to Asia.”8
Asia is also important politically. The broader Asia-Pacific region is home
to major powers such as China, Japan, and India and to advanced economies
such as Korea and Singapore. East Asia alone houses 31 percent of the
world’s population and produces about 28 percent of global GDP.9 If Asia
were able to act collectively, it could rival the geopolitical weight of North
America and Europe. Asia has historically lacked the web of regional
institutions that produced economic and security cooperation in Europe and
which supported the regional integration process that led to the creation of
the European Union. The political, ethnic, and cultural diversity of the region
and the tendency of Asian states to jealously guard their sovereignty have
impeded the creation of strong regional institutions. Over the last fifteen
years, new regional institutions have emerged to promote regional
cooperation between Asian states in the economic, security, and political
domains. A robust set of non-governmental organizations and people-to-
people contacts have also emerged at the societal level. Some see these
processes as promoting greater regional integration, which would greatly alter
the political dynamics in Asia. China has a strong stake in influencing the
political evolution of the region in ways that advance Chinese interests, and
in blocking developments that might work against Chinese goals.
China’s preferred outcome is a stable environment in Asia that permits
rapid Chinese economic growth to continue and supports increased Chinese
regional influence. Many Western analysts believe that China’s ultimate (but
unstated) goal is to eventually displace the United States as the dominant
power in Asia.10 Chinese officials and analysts acknowledge that the US role
in supporting regional stability and protecting sea lanes of communication
makes a significant contribution to regional stability and supports Chinese
interests. The US security alliance with Japan also exerts a degree of restraint
on Tokyo, although Chinese analysts believe this restraining influence has
been reduced in recent years with the transformation of the alliance, the
easing of constitutional and legal constraints on Japanese military activities,
and the election of right-wing Japanese governments such as that of Prime
Minister Shinzo Abe. The potential for US power and alliances to be turned
against China makes Chinese analysts uneasy at the prospect of an enduring
American security role in the region. China disclaims any desire to dominate
Asia, declaring that it will never seek hegemony and talking about
cooperation on the basis of equality, mutual respect, and non-interference in
the internal affairs of other nations. But Chinese elites also appear to expect
that weaker countries will defer to Chinese wishes as the country grows more
powerful.11 In formulating Asia policy, Chinese leaders must manage the
tensions between official foreign policy principles and a foreign policy firmly
grounded in realpolitik concerns. Chinese leaders are acutely sensitive to
trends in the global and regional balance of power, which are closely
monitored by Chinese intelligence agencies and research institutes.
Chinese leaders are aware that China’s increasing economic and military
power is viewed as a potential threat by other countries in the region.12 This
wariness partly reflects the legacy of earlier support for communist parties
and national liberation movements in Asian countries. Beijing ended such
ideologically based support by the early 1980s, but Asian countries have
residual concerns that China could build relationships with their ethnic
Chinese citizens that could undermine their sovereignty. Asian countries also
worry about China’s potential to use coercion and force to resolve territorial
disputes and to employ its superior power against smaller and weaker
countries in Asia using “divide-and-conquer” tactics.
China’s strategic dilemma is finding a way to reconcile the rest of Asia to
a dominant Chinese regional role without antagonizing the United States or
destabilizing the region. This task is greatly complicated by China’s claims to
territories it does not currently control. Chinese actions to “safeguard
sovereignty and territorial integrity” are viewed by neighboring states as
efforts to use intimidation and the threat of force to strengthen Chinese
territorial claims. Beijing would greatly prefer to resolve the Taiwan issue
peacefully but has refused to rule out the use of force. China’s military is
developing capabilities that could be used to coerce Taiwan (including efforts
to deter and raise the costs of US military intervention), but which could also
be used in other territorial disputes. The need to preserve a peaceful regional
environment for economic development—a necessity for internal stability—
is thus in tension with the desire to use China’s newfound power to achieve
nationalist territorial goals at the expense of China’s neighbors. Efforts to
manage these tensions in China’s Asia policy are further complicated by the
US rebalance to Asia, which has altered regional strategic dynamics and
increased US-China competition for regional influence.

SOURCES OF CHINESE POWER IN ASIA

Economic Power
China’s rapid economic growth, and the increasing economic ties with Asia
that it has produced, is the most important source of China’s power and
influence in Asia. Chinese officials regularly use free trade agreements, trade-
facilitation agreements, and non-binding bilateral trade targets to leverage
access to China’s market as a diplomatic tool in bilateral relations. One
important pattern in China’s trade relations is that other East Asian countries
are becoming more dependent on exports to China, but China’s relative
dependence on East Asian markets is staying the same. The volume of
Chinese trade with East Asia has increased dramatically over the last decade,
but the share of Chinese exports going to East Asia (excluding Hong Kong)
has declined from 34 percent in 1996 to 21 percent in 2012.13 Conversely,
China has become the first- or second-largest trading partner of almost every
country in the region since the turn of the millennium (see tables 6.1 and 6.2).
Despite periodic political tensions, Japan’s trade with China now exceeds
Japan’s trade with all ten members of the Association of Southeast Asian
Nations (ASEAN) and surpassed US-Japan trade levels in 2007. ASEAN
exports to China have grown rapidly in recent years; China is now the second
most important export market for ASEAN products.
These changes in Asian dependence on the Chinese market reflect both the
shift of export production from other East Asian economies to tap
inexpensive Chinese labor and the Chinese domestic market’s appetite for
imports from Asia. Chinese leaders and analysts believe that trade
dependence can generate significant political influence as groups that benefit
from trade with China mobilize to protect their economic interests. In recent
years, China has shown a greater willingness to use economic coercion
against other Asian countries over political or territorial disputes.14 This tactic
has produced alarm among foreign business groups but has not necessarily
produced the desired outcomes. For example, Japanese business groups have
called for better Sino-Japanese relations, but their influence has not
outweighed other Japanese voices seeking a tougher policy toward China.

Table 6.1. Percentage of Imports from China (China’s Rank as Import

Source)
 China has also emerged as a significant source of foreign direct
investment in Asia, which is the most important destination for Chinese FDI.
Chinese statistics indicate that Chinese enterprises have invested at least $55
billion in East Asia as of 2012, while Chinese investment in ASEAN passed
$10 billion in 2011.15 This investment makes a significant contribution to
Southeast Asian economies.
China’s foreign aid is also significant. China does not publish a detailed
breakout of its foreign aid programs, but poorer countries in Southeast Asia
and Central Asia are significant recipients of Chinese development
assistance.16 Much of this assistance goes to improve transportation
infrastructure connecting Southeast Asian and Central Asian countries to
China. This infrastructure contributes to these countries’ economic
development, but it also links them more closely to the Chinese economy and
will produce greater trade dependence in the future.17 China’s role as a
production site in regional production networks serves as an important link
between Asian producers of capital goods and production inputs and
developed country markets in the United States and Europe. This ties
together the economic interests of Asian companies and countries in a
positive-sum manner.

Table 6.2. Percentage of Exports to China (China’s Rank as Export

Market)
Military Power
China’s military, the People’s Liberation Army (PLA), is also becoming a
more effective policy tool, both in terms of its combat potential and its role in
security cooperation. The PLA has historically been a large land force with
very limited ability to project and sustain power beyond China’s borders.
China’s military power has increased significantly over the last decade,
creating both newfound respect and heightened concerns in other Asian
countries.18 The “three pillars” of PLA reform and modernization include (1)
development, procurement, and fielding of new weapons systems and
capabilities; (2) institutional and systemic reforms to improve the
professionalism and quality of Chinese military personnel; and (3)
development of new war-fighting doctrines for employing these new
capabilities.19 China’s military modernization has been supported by
significant increases in defense spending, with the PLA receiving double-
digit real budget increases every year since 1997. The official 2013 defense
budget is approximately $114 billion, but Stockholm International Peace
Research Institute (SIPRI) estimates that include military-related and off-
budget spending suggest that the total may have been about 1.5 times the
official budget, or $166 billion.20 This funding has underwritten higher
salaries, expanded training and facilities, and the development and
acquisition of advanced indigenous and Russian arms.
Many of the new weapons systems the PLA is acquiring appear to be
focused primarily on deterring Taiwan independence and on deterring or
delaying possible US intervention. These include development of more
accurate short-range and medium-range conventional ballistic missiles,
acquisition of Russian Kilo-class submarines and Sovremenny destroyers and
development of an anti-ship ballistic missile that can target US aircraft
carriers, modernization of China’s strategic nuclear arsenal, and deployment
of anti-ship and land-attack cruise missiles. Chinese military strategists are
exploring tactics such as attacks on US military computer systems and space
assets as means of deterring or delaying the arrival of US military forces in
the event of a Taiwan crisis. China’s January 2007 test of a direct-ascent anti-
satellite weapon illustrates one aspect of these efforts. To the extent that these
“anti-access strategies” are actually able to hold US military forces in the
Western Pacific at risk, they may begin to shift regional perceptions of the
military balance of power in Asia.21
Some of the new military capabilities China is developing will
significantly expand the PLA’s ability to project power within Asia. In
addition to the capabilities listed above, China is also deploying tankers and
air-refueling technology that will extend the range of Chinese fighters. The
PLA is improving the capabilities of its airborne and amphibious forces
capable of expeditionary operations and making efforts to improve its airlift
and sealift capability. China has refurbished a Soviet-era Ukrainian aircraft
carrier, now commissioned as the training carrier Liaoning, and is expected to
build an indigenously designed carrier in the future. The PLA already
performs some power projection missions such as responding to natural
disasters, contributing to deterrence, and enhancing regional stability.
Although lack of overseas bases constrains PLA power projection capability,
the PLA is increasing its “presence deployments” through naval visits and
port calls and participation in joint and combined military exercises with
other militaries.22 China also has extensive naval paramilitary forces that
nominally handle tasks such as maritime surveillance and enforcing fishing
laws, but which have been used regularly to reinforce China’s maritime
claims.23

“Soft Power”
China is also seeking to expand its “soft power,” defined as China’s ability to
persuade others to pursue its goals and values or to emulate its behavior. One
important trend is increasing contact between Chinese citizens and people in
other Asian countries. Flows of tourists and students between China and
other Asian countries have increased dramatically in recent years as China
has loosened restrictions on overseas travel. Chinese tourists have flocked to
Asia, with about 4 million visiting other East Asian countries in 2012.24 Many
Chinese tourists visit Asian countries as part of large tour groups, which do
not always leave positive impressions on their hosts. Educational contacts
between China and Asia have also increased significantly. China sent about
240,000 students to Asia-Pacific countries in 2010 and hosted more than
160,000 students from the region in 2012, with South Korea and Japan
sending the most.25 The Chinese government has supplemented student
exchanges by establishing “Confucius Institutes” in foreign countries to teach
Chinese language and promote Chinese culture. As of 2012 ten East Asian
countries and India hosted some sixty-three Confucius Institutes, with
Thailand, South Korea, and Japan hosting at least ten apiece.26
The Chinese government also actively supports the participation of
Chinese scholars and experts in academic and unofficial “Track II” policy
conferences in Asia. Much of this activity occurs via Chinese government
think tanks or government-operated non-governmental organizations
(GONGOs) created to interact with foreign non-government organizations.
The Chinese government has sought to increase contacts between Chinese
and East Asian think tanks— and to exert some degree of control over the
regional agenda—by providing financial and organizational support for
participation of Chinese experts and by sponsoring the establishment of the
Network of East Asian Think-Tanks (NEAT), which includes members from
all the ASEAN 3 countries.27 Chinese scholars and experts increasingly have
the language skills and expertise to function effectively in these types of
meetings. However, the perception that Chinese participants often deliver
approved government talking points and cannot fully express their individual
viewpoints probably limits their influence.
Appeals to cultural and linguistic affinities have been important in dealing
with countries with significant ethnic Chinese minorities. Malaysia and
Indonesia, which previously viewed their ethnic Chinese populations with
considerable suspicion, now regard them as an asset in building economic
relations with China. Beijing found some sympathy in Southeast Asia for
appeals to “Asian values” during its efforts to resist Western human rights
pressure in the 1990s, but this has been tempered by the deepening of
democracy in Japan, South Korea, Taiwan, and some Southeast Asian
countries. Cultural and linguistic diversity in Asia is likely to limit China’s
ability to harness purported common “Confucian values” as a diplomatic tool.
Few Asian elites are attracted to Chinese values or desire to emulate China’s
system of government.28
In the cultural sphere, talented China artists are beginning to win regional
and international recognition. Some Chinese cultural products reflect
traditional Chinese culture in ways that resonate within East Asia, but most
have limited appeal due to their focus on Chinese domestic concerns, their
derivative nature, political constraints on content, and language barriers.
Films have arguably been China’s most successful cultural exports. Some of
these constraints may ease as China becomes richer, but for now other Asian
countries are producing work with more regional impact and influence. It is
worth noting that many of the most successful Chinese artists achieved their
fame with work done outside China, including Nobel Prize–winning novelist
Gao Xingjian.
Chinese companies have sought, with limited success, to build
internationally recognized brand names. Haier (refrigerators) and Huawei
(routers and communications products) have been most successful. However,
most Chinese products compete on the basis of price rather than quality.
Nevertheless, if goods are cheap enough, Chinese products can promote a
positive image. For example, Chinese motorcycles that sell at about a quarter
of the price of those produced in Japanese-owned factories in Thailand have
become affordable for poor villagers in Laos. The resulting access to
transportation has literally saved lives and has had a major improvement in
the quality of life for Laotian villagers in remote areas.29
Many Asian elites look at China’s economic success with envy and
admiration. The pace of construction in China’s major cities—and the
number of architecturally ambitious new buildings in Beijing and Shanghai—
is striking. Beijing built an impressive set of facilities and infrastructure
improvements to support the 2008 Olympics. China’s manned space program
is regarded by some Asian elites as an important technological achievement
of the Chinese system.30 Yet these impressive accomplishments have a darker
side. China’s breakneck growth has been accompanied by rampant
environmental degradation that has severely damaged China’s air and water.31
Rapid growth and construction in China’s major cities has destroyed many of
their most distinctive features and displaced poorer citizens to distant suburbs
with limited compensation. Poor urban planning and rapid growth in the
number of automobiles are making traffic a nightmare in many Chinese
cities.
Some believe the Chinese approach of reforming the economy while
limiting political freedom represents a new development model with
considerable appeal to authoritarian leaders in developing countries.32
China’s development model actually draws heavily on orthodox development
economics and benefits from special factors such as a large domestic market
and large labor supply that cannot readily be replicated by most other
countries.33 Domestic problems, social inequality, environmental degradation,
and periodic political clampdowns limit China’s attractiveness as a model for
others to emulate. Within Asia, Vietnam has clearly been influenced by
China’s approach to economic development, but the country Chinese leaders
have tried hardest to influence—North Korea—has proved reluctant to
embrace a Chinese-style opening. A significant slowdown in growth, a
widespread financial crisis, or a major internal security crackdown would
highlight the downsides of the Chinese model and significantly reduce
China’s ability to employ soft power as a diplomatic tool.

CHINA’S REASSURANCE EFFORTS

Regional concerns about Chinese power were aggravated in the mid-1990s
by China’s aggressive efforts to pursue its territorial claims, including its
1994 seizure and subsequent fortification of Mischief Reef, a small island in
the South China Sea claimed by the Philippines. In late 1995 and March
1996, China used military exercises (including firing ballistic missiles into
waters near Taiwan) to express its concerns about the Taiwan independence
movement and its displeasure at a US decision to permit Taiwan president
Lee Teng-hui to visit the United States and speak at Cornell University.
These actions prompted numerous articles and books highlighting China’s
military modernization and growing nationalism and asking whether China
posed a threat to the Asia-Pacific region.34 Chinese officials, scholars, and the
party’s propaganda apparatus launched repeated attacks on what they labeled
the “China threat theory,” but Chinese leaders also recognized the need for
actions to address regional concerns.
China has employed a variety of diplomatic, economic, and military
means to reassure its Asian neighbors that a stronger China will not threaten
their interests. China’s diplomatic efforts in Asia rest upon a foundation of
well-trained and capable diplomats able to convey Chinese messages
effectively.35 The content of China’s diplomatic messages also changed to
increase their appeal in Asia. In 1997–98 China advanced the “New Security
Concept,” a reformulation of its five principles of peaceful coexistence that
called for mutually beneficial cooperation on the basis of equality, mutual
respect, noninterference in the internal affairs of other countries, and
resolution of conflicts through dialogue.36 This concept meshed reasonably
well with the principles and preferred methods of operation of ASEAN
states.37 (The so-called ASEAN Way emphasizes decision making by
consensus, respect for national sovereignty, non-interference in internal
affairs, and a gradual pace to security cooperation.) Chinese pledges of non-
interference and respect for sovereignty provide assurances that Beijing will
not support separatist groups or intervene on behalf of ethnic Chinese outside
its borders.
China has sometimes sought to reassure ASEAN states by engaging and
negotiating with them on a multilateral basis, forgoing the bargaining
advantages a stronger country enjoys in bilateral negotiations. Beijing’s
willingness to negotiate in the “ASEAN+ China” framework offered some
reassurance that China would not pursue a “divide and conquer” strategy,
although China has repeatedly ruled out multilateral negotiations to resolve
the dispute over the Spratly Islands. China also launched a series of annual
summits with ASEAN, began participating more actively in the ASEAN
Regional Forum and its unofficial counterpart the Council for Security
Cooperation in the Asia Pacific (CSCAP), and signed the Declaration of
Conduct on the South China Sea, a non-binding pledge to resolve territorial
disputes peacefully. This pledge was an important confidence-building
measure because four ASEAN countries (Vietnam, the Philippines, Brunei,
and Malaysia) claim parts of the disputed Spratly Islands. At the 2003 Bali
summit, China became the first non-ASEAN member to sign the Treaty of
Amity and Cooperation (TAC), which codified ASEAN’s preferred
principles of international conduct such as non-aggression, non-interference,
and peaceful resolution of disputes. Beijing also signed a strategic partnership
agreement with ASEAN, giving the organization a status equal to its
partnerships with other major powers.
China has also participated substantively in multilateral regional
organizations such as the Asia-Pacific Economic Cooperation (APEC) forum;
ASEAN 3 (Japan, China, Korea); the ASEAN Regional Forum; and the East
Asia Summit. China was historically reluctant to participate in multilateral
forums due to fears that other countries would gang up on it and because
multilateral norms and procedures could constrain its ability to pursue its
interests. Increased multilateralism is a means of channeling Chinese power
in ways that make it more acceptable to its neighbors.38 Some analysts argue
that China now views multilateral and regional organizations as important
political venues and has become more active in these organizations as a
means of pursuing its national interests.39 China’s establishment of the
Shanghai Cooperation Organization (SCO) as a means of combating
terrorism and expanding its influence in Central Asia is compatible with this
view, as is China’s effective use of bilateral diplomacy to influence the
agenda of multilateral organizations such as ASEAN and the SCO in
directions that advance Chinese interests.
China has taken some concrete measures to address Asian security
concerns, such as its efforts in the 1990s to resolve most outstanding land
border disputes. These agreements eased concerns about potential conflicts
and paved the way for increased cross-border cooperation against terrorism
and organized crime.40 To handle maritime disputes in a less confrontational
way, China revived Deng Xiaoping’s approach of setting aside sovereignty
concerns and pursuing joint development of resources in disputed areas. This
approach yielded a 2004 agreement between China and the Philippines to
conduct seismic exploration for energy resources in parts of the South China
Sea. Vietnam joined the effort in 2005, but exploration efforts did not
identify promising areas for development and the agreement ended when the
Philippines withdrew in 2007.41 China made another joint development
attempt in the East China Sea in 2008, reaching an agreement with Japan to
jointly develop one bloc in disputed waters and to allow Japanese investment
in the Chunxiao gas fields in Chinese waters. However, the agreement
reportedly sparked intense nationalist opposition within China, and Beijing
has not implemented it. China has also pursued military confidence-building
measures with some of its neighbors, especially in the context of land border
agreements.
China’s accelerated military modernization has been accompanied by
efforts to reassure its Asian neighbors that a more powerful PLA will not
threaten their security. China has sought to demonstrate that its growing
military and paramilitary forces can make useful contributions to regional
security. The 2013 Chinese defense white paper states, “China’s armed forces
work to promote dialogue and cooperation on maritime security; participate
in UN peacekeeping missions, international counter-terrorism cooperation,
international merchant shipping protection and disaster relief operations;
conduct joint exercises and training with foreign counterparts;
conscientiously assume their due international responsibilities; and play an
active role in maintaining world peace, security and stability.”42 Starting in
2002, China began to observe and then participate in bilateral and multilateral
military exercises with neighboring countries as a confidence-building
measure. Although most are simple search-and-rescue exercises, they provide
an opportunity for Asian militaries to interact with the PLA. China has also
improved the quality of its participation in official and unofficial multilateral
security dialogues and established bilateral security dialogues with most
major countries in Asia. Although Chinese participants remain reluctant to
talk about Chinese military capabilities and often repeat official talking
points, these dialogues still have some value.
In the economic realm, China has sought to persuade Asian countries that
they will share in the benefits of China’s rapid growth, while simultaneously
advancing Chinese interests through commercial diplomacy. “Win-win” and
“mutual benefit” are the watchwords of China’s economic diplomacy.
Demand from China helped shield Asian countries from the 2008 global
financial crisis and is credited with helping to revive the Japanese economy
from its decade-long slump. China’s increasing role in world trade and
expectations of future growth make it an attractive market and give Beijing
leverage in dealing with trade partners. A relatively new element in China’s
economic diplomacy involves negotiation of regional and bilateral free trade
agreements (FTAs). The 2002 China-ASEAN FTA is the most significant
example, but China has also signed bilateral FTAs with New Zealand and
Singapore and begun negotiations or feasibility studies with Australia, South
Korea, India, and others.43 In the China-ASEAN FTA negotiations, China let
individual ASEAN states determine their own comfort level with the
coverage and pace of trade liberalization commitments and included “early
harvest” provisions that offered additional benefits to ASEAN agricultural
producers. Southeast Asian diplomats note that China has often been willing
to adapt its proposals for regional cooperation to build consensus, deferring
contentious issues or delaying proposals that are moving too fast for ASEAN
sensibilities.44 China is also a participant in a 2012 ASEAN-led initiative to
negotiate a Regional Comprehensive Economic Partnership (RCEP), which
seeks to establish an FTA between the ten ASEAN states and Australia,
China, India, Japan, South Korea, and New Zealand by 2015.45

CHINA’S RELATIONS IN ASIA SINCE 2009

From 1998 to 2008, China achieved remarkable success in improving
relations with its neighbors in Asia by employing the diplomatic, military,
and economic assurance measures described in the previous section. Their
effectiveness was predicated on a patient approach to territorial disputes and
restraint in the employment of Chinese military forces (even as PLA budgets
grew and military modernization efforts accelerated). However, in 2009 a
more assertive Chinese posture emerged on a wide range of bilateral,
regional, and global issues.46 Within the space of eighteen months, Chinese
diplomatic bullying, assertive military and paramilitary actions, and disregard
for foreign reactions undid many of the gains from Beijing’s decade-long
charm offensive. In particular, the means used to advance Chinese maritime
sovereignty claims in the South China Sea and East China Sea did
considerable damage to Beijing’s efforts to persuade others that China’s rise
would be peaceful.47
The shift in the tone and substance of Chinese policy had both
international and domestic causes. Chinese officials initially feared that the
2008 global financial crisis would severely damage China’s economy, but
these concerns eased as China’s massive 4 trillion RMB economic stimulus
(proportionately about four times the size of the US stimulus) took effect. As
Chinese growth resumed and the United States and Europe remained mired in
a recession, Chinese officials and analysts appear to have exaggerated the
negative impact of financial problems on US global leadership and
mistakenly concluded that a fundamental shift in the global balance of power
was under way. Chinese officials also appear to have misinterpreted Obama
administration efforts to increase bilateral cooperation and expand China’s
role in global institutions as a sign of US weakness and an opportunity to
press Washington for concessions.48 An exaggerated sense of Western decline
was coupled with overconfidence in China’s international position following
the successful hosting of the 2008 Olympic Games. This assessment played
into a nationalist mood in China, where many commentators (including
retired military officers) argued that a more powerful China should take a
hard line on challenges to Chinese territorial claims and use its economic
leverage to punish the United States for arms sales to Taiwan. Chinese
officials and scholars began to regularly cite nationalist public opinion as a
reason China could not compromise on territorial and sovereignty issues.49
Finally, senior Chinese leaders appear to have been preoccupied with
domestic concerns and not focused on foreign policy. High-level policy
coordination mechanisms such as the Foreign Affairs Leading Small Group
reportedly did not meet for more than a year during 2009–10, allowing the
PLA and China’s paramilitary forces more autonomy in implementing policy
on maritime disputes.
Chinese officials and scholars deny that Beijing changed its foreign policy
goals, expanded its territorial claims, or adopted a more assertive attitude
toward maritime disputes. They argue that other countries, emboldened by
passive or active US support, stepped up their challenges to China’s long-
established territorial claims. The May 2009 deadline for submissions to the
United Nations Convention on the Law of the Sea (UNCLOS) did spur many
Asian countries (including China) to reinforce their claims to disputed islands
and waters. Sometimes China initiated contentious actions, such as increased
patrolling in disputed waters and arrests of fishermen; other times Chinese
nationalists clamored loudly for strong reactions to actions by countries such
as Vietnam, the Philippines, and Japan that challenged Chinese sovereignty
claims. Chinese officials and military officers argued that restraint in
response to provocations was misinterpreted as weakness; Beijing could
either allow others to infringe on Chinese sovereignty and territorial integrity
or take appropriate measures in response.50 Beijing employed economic
coercion in some of the sovereignty disputes, including a temporary ban on
exports of rare earths to Japan following the 2010 arrest of a Chinese fishing
boat captain and import restrictions on Philippine bananas in 2012. China
also took a tough line on military activities in its exclusive economic zone,
acting to interfere with US ships (including a March 2009 incident off Hainan
Island when Chinese paramilitary vessels attempted to snag the towed sonar
array of the USNS Impeccable).51
Chinese officials, academics, and military officers all stress that China’s
domestic policy–making environment has changed, and that leaders must
now be more responsive to the concerns of Chinese citizens, including
nationalists who advocate a tough line on sovereignty disputes.52 Chinese
officials insist that China has not taken any actions that violate legitimate
freedom of navigation and that its policies of seeking to resolve territorial
disputes through peaceful dialogue and its willingness to set aside
sovereignty and pursue joint exploitation of resources in disputed areas
remain unchanged. China’s self-image as a peace-loving principled country
that has been reluctantly forced to respond to provocations contrasts with the
views of neighboring countries that Beijing is systematically using coercion
and intimidation to expand its effective control of disputed territories.
Whatever the motivation, China’s actions caused widespread concerns that
a stronger China, driven by popular nationalism and a misperception of US
weakness in the aftermath of the global financial crisis, was seeking to
dominate the region and intimidate its neighbors. For a US administration
emphasizing the importance of unimpeded access to the “global commons”
for economic growth, Beijing’s actions represented a clear threat to regional
peace and stability, freedom of navigation, open sea lines of communication,
and commerce. For China’s neighbors, these assertive actions raised concerns
about increasing vulnerability to Chinese coercion as PLA power projection
capabilities improved and Chinese economic power increased relative to the
United States.53
Heightened concerns about Chinese behavior found political expression in
the July 2010 ASEAN Regional Forum (ARF) meeting in Hanoi, when
twelve Asian states joined US Secretary of State Hillary Clinton in
expressing concerns about freedom of navigation in the South China Sea,
despite the efforts of Chinese diplomats to discourage them from raising the
issue. Chinese foreign minister Yang Jiechi gave an angry speech during the
meeting in which he wagged his finger at the Singapore representative and
pointedly stated that “China is a big country and other countries are small
countries, and that’s just a fact.” This meeting highlighted the negative
impact of assertive Chinese actions on China’s position in Asia and may have
prompted Beijing to adjust its approach. (State Councilor Dai Bingguo, the
senior Chinese foreign policy official, gave a speech in fall 2010 reiterating
China’s continued commitment to “peaceful development” and began
discussing the need for a “new type of great power relationship” with
Washington, measures intended to reassure foreign audiences.)
Perceptions of a more assertive China prompted policy shifts throughout
Asia and in the United States. Asian countries (especially those involved in
territorial disputes with China) began to improve their military capabilities to
reduce their vulnerability to Chinese pressure. ASEAN members tried to
engage China multilaterally in order to reduce Beijing’s power advantage in
dealing with individual states, with a particular focus on negotiating a legally
binding code of conduct governing behavior in the South China Sea. ASEAN
members also sought to increase the involvement of major powers such as
Japan, India, Russia, and the United States in regional affairs in order to
offset China’s power and influence. (This is one reason the East Asia Summit
included India, Australia, and New Zealand and later added Russia and the
United States.) US treaty allies and partners such as Singapore, Malaysia, and
Vietnam increased security cooperation with the United States (including
allowing greater base access to US forces) and urged Washington to reinforce
its long-term commitment to the region.
This political context formed the backdrop for the US “rebalance” to Asia
announced in November 2011. Although primarily a response to expanding
US economic, political, and security interests in Asia, the rebalance also
reflected regional demands for concrete evidence of US long-term
commitment.54 The Obama administration coupled the rebalance with efforts
to build a more cooperative and stable Sino-US relationship. The broad US
strategy of seeking to integrate China more fully within the current global
order, while discouraging any efforts to reshape that order by force or
intimidation, remained in place. Washington sought to make the rebalance
robust enough to reassure US allies and partners of its capability and will to
maintain a presence in Asia over the long term while not alarming Chinese
leaders to the point where they abandoned bilateral cooperation.
Nevertheless, the rebalance is widely viewed as evidence of increasing US-
China competition for regional influence.
The official Chinese reaction to the US rebalance has been to express
concern and skepticism about the stated US rationale, lament the “lack of
strategic trust” between Washington and Beijing, urge greater respect for
Chinese “core interests,” and stress the negative consequences of the
rebalance for Asian security (especially its supposed role in emboldening US
allies and partners to challenge Chinese maritime territorial claims). Chinese
officials have also expressed concerns about Washington’s support for the
TransPacific Partnership (TPP), a proposed regional trade agreement with
high-quality labor, environmental, and intellectual property standards that
Beijing would have difficulty meeting. These views are echoed in the
description of the regional security environment in China’s 2013 defense
white paper: “The Asia-Pacific region has become an increasingly significant
stage for world economic development and strategic interaction between
major powers. The US is adjusting its Asia-Pacific security strategy, and the
regional landscape is undergoing profound changes.” The white paper
continues, “Some country has strengthened its Asia-Pacific military alliances,
expanded its military presence in the region, and frequently makes the
situation there tenser. On the issues concerning China’s territorial sovereignty
and maritime rights and interests, some neighboring countries are taking
actions that complicate or exacerbate the situation, and Japan is making
trouble over the issue of the Diaoyu Islands.”55

CHINA’S BALANCING ACT

Chinese leaders have responded to the US rebalance and their perception of

an altered regional security environment with both assurance measures and
enhanced efforts to deter challenges to Chinese sovereignty claims. One
aspect of China’s response has been to redouble efforts to stabilize Sino-US
relations, most notably through efforts to build a “new type of great power
relations” with Washington. Chinese leaders were initially suspicious of
Obama administration efforts to build a partnership, but Beijing has
subsequently taken the lead in trying to build a US-China strategic
relationship.56 A second element is to recalibrate China’s bilateral approach
to countries in Asia to pay closer attention to each country’s relations with
Washington and the overall state of US-China relations. This “triangular
approach” has generally produced more restrained and cooperative policy,
with Beijing leaning more heavily on assurance measures to avoid driving
countries into Washington’s arms. Increased cooperation with the United
States also offers potential leverage over third countries (if Beijing can
persuade Washington to restrain its allies and partners from actions that
challenge Chinese claims). This approach appears patterned on how China
dealt with the pro-independence Taiwan government led by Chen Shui-bian
in 2002–3. By portraying Chen as an irresponsible leader whose actions
threatened regional stability, China sought (and to some degree obtained) US
cooperation in preventing Chen from engaging in pro-independence actions
that might cross Beijing’s red lines for the use of force.
At the same time, China has continued its harder line on territorial
disputes. Chinese leaders have defined sovereignty and territorial integrity as
a “core interest” where compromise is impossible.57 New top leaders
President Xi Jinping and Prime Minister Li Keqiang have emphasized their
refusal to sacrifice China’s core interests and steadfast determination to
uphold national sovereignty and territorial integrity.58 One scholar argues that
Beijing’s approach is focused on consolidating its maritime territorial claims
and deterring other states from strengthening their claims at China’s expense.
Beijing has employed a range of diplomatic, administrative, and military
tactics to expand its effective control over disputed territories.59 Beijing has
expanded and reorganized its naval paramilitary forces to improve their
ability to patrol disputed waters and reinforce China’s territorial claims.
Chinese leaders have also accelerated military modernization efforts with a
focus on limiting the US ability to operate close to Chinese territory and
gradually extending the PLA’s power projection capability.
In 2012 and 2013, China engaged in a series of heated territorial disputes
with the Philippines, Vietnam, Japan, and India in which an even tougher
Chinese approach became evident. In April 2012, a tense standoff occurred
between a Philippine navy frigate investigating illegal fishing and China
Marine Surveillance and an armed Fishery Law Enforcement Command ship
around Scarborough Shoal/Huangyan Island. Both sides eventually agreed to
withdraw their ships, but Chinese paramilitary ships later returned, set up a
barrier at the entrance to the shoal, and have maintained a presence ever
since. The outcome redefined the status quo in a way that expanded China’s
effective control over the disputed territory. Chinese officials, military
officers, and scholars blamed the Philippines for starting the incident and
argued that the outcome would deter future challenges. China subsequently
applied the “Scarborough model” to the Senkaku/Diaoyu Islands in
September 2012 after the Japanese government purchased several of the
islands from a private Japanese owner. China argued that the Japanese action
altered the status quo and initiated air and maritime patrols near the island to
reinforce China’s sovereignty claim and to challenge Japan’s position that
there is no dispute over the sovereignty of the islands.60 In both cases, China
used the opportunity provided by another claimant’s actions to alter the status
quo in its favor.
The more assertive approach to territorial disputes described above is in
tension with efforts to persuade China’s neighbors of Beijing’s commitment
to “peaceful development.” A hard line on territorial disputes raises tensions
with other claimants, including major regional powers such as Japan and
India. Chinese leaders are therefore trying to strike a careful balance between
maintaining a peaceful and stable security environment and gradual efforts to
strengthen control over disputed territories. In a July 2013 Politburo study
session on maritime issues, President Xi reiterated China’s uncompromising
position on sovereignty, but also highlighted the importance of
simultaneously “maintaining stability” and “safeguarding [maritime]
rights.”61 A senior PLA officer privately described one of China’s major
challenges as “the balance between pursuing national interests and
maintaining world peace.”62
China’s policy includes a number of elements designed to make this
tension more manageable. One is to rely primarily on paramilitary forces and
coercive tactics while minimizing employment of military assets and the use
of force. This reduces the political cost of aggressive tactics and limits the
risk of escalation into a broader military conflict. A second is to try to deter
challenges by ensuring that countries that challenge China’s claims wind up
in a worse position. Beijing hopes that improved relations with Washington
may limit US support for other claimants or even restrain them from
challenging China’s claims. Beijing’s insistence on bilateral resolution of
territorial disputes allows it to differentiate and adjust its policies to
individual claimants, preventing rivals from uniting to resist Chinese tactics.
China successfully pressured Cambodia not to include concerns about
Beijing’s behavior in the chairman’s statement at the November 2012
ASEAN summit, casting doubts about ASEAN unity on the issue. China’s
proclaimed willingness to pursue joint development in disputed areas is also
intended to soften Beijing’s hard-line approach to territorial disputes and
offer “win-win” solutions. Chinese leaders hope that these measures, coupled
with liberal use of reassurance measures, will allow China to gradually
expand its effective control of disputed territories without the need to use
force.
Ultimately, Beijing’s patient approach is based on the belief that the
regional balance of power is moving in China’s favor and that other countries
will eventually have to compromise in order to maintain good relations with a
dominant China. This belief allows Chinese leaders to avoid the difficult
compromises that would be necessary to settle maritime territorial disputes.
However, other claimants also face nationalist publics and are unlikely to
simply abandon their claims to disputed territories. If they adopt equally
uncompromising policies, Beijing’s efforts to gradually extend its control of
disputed territories are likely to have an increasingly corrosive impact on
China’s relations with its neighbors and the regional security environment.

CONCLUSION
China’s future role in Asia will be shaped by a number of variables. The first
important variable is China’s own power trajectory. China is facing a difficult
transition to an economy driven less by exports and more by domestic
demand, a transition complicated by opposition from politically powerful
state-owned enterprises, a weakened financial system, and adverse
demographic trends. Growth will slow considerably under the best-case
scenario, and a major financial crisis or protracted political infighting could
derail China’s growth trajectory. A weaker China whose leaders are
distracted by domestic problems is likely to improve economic cooperation
with other countries and to seek to stabilize its regional environment by
following more restrained policies on territorial disputes. (However, some
analysts believe Chinese leaders might divert attention from a lagging
economy by picking fights with neighboring countries.) Conversely, a
stronger China will have more military power projection capabilities and may
be less restrained in its international behavior.
Because power is relative, a second important factor will be the power of
other regional and extraregional actors. One critical question is the US ability
to sustain the rebalance to Asia. If financial problems or reduced willingness
to deploy military forces overseas compels US strategic retrenchment, China
would have a freer hand. Conversely, a more powerful and engaged United
States would increase the competitive dynamics between Washington and
Beijing in the region. The relevance of Russia and the European Union to
regional political and security affairs is also uncertain. Within Asia, the
economic fortunes of Japan and India and their political ability to sustain an
active regional role will be critical variables. Assertive Chinese policies on
territorial disputes would increase tensions with both countries, impeding
regional integration and potentially beginning to unwind regional economic
interdependence. No single ASEAN country can stand up to China alone, so
the ability of ASEAN to engage the support of outside powers and maintain a
degree of internal unity will also be an important factor.
A third variable will be the relative weight Chinese leaders place on
legitimacy derived through economic growth versus legitimacy derived by
achieving nationalist goals. In the reform era, Chinese leaders have
prioritized growth to raise living standards and maintain the Communist
Party’s leading position. Given China’s economic interdependence with its
neighbors, Chinese leaders have been highly sensitive to the economic
consequences of assertive actions and have generally shifted to more
restrained policies when military or nationalist actions threatened economic
cooperation. This is still the most likely outcome, but nationalist sentiment
among Chinese leaders (and in the Chinese population) may lead to greater
weight on nationalist goals. The balance could also be affected if political
support for the Communist Party continues to erode or if leadership factions
within the party begin to use nationalist goals to compete for power.
A fourth variable involves the ability of Chinese leaders to adapt policy
smoothly to maintain the right balance between a stable regional environment
and expanding control of disputed territories. China’s national security
policy-making apparatus is relatively weak and uncoordinated. It has
difficulty recognizing and responding rapidly to changed circumstances,
especially when responses require politically difficult compromises.
Heightened nationalism or leadership disagreements could make it harder for
China to adjust policies and pursue effective reassurance measures to
maintain stability. Moreover, territorial disputes (and increased US-China
military interactions within Asia) may increase the likelihood of an accident
or an incident escalating into a larger military confrontation. China’s
relatively underdeveloped crisis-management capabilities could be put to the
test and fail.
Finally, unexpected regional security problems could produce fundamental
changes in Chinese policy. A North Korean collapse or a military conflict
precipitated by Pyongyang’s nuclear weapons ambitions could lead to
Chinese military actions to control the situation, which could heighten
conflicts with Seoul, Tokyo, and Washington. Despite China’s efforts to paint
Taiwan as a “domestic issue” qualitatively different from its approach to
international security concerns, Asian countries still view Beijing’s approach
to Taiwan as a litmus test. A decision to use force or coercion against Taiwan
(more likely if a pro-independence Taiwan leader is in power) would alarm
East Asian countries and could shift both US policy and that of China’s
neighbors.
During the reform era, China has sought to preserve a stable international
environment that supports continued economic growth that can help maintain
domestic stability, build its national wealth and power, and expand its
influence. These principles have also guided China’s Asia policy, which has
emphasized the need to reassure Asian countries that a stronger China will
not threaten their interests. However, a more assertive approach to territorial
disputes is in tension with efforts to persuade China’s neighbors of China’s
commitment to “peaceful development.” If Beijing cannot maintain the right
balance, the result will be increasingly strained relations with its neighbors
and the United States and the creation of a more hostile regional security
environment.

NOTES
The views expressed in this chapter are those of the author and do not necessarily represent those of
the National Defense University, the Department of Defense, or the US government. The author thanks
Joseph Kettel and Katrina Fung for research assistance.
1. See Robert Sutter, China’s Rise in Asia: Promises and Perils (New York: Rowman & Littlefield,
2005); Evelyn Goh, ed., Betwixt and Between: Southeast Asian Strategic Relations with the U.S. and
China (Singapore: Institute of Defence and Strategic Studies, 2005); David Shambaugh, ed., Power
Shift: China and Asia’s New Dynamics (Berkeley: University of California Press, 2006); David
Shambaugh, “China Engages Asia: Reshaping the Regional Order,” International Security 29, no. 3
(2004–5): 64–99; Bronson Percival, The Dragon Looks South: China and Southeast Asia in the New
Century (Westport, CT: Praeger Security International, 2007).
2. See David Shambaugh, “The Chinese Tiger Shows Its Claws,” Financial Times, February 17,
2010; and Michael Swaine, “Perceptions of an Assertive China,” China Leadership Monitor, no. 32
(May 2010).
3. For assessments of China’s grand strategy, see Michael D. Swaine and Ashley J. Tellis,
Interpreting China’s Grand Strategy: Past Present and Future (Washington, DC: Rand Corporation,
2000); Avery Goldstein, Rising to the Challenge: China’s Grand Strategy and International Security
(Stanford, CA: Stanford University Press, 2005); and David Shambaugh, China Goes Global: The
Partial Power (New York: Oxford University Press, 2013).
4. Erica Strecker Downs and Phillip C. Saunders, “Legitimacy and the Limits of Nationalism: China
and the Diaoyu Islands,” International Security 23, no. 3 (Winter 1998/1999): 114–46.
5. For a useful overview from a Chinese scholar, see Ye Zhicheng, Inside China’s Grand Strategy:
The Perspective from the People’s Republic (Lexington: University Press of Kentucky, 2011).
6. Robert Koopman, “How Much of Chinese Exports Is Really Made in China?,” US International
Trade Commission, March 2008, http://www.usitc.gov/publications/332/working_papers/ec200803b…
revised.pdf.
7. For a comprehensive analysis of Chinese security concerns, see Andrew J. Nathan and Andrew
Scobell, China’s Search for Security (New York: Columbia University Press, 2012).
8. Phillip C. Saunders, “The Rebalance to Asia: U.S.-China Relations and Regional Security,” INSS
Strategic Forum, no. 281 (2013).
9. World Bank, “Key Development Data and Statistics,” http://www.worldbank.org. The East Asia
percentage of global GDP is based on 2012 World Bank purchasing power parity estimates at
http://data.worldbank.org/data-catalog/GDP-PPP-based-table.
10. Sutter, China’s Rise in Asia; Aaron L. Friedberg, A Contest for Supremacy: China, America, and
the Struggle for Mastery in Asia (New York: Norton, 2011).
11. See Denny Roy, “More Security for Rising China, Less for Others?,” AsiaPacific Analysis, no.
106 (January 2013).
12. For accounts of how Chinese leaders and analysts came to this realization, see Shambaugh,
“China Engages Asia: Reshaping the Regional Order”; and Yong Deng, “Reputation and the Security
Dilemma: China Reacts to the China Threat Theory,” in New Directions in the Study of China’s
Foreign Policy, ed. Alastair Iain Johnston and Robert S. Ross (Stanford, CA: Stanford University
Press, 2006), 186–214.
13. Calculated from Chinese export statistics as reported in the UN Comtrade database.
14. Bonnie S. Glaser, “China’s Coercive Economic Diplomacy: A New and Worrying Trend,”
PacNet, no. 46 (Honolulu: Pacific Forum CSIS, July 23, 2012).
15. Chinese 2012 outbound investment data are from the CEIC China database; “China-ASEAN FDI
Surpasses $10 BLN,” Bermana Media, April 8, 2011, http://my.news.yahoo.com/china-asean-fdi-
surpasses-us-10-bln-20110408-063544-436.html.
16. China’s Foreign Aid (Beijing: Information Office of the State Council, 2011).
17. John W. Garver, “Development of China’s Overland Transportation Links with Central,
Southwest and South Asia,” China Quarterly, no. 185 (March 2006): 1–22; Phillip C. Saunders,
China’s Global Activism: Strategy, Drivers, and Tools (Washington, DC: National Defense University
Press, 2006), http://www.ndu.edu/inss/Occasional_Papers/OCP4.pdf (accessed January 15, 2008).
18. Important studies include David Shambaugh, Modernizing China’s Military: Progress, Problems,
and Prospects (Berkeley: University of California Press, 2004); Dennis J. Blasko, The Chinese Army
Today: Tradition and Transformation for the 21st Century, 2nd ed. (New York: Taylor & Francis,
2012); Phillip C. Saunders, Christopher Yung, Michael Swaine, and Andrew Nien-Tzu Yang, eds., The
Chinese Navy: Expanding Capabilities, Evolving Roles (Washington, DC: NDU Press, 2011); Richard
P. Hallion, Roger Cliff, and Phillip C. Saunders, eds., The Chinese Air Force: Evolving Concepts,
Roles, and Capabilities (Washington, DC: NDU Press, 2012); and Ashley J. Tellis and Travis Tanner,
eds., China’s Military Challenge (Seattle, WA: National Bureau of Asian Research, 2012).
19. David M. Finkelstein, “China’s National Military Strategy: An Overview of the ‘Military
Strategic Guidelines,’” in Right-Sizing the People’s Liberation Army: Exploring the Contours of
China’s Military, ed. Roy Kamphausen and Andrew Scobell (Carlisle, PA: Strategic Studies Institute,
2007), 70–72.
20. Estimate is from the SIPRI Military Expenditure Database, accessed October 4, 2013. The US
defense department estimates that Chinese defense spending in 2012 was in the range of $135 to $215
billion. Office of the Secretary of Defense, “Annual Report to Congress: Military and Security
Developments Involving the People’s Republic of China 2013,” 45,
http://www.defense.gov/pubs/2013_China_Report_FINAL.pdf.
21. Roger Cliff, Mark Burles, Michael S. Chase, Derek Eaton, and Kevin L. Pollpeter, Entering the
Dragon’s Lair: Chinese Antiaccess Strategies and Their Implications for the United States (Arlington,
VA: Rand Corporation, 2007); Sam J. Tangredi, Anti-Access Warfare: Countering A2/AD Strategies
(Annapolis, MD: Naval Institute Press, 2013).
22. Roy D. Kamphausen and Justin Liang, “PLA Power Projection: Current Realities and Emerging
Trends,” in Assessing the Threat: The Chinese Military and Taiwan’s Security, ed. Michael D. Swaine,
Andrew N. D. Yang, and Evan Medeiros (Washington, DC: Carnegie Endowment for International
Peace, 2007), 111–50.
23. See Lyle J. Goldstein, Five Dragons Stirring Up the Sea: Challenge and Opportunity in China’s
Improving Maritime Enforcement Capabilities (Report No. 5, China Maritime Studies Institute, US
Naval War College, Newport, RI, April 2010).
24. “Everyone Wants a Chinese Tourist in 2013,” January 8, 2013,
http://skift.com/2013/01/08/everyone-wants-a-chinese-tourist-in-2013.
25. Figures for 2010 outbound Chinese students are from the UNESCO Institute for Statistics,
http://www.uis.unesco.org/Education/Pages/international-student-flow-viz.aspx (accessed September
30, 2013); figures for Asia-Pacific students in China are from China’s Foreign Affairs 2013, table 10
(Beijing: World Affairs Press, 2013): 403–8.
26. Office of Chinese Language Council International, “Confucius Institutes: Asia,”
http://english.hanban.org/node_10971.htm (accessed September 11, 2013).
27. Network of East Asian Think-Tanks, “About Us,”
http://www.neat.org.cn/english/zjdyen/index.php?topic_id=001001 (accessed October 8, 2013).
28. See David Shambaugh, China Goes Global, chap. 6.
29. Thomas Fuller, “Made in China: Cheap Products Change Lives,” New York Times, December 27,
2007.
30. Other Asian countries also view their space programs as an indicator of national achievement. See
James Clay Moltz, Asia’s Space Race: National Motivations, Regional Rivalries, and International
Risks (New York: Columbia University Press, 2011).
31. See Elizabeth C. Economy, The River Runs Black (Ithaca, NY: Cornell University Press, 2004).
One useful resource is the Wilson Center’s “China Environment Forum” website,
http://www.wilsoncenter.org/program/china-environment-forum.
32. Joshua Cooper Ramos, The Beijing Consensus (London: Foreign Policy Centre, 2004),
http://fpc.org.uk/fsblob/244.pdf (accessed January 18, 2008); Stefan Halder, The Beijing Consensus:
How China’s Authoritarian Model Will Dominate the Twenty-First Century (New York: Basic Books,
2010); Randall Peerenboom, China Modernizes: Threat to the West or Model for the Rest? (New York:
Oxford University Press, 2007). For more skeptical views, see Minxin Pei, China’s Trapped
Transition: The Limits of Developmental Autocracy (Cambridge, MA: Harvard University Press, 2006);
and Scott Kennedy, “The Myth of the Beijing Consensus,” Journal of Contemporary China, 19, no. 65
(2010): 461–77.
33. Chinese labor costs have risen rapidly, especially in major cities in Southeast China. Labor-
intensive production is beginning to move to countries with lower labor costs such as Bangladesh and
Vietnam.
34. Denny Roy, “Hegemon on the Horizon? China’s Threat to East Asian Security,” International
Security 19, no. 1 (Summer 1994): 149–68; Richard Bernstein and Ross H. Munro, The Coming
Conflict with China (New York: Knopf, 1997). For a survey of regional views and strategies, see
Alastair Iain Johnston and Robert S. Ross, eds., Engaging China: The Management of an Emerging
Power (New York: Routledge, 1999).
35. Evan S. Medeiros and M. Taylor Fravel, “China’s New Diplomacy,” Foreign Affairs 82, no. 6
(2003): 22–35.
36. David M. Finkelstein, “China’s New Security Concept: Reading between the Lines,” Washington
Journal of Modern China 5, no. 1 (1999): 37–50.
37. The ten ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma),
the Philippines, Singapore, Thailand, and Vietnam.
38. On the role of multilateral organizations in legitimating and constraining power, see John Gerard
Ruggie, ed., Multilateralism Matters (New York: Columbia University Press, 1993); and G. John
Ikenberry, “Institutions, Strategic Restraint, and the Persistence of American Postwar Order,”
International Security 23, no. 3 (Winter 1998/1999): 43–78. On China’s changing attitude and
increasing participation in these institutions, see Elizabeth Economy and Michel Oksenberg, eds.,
China Joins the World: Progress and Prospects (New York: Council on Foreign Relations, 1999);
Alastair Iain Johnston, “Socialization in International Institutions: The ASEAN Way and International
Relations Theory,” in International Relations Theory and the Asia-Pacific, ed. G. John Ikenberry and
Michael Mastanduno (New York: Columbia University Press, 2003), 107–62; and Bates Gill, Rising
Star: China’s New Security Diplomacy (Washington, DC: Brookings Institution, 2007).
39. See Marc Lanteigne, China’s Engagement with International Institutions: Alternate Paths to
Global Power (New York: Routledge, 2005); Guoguang Wu and Helen Lansdowne, eds., China Turns
to Multilateralism: Foreign Policy and Regional Security (New York: Routledge, 2008); and
Mingjiang Li, ed., China Joins Global Governance (New York: Lexington Books, 2012).
40. M. Taylor Fravel, “Regime Insecurity and International Cooperation: Explaining China’s
Compromises in Territorial Disputes,” International Security 30, no. 2 (Fall 2005): 46–83.
41. See Ian Story, “Trouble and Strife in the South China Sea—Part II: The Philippines and China,”
China Brief 8, no. 9 (2008).
 42. “The Diversified Employment of China’s Armed Forces” (Beijing: Information Office of the
State Council, 2013).
43. See the Ministry of Commerce website page, “China FTA Network,”
http://fta.mofcom.gov.cn/english/index.shtml (accessed October 2, 2013); and Guoyou Song and Wen
Jin Yuan, “China’s Free Trade Agreement Strategies,” Washington Quarterly 35, no. 4 (2012): 107–19,
http://csis.org/files/publication/twq12FallSongYuan.pdf.
44. Author’s interviews with Southeast Asian diplomats, 2004–7.
45. See Murray Hiebert and Liam Hanlon, “ASEAN and Partners Launch Regional Comprehensive
Economic Partnership,” CSIS, December 7, 2012, http://csis.org/publication/asean-and-partners-
launch-regional-comprehensive-economic-partnership.
46. See Jeffrey A. Bader, Obama and China’s Rise: An Insider’s Account of America’s Asia Strategy
(Washington, DC: Brookings Institution Press, 2012), chap. 7; and the discussion in Michael D.
Swaine, “Perceptions of an Assertive China,” China Leadership Monitor 32 (2010).
47. Michael D. Swaine and M. Taylor Fravel, “China’s Assertive Behavior—Part Two: The Maritime
Periphery,” China Leadership Monitor 35 (2011).
48. For an insider’s perspective on Obama administration thinking about building a partnership with
China, see Bader, Obama and China’s Rise, chap. 1. Chinese overconfidence in Western decline and
the increasing power of the developing world is evident in the shifting language used to describe the
trend toward a multipolar world in the 2008, 2011, and 2013 defense white papers. Also see Andrew
Scobell and Scott W. Harold, “An ‘Assertive’ China? Insights from Interviews,” Asian Security 9, no. 2
(2013): 111–31.
49. Suisheng Zhao, “Foreign Policy Implications of Chinese Nationalism Revisited: The Strident
Turn,” Journal of Contemporary China 22, no. 82 (2013): 535–53.
50. Author’s interactions with Chinese officials, military officers, and scholars, 2009–13.
51. Mark E. Redden and Phillip C. Saunders, “Managing Sino-U.S. Air and Naval Interactions: Cold
War Lessons and New Avenues of Approach,” China Strategic Perspectives 5 (2012).
52. See Linda Jakobson and Dean Knox, “New Foreign Policy Actors in China” (Stockholm
International Peace Research Institute [SIPRI] Policy Paper No. 26, September 2010),
http://books.sipri.org/product_info?c_product_id=410.
53. See Ashley J. Tellis, Travis Tanner, and Jessica Keough, eds., Asia Responds to Its Rising Powers
(Seattle, WA: National Bureau of Asian Research, 2011).
54. Saunders, “The Rebalance to Asia.”
55. “The Diversified Employment of China’s Armed Forces.” This assessment is the party’s official
view and closely parallels the description in the Eighteenth Party Congress work report.
56. See David Shambaugh, ed., Tangled Titans: The United States and China (Lanham, MD:
Rowman & Littlefield, 2013).
57. See Michael D. Swaine, “China’s Assertive Behavior—Part One: On ‘Core Interests,’” China
Leadership Monitor, no. 34 (2011).
58. Robert Sutter and Chin-hao Huang, “China’s Growing Resolve in the South China Sea,”
Comparative Connections 15, no. 1 (2013).
59. M. Taylor Fravel, “China’s Strategy in the South China Sea,” Contemporary Southeast Asia 33,
no. 3 (2011): 292–319; Michael Yahuda, “China’s New Assertiveness in the South China Sea,” Journal
of Contemporary China 22, no. 81 (2013): 446–59.
60. M. Taylor Fravel, “China’s Island Strategy: ‘Redefine the Status Quo,’” Diplomat, November 1,
2012.
61. M. Taylor Fravel, “Xi Jinping’s Overlooked Revelation on China’s Maritime Disputes,”
Diplomat, August 15, 2013.
62. Author’s interview, Beijing, September 2013.
 Chapter Seven
India’s Role in Asia
A Rising Regional Power
T.V. PAUL

India’s role in Asia is gradually emerging as a crucial topic of interest in

contemporary international relations, along with the prospective rise of India
as a major global power. The reasons for this newfound attention can be seen
both in economic and in strategic terms. India began the liberalization of its
economy in 1991 and has since then shown considerable growth in its gross
domestic product (GDP), averaging between 6 and 8 percent annually, only
to slow down to 5.5 percent by 2012–13. This placed the Indian economy, in
terms of purchasing power parity (PPP), as the fourth largest in the world by
2007. Even in absolute US dollar terms, the Indian economy is currently in
the ninth position globally, although it is expected to move into the third
place among world economies, after China and the United States, by the
middle of this century.1 As a result, the world has begun to view India in a
new light as a land of economic opportunities (despite several constraints in
doing business in India, including its archaic bureaucratic rules, chronic
corruption, and poor infrastructure).
In strategic terms, India’s role has increased given the expectations among
official and strategic circles in the United States and its allies in Asia and
Europe that the rise of China inevitably calls for countervailing power
centers. Within Asia, India and Japan are the most potent nations for balance
of power individually or collectively. The dramatic transformation of US-
India relations, although partially driven by economic considerations, is also
propelled by strategic calculations on both sides. While the US-India
friendship is unlikely to emerge as a patron-client relationship or a typical
military alliance, it has already become more like limited cooperation for
“soft balancing,” although it could mature into a hard-balancing alliance if
China assumes a threatening posture in the Asia-Pacific region.2 India,
however, has simultaneously been engaging in “internal hard balancing” vis-
à-vis China by relying on arms imports, nuclear and missile buildup, and
steady infrastructure development in the border areas. Indian military
capabilities do not yet match China’s; hence it constitutes only a limited hard-
balancing effort. Until 2010, the probability of an intense balance of power
competition with China by the United States and India looked low as both
had emerged as major trading partners of China. Moreover, the Chinese
approach to its own rise in the international system did not seem to imitate
the aggressive route followed by European rising powers in the nineteenth
and early twentieth centuries, which called for hard-balancing strategies by
affected powers.3 But by 2013, this was slowly changing as a result of
China’s somewhat aggressive territorial intrusions.
The hardening of China’s position on territorial disputes over small islands
in the South and East China seas, as well as intrusion incidents involving
Chinese troops on the Indian border in 2012 and 2013, have generated much
concern among its Asian neighbors. In response, India—along with the
United States, Japan, and some of the ASEAN states—has resorted to partial
hard balancing while maintaining economic ties and diplomatic engagements
with Beijing. The United States, especially through its “pivot to Asia”
strategy, has signaled to China its active balancing effort unless Beijing
modifies its aggressive policies.4 India’s policy toward China, similar to
others in Asia-Pacific, is still in a hedging mode involving limited internal
hard balancing, soft balancing, and diplomatic engagement (partly because of
the huge trade relationship it has built in the economic arena with China in an
era of intensified globalization).
India’s search for a major power role is somewhat akin to China’s to the
extent that it seeks a peaceful rise rather than a violent one. However, India
has not pursued the goal as vigorously as China has, even though India has
emerged as a more confident nation during the past two decades and has been
able to develop strategic partnerships and diplomatic engagements with all
leading powers. India’s status adjustment seems more acceptable to most
other states in Asia, except China and Pakistan, as its liberal democratic order
is raising little alarm among them. Accommodation is taking place gradually,
especially since the landmark US-India nuclear accord was signed in July
2005, and other subsequent agreements that made India a de facto nuclear
weapon state although it is not a signatory to the Nuclear Non-Proliferation
Treaty (NPT). India has also become an active partner in forums such as the
Group of Twenty (G-20). However, unlike China, India is still not a
permanent member of the UN Security Council. The Indian efforts in this
direction have received much support among all P-5 states except China, but
since it is still tied to the politics of Security Council reforms, they are
unlikely to come to fruition in the near future. Thus, India’s formal
acceptance as a major power with all the associated institutional and political
privileges may be a distant event as the international system has not yet
devised a peaceful mechanism for the accommodation of rising powers,
although it may already be taking place informally.5
This chapter first discusses the origins of India’s foreign policy, especially
the initial effort by India to carve out an independent position in the world
system, and its interactions with neighboring countries, which is followed by
a discussion of its efforts at gaining major power status. The second section
offers a brief explanation for India’s foreign policy behavior. The final
section discusses the future trajectories of India’s foreign policy in the
coming decades of the twenty-first century.

THE PAST AS PRELUDE

India emerged as an independent state in August 1947 after being colonized

by Great Britain for about two hundred years. At the time of independence, it
was divided between nine main British-ruled provinces and some five
hundred–plus nominally independent princely states (protectorates). The
colonial experience left deep marks on the political, economic, cultural, and
other facets of India, as well as an elite skeptical of great power alignments
and balance of power competition. Even though British rule helped to
develop a sense of national identity and liberal democracy in India, the
country was left extremely poor economically as the colonial rulers used it
for raw material collection and as a market for their finished goods while
developing very few indigenous industries. A stark reminder of this is
contained in the statistics that in 1750 India had a share of 24.5 percent of the
world manufacturing output and 7 percent of per capita industrialization,
which by 1900 had shunk to 1.7 and 1 percent, respectively.6
 India’s independence occurred almost at the same time as the onset of the
US-Soviet Cold War competition and the creation of two adversarial blocs in
the post–World War II international system. The leaders of the Indian
nationalist movement, especially the first prime minister, Jawaharlal Nehru,
envisioned an independent foreign policy role for India and did not wish to
entangle themselves in the superpower competition, which they viewed as
somewhat similar to past imperial struggles among European powers.
Moreover, India sought developmental assistance from both sides in
furtherance of Nehru’s policy of state-led economic development based on
heavy industry and import substitution. At the international level this meant a
policy of organizing newly emerging states into an independent bloc. The
first key event toward this goal was the convening of the Afro-Asian
conference in Bandung, Indonesia, in April 1955. Subsequently, the Non-
Aligned Movement (NAM) emerged out of this endeavor, led by Nehru along
with Egypt’s Gamal Abdel Nasser and Yugoslavia’s Marshal Tito. India
became very active in mediation roles, especially in Korea, and lent its strong
support for peacekeeping operations to the UN.
The Indian activism in developing a third diplomatic front raised the ire of
the United States, especially the Eisenhower administration. Secretary of
State John Foster Dulles called the Indian efforts “immoral.”7 The
relationship between India and the United States was frosty during much of
the Cold War, except for a brief interlude during the Kennedy administration.
They were aptly called “estranged democracies.”8 The Non-Aligned
Movement never achieved the status of a truly independent bloc, although the
member states worked at the UN and other forums on core issues like
decolonization, development, and nuclear disarmament, with some successes
in the first area. The stated goals of India’s foreign policy under Nehru were
maintenance of international peace and security, promotion of self-
determination of all colonial peoples, opposition to racialism, peaceful
settlement of disputes, and securing voice and influence for emerging
countries of Asia and Africa.9
India under Nehru achieved a high international status for an economically
weak country, although with a long sense of culture and civilization, based on
soft power attributes and potential material power parameters. India’s
freedom struggle, mostly through non-violent methods under the leadership
of Mohandas Gandhi, attracted the liberal world’s admiration. The creation of
a democratic system with federal and secular foundations despite its high
diversity was a great achievement. India proved that democracy could work
in a multiethnic and pre-modern developing country, challenging existing
theories of democratic transitions and modernization. Nehru’s government,
partly under domestic economic compulsions, but partially due to an
idealistic bent, neglected defense, on which it spent a paltry 1.9 percent of its
GNP between 1950 and 1962, insufficient for defending two hostile fronts,
with China and Pakistan.10 However, similar to many newly emerging
countries, India showed a strident attitude on territorial matters and an
unwillingness to compromise with neighboring countries.
India’s independence, although achieved largely through peaceful means,
was bloodied by the partition of the subcontinent and the creation of Pakistan
with its two wings in the west and in the east separated by over 1,000 miles
of Indian territory. Partition generated deep-seated scars on the two states and
their relations. The massive bidirectional flow of refugees, numbering some
10 million, and the genocide-like violence perpetrated by Muslims, Hindus,
and Sikhs engendered intense feelings of hostility between the two states and
their peoples from the outset. The independence was followed by a short war
in Kashmir with Pakistan (1947–48), which saw some 40 percent of the state
falling into Pakistani hands and 60 percent to the Indian side. The Kashmir
conflict occurred because the princely ruler, Maharaja Hari Singh, first
dithered to join either India or Pakistan while the latter claimed the territory
owing to its large Muslim population. Facing the prospect of complete defeat,
resulting from an offensive by tribal forces into Kashmir with the support of
the Pakistani army, the ruler of Kashmir agreed to join the Indian union and
sought its armed intervention. The war, however, was inconclusive. It was the
beginning of a bitter conflict between the two South Asian states, producing
three more wars (1965, 1971, and 1999). The 1971 war was primarily
focused on the liberation struggle of East Pakistan. The rivalry has also seen
many crises and some efforts at peace, often producing little positive
results.11
India’s other conflict has been with the People’s Republic of China which
occurred after a short period of friendship based on Panchsheel (five
principles) of amity and cooperation between the two countries. The surprise
Chinese attack on Indian border posts in November 1962 in some key
locations of the 2,100-mile-long contested territory over the disputed
McMahon Line separating the two countries was a watershed moment for
Indian foreign policy. Nehru’s policy of forward defense and his
government’s earlier accordance of refugee status to the Dalai Lama and his
Tibetan followers contributed to the Chinese action, although it may well be
that the Chinese leaders viewed Nehru as a “lackey” of Western imperialism,
a challenger to their dominance in Asia and the emerging countries, and
wanted to teach India a lesson.12 The defeat in the war was a major shock and
demoralizing event for India. Nehru died in 1964 only to leave a weakened
country, yet one determined to build up its military and economic strength.
The war generated a brief period of Western military and economic aid to
India, especially under US president John F. Kennedy. By the mid-1960s
India acquired better military strength and began the green revolution in
agriculture, which increased food production under the leadership of Indira
Gandhi. Nehru’s immediate successor, Lal Bahadur Shastri (1964–66), faced
foreign policy challenges from Pakistan and China, the latter by way of
nuclear tests in 1964. In 1965 a short war was launched by Pakistan in which
Shastri’s government responded strongly, even though the war concluded in a
stalemate and both sides agreed to withdraw troops to previously held
positions after an agreement was reached at Tashkent in 1966, with Soviet
help. In 1971 war broke out again between India and Pakistan, this time in
response to the liberation struggle in East Pakistan and India’s active military
intervention.
India’s major challenge in the foreign policy arena involving the great
powers was in the nuclear weapons area. India dithered on its response to the
1964 Chinese nuclear tests for a decade, but by 1974 it had acquired a crude
weapon which the Indira Gandhi government tested at Pokhran in the Rajas-
than Desert, calling it a peaceful nuclear explosion. The international
response was intense condemnation, and the United States took the lead in
imposing sanctions on India which lasted until September 2001. The Gandhi
government, largely under pressure from abroad and owing to a lack of grand
strategic vision, left the Indian deterrent to hibernate. In 1989 Gandhi’s son,
Prime Minister Rajiv Gandhi, launched an active nuclear weapons
procurement program in response to Pakistan’s accelerated nuclear arms
development and his own failed efforts at global disarmament. After
wavering for a decade, in May 1998 India, under the right-wing government
of Atal Bihari Vajpayee, tested five nuclear devices and immediately
received additional sanctions for violating the spirit of the nuclear Non-
Proliferation Treaty (NPT) and Comprehensive Test Ban Treaty (CTBT),
although it had signed neither.13
 Prior to this, in 1991 India, under Prime Minister Narasimha Rao and his
finance minister Manmohan Singh, initiated an economic liberalization
program which began to improve India’s growth rates and international
profile with foreign investors who began to invest in large numbers, although
the extent was limited compared to that of China. The severe balance of
payment crisis India faced in the immediate post–Cold War era propelled the
reforms. The end of the Soviet Union and the socialist model also helped in
changing the ideational bases of Indian economic policies.14 These larger
changes also encouraged India to launch new foreign policy initiatives in its
own region, South Asia. The results have been mixed, with some successes
and some failures in making a dent on India’s fractious relationship with its
immediate neighbors.

THE SOUTH ASIAN DIMENSION

Within the South Asia region India’s relations have been one of limited
hegemony, although it is debatable whether it was ever able to achieve its
will on all crucial matters involving the smaller powers. India halfheartedly
supported the creation of the South Asian Association for Regional
Cooperation (SAARC) in 1977, but it has not been active in building up this
grouping into anything like the Association of Southeast Asian Nations
(ASEAN). India’s concern has been that the smaller states would bargain
hard for concessions since it borders all of them except Afghanistan and
occupies nearly 70 percent of South Asia. The enduring India-Pakistan
rivalry is another reason for SAARC not progressing to its full potential. The
South Asian states objected to India’s preponderance by erecting barriers, as
well as becoming vocal in their opposition to Indian dominance over crucial
bilateral issues. The weak states of South Asia also do not fully subscribe to
the norm of territorial integrity, and they tend to intervene in each other’s
internal conflicts.15 Some states allowed, or have been unable to control, anti-
India groups operating from their territories while India has also intervened in
the affairs of Sri Lanka, Nepal, Bangladesh, and Maldives in particular,
sometimes invited by the beleaguered regimes in those countries. India
occasionally displayed an enlightened approach in dealing with the smaller
neighbors. An example is the Gujral doctrine based on non-reciprocity.16 The
Manmohan Singh government (2004–14) also followed some of the friendly
policies showing better relations with smaller neighbors, especially with
Bangladesh. Regional cooperation has made incremental progress with the
signing of the South Asia Free Trade Area (SAFTA) in January 2004, which
is expected to eliminate customs duties in a phased manner, reaching 0
percent by 2016 for tradable goods among the eight-nation SAARC.
However, the potential for wide-ranging economic cooperation in South Asia
is yet to be fully exploited, although trade tariffs have been lifted by most
member countries.
Within the region, India had a testy relationship with Sri Lanka where it
initially supported the Tamil liberation movement, which it withdrew after
the Indian peacekeeping forces failed to quell the Tamil Eelam guerrillas and
Prime Minister Rajiv Gandhi was assassinated by them in 1991.17 The
complete defeat of the Tamil guerrillas in the bloody battles of May 2009
changed the dynamic in a major way. India had already concluded a free
trade agreement with Colombo in December 2008, and later introduced zero
customs duties on most products, which has substantially increased the
bilateral trade volumes. With Bangladesh, India has had a less than friendly
relationship over the division of river waters, as well as the massive illegal
migration from that country to border states like Assam, Bengal, and Tripura.
By 2010 the relations had improved much. India’s ties with Nepal have been
of a dominant-subordinate type, something many Nepalis resented, even
though this has also come under change after a decade-long Maoist uprising
in that country. New Delhi’s support for the democratic transition in Nepal
helped in improving relations. India has a strong benign hegemony over
Bhutan that has benefited economically from friendly ties with India. The
hydropower agreements and the annual financial aid from India have helped
to make Bhutan’s economy number one in South Asia in terms of per capita
income. Another smaller neighbor, Maldives, has maintained cordial relations
with India, although the island nation is undergoing changes due to pressure
from China and its own fractious internal politics.
India’s relations with Pakistan have been the most contentious, involving
all neighboring states. Even after sixty-five years this rivalry shows little
possibility of resolution. The rivalry is not only for Kashmir and the sharing
of river waters, but for regional status and maintenance of a balance of
power.18 Pakistan has aggressively pursued a very proactive military policy
that includes acquisition of nuclear and conventional weapons, as well as
alignment with great powers in an effort to obtain strategic parity with India.
Pakistan has also resorted to the use of non-state actors to challenge India’s
control over Kashmir since 1989. Pakistan-supported terrorists have also
struck within India, most notably in December 2001 attacking the Indian
parliament, and in November 2008 launching a mass attack on India’s
financial center, Mumbai, killing some 164 people and wounding 368.
Despite periodic peace talks, a genuine rapprochement has not been achieved
between the two South Asian rivals as many stakeholders act as spoilers
whenever the political elite start engaging each other seriously. The election
of the Nawaz Sharif government in May 2013 rekindled hopes that the peace
process would be resumed, but it is complicated by continuous tensions on
the border, as well as India’s general elections which produced an unstable
coalition government in Delhi.
India’s position on Afghanistan is very much part of the reasons for New
Delhi’s conflict with Pakistan. Afghanistan, prior to the rise of the Taliban,
maintained close ties with India as a supporter for its own disputes with
Pakistan. India backed the Pashtun cause from the late 1940s. During the
Soviet occupation of Afghanistan, New Delhi maintained an uncomfortable
neutrality because of its friendship treaty with the Soviet Union. After the
Soviet retreat, India supported the Northern Alliance, but when the Taliban
won the civil war with Pakistan’s support in 1996, India’s position became
very uncomfortable. India supported the Hamid Karzai government by way
of training Afghan security forces, offering developmental aid estimated at $2
billion a year, and expanding infrastructure. India watched the planned US
withdrawal in 2014 with much trepidation as a Taliban return to power will
undercut its investments in Afghanistan and undermine its security interests,
with Afghanistan once again becoming a springboard for terrorist groups that
also target India.

RELATIONS WITH THE LARGER ASIA-PACIFIC

Beyond the South Asia region, India has shown much interest in building its
relationships with the other states of Asia and beyond. The “Look East”
policy was first initiated in 1991 by Prime Minister P. V. Narasimha Rao’s
government—a policy which was actively pursued by his successor
governments, especially Vajpayee and Manmohan Singh. The policy
envisaged and produced substantial improvements in India’s economic,
strategic, and cultural ties with Southeast Asian countries which India had
neglected during the Cold War era. The ASEAN countries reciprocated this
policy by according India membership in the Asian Regional Forum (ARF)
and holding India-specific annual dialogues. Among the ASEAN countries,
Singapore, Malaysia, and Thailand developed major commercial links with
India. In fact, Thailand, Singapore, and Malaysia have concluded separate
free trade agreements with India in addition to the ten-nation ASEAN-India
free trade area that came into existence in January 2010 after seven years of
negotiations. The trade volume between the ASEAN countries and India
grew from a modest $2.9 billion in 1993 to $74.9 billion in 2011–12 and is
expected to reach $100 billion by 2015.19 Other Asian trading states, South
Korea and Taiwan, have developed extensive links with India in the
economic arena, and both have been active investors in the Indian economy.
Seoul has already concluded a free trade agreement with India which came
into force in January 2010.
India’s economic relations with China saw much upswing during the past
two decades. From a paltry $2.92 billion in 2000, it reached $66.57 billion in
2012, making Beijing the leading single trade partner for India.20 What is
surprising is the quantum increase in trade links occurring even when
political and strategic relations have not been warm. This relationship is not
without contention as China has a favorable balance of trade, with India
importing many manufactured goods and machine tools, while Beijing
imports Indian natural resources like iron ore. In line with its growing
economic aspirations and desire to obtain oil and gas, India has built strong
links with Central Asian, African, and Latin American countries. There has
been some competition and cooperation between China and India in the
development of new oil and gas resources in these countries.21
India’s relations with Japan show much promise. From estranged
democracies during and immediately after the Cold War, partly due to
Japan’s opposition to India’s nuclear tests, today both countries see major
improvements in economic and strategic ties. They have also conducted
military exercises and weapons transfers. Since 2006 they have engaged in
several summit meetings on both strategic and economic issues. Japan has
been a lead investor in India in the area of infrastructure development.
Moreover, Japan has slowly relaxed its opposition to India’s nuclear
program. During the past decade many Asian states, especially Japan and
ASEAN members, began to see India as a mature power and began to court it
for strategic or economic reasons. Today, India is viewed much more
positively by most of the great powers. It is common for the leaders of these
states to reaffirm India as a rising power or a great power when they visit
New Delhi. What are the bases of India’s claim?

INDIA AS A RISING POWER

Realizing its putative power capabilities, leaders from the days of Nehru
envisioned India achieving a leadership position in the world system. It is
debatable whether they assiduously worked for it similar to China, or if they
developed a plan to reach the goal in the short and medium terms. India’s
fractious democratic polity and the ideological hangovers dating back to the
anti-colonial struggle have been part of the challenge, but it is the
international and regional constraints that matter most. However, over the
past six decades India has developed a number of hard power capabilities that
are necessary ingredients for claiming great power status. India is perhaps the
leading contender for major power status in the developing world in the
twenty-first century due to its comprehensive national capabilities, defined in
both hard- and soft power resources. The hard power resources include
extensive military capabilities, economic resources, and technological and
demographic assets. The soft power assets include leadership in international
institutions, cultural appeal, democracy, secularism, and a federal polity.22
Moreover, India is geographically situated at a major strategic location, with
the Indian Ocean being crucial waters for the world’s oil transportation. In
addition, among most of the emerging powers, India has shown the highest
inclination, in terms of its elite and public positioning and in terms of its
invocation of its grand civilizational history, for the position of a major
power even if it is not aggressively pursuing that goal.
More concretely, what are the sources of India’s aspirations in this regard?
The prospects of an aspiring power to obtain great power status depend on
the availability of adequate hard and soft power resources, and their
utilization for the achievement of national objectives in a well-crafted
strategy. How does India fare in these dimensions of power and its exercise?

Hard-Power Resources
In terms of military power India has always been a pivotal player for the
security order in the larger Indian Ocean and South Asian regions. In recent
years it has made some major strides in broadening its reach beyond the
immediate region. In manpower, with 1.32 million regular troops, India holds
the third-largest armed forces after China and the United States. In terms of
conventional capabilities it has air, naval, and land assets that it can now
extend beyond the immediate South Asian region to a shorter periphery, such
as Southeast Asia and the Persian Gulf. It has acquired nuclear weapons and
delivery systems, including intermediate-range ballistic missiles (IRBMs)
that can reach major cities of China. The shorter-range Prithvi and Agni I and
II missiles are meant for deterrence against Pakistan, while the Agni III has a
reach of 3,000 kilometers that can offer a key deterrent toward China. In
2012 and 2013 it tested a 5,000-kilometer-range Agni V, an intercontinental
ballistic missile that can hit most of China, including Beijing. It is working on
even longer-range intercontinental ballistic missiles with a range of 10,000
kilometers, but it is unlikely to deploy or develop them in the near term due
to concerns about potential implications for relations with the United States.
India is also acquiring capabilities in the naval area such as nuclear
submarines, aircraft carriers, and air power that would extend its power
projection capabilities to the larger Asia-Pacific region. Moreover, if the
planned deployment of missile defense systems materializes, India may have
defensive capacities as well. In recent years, India has been on a major arms-
buying spree in its efforts to replace its aging fighter jets, aircraft carriers,
battlefield tanks, and other systems that will give it an edge in technological
capabilities vis-à-vis major regional rivals. Between 2008 and 2012, India
emerged as the world’s no. 1 arms importer partly because its domestic arms
industry is not fully able to meet the growing demand of its armed forces.23
In terms of economic power India is already the world’s fourth largest
economy in terms of purchasing power parity (PPP). It will become a leading
economy by the middle of the twenty-first century if its growth rate continues
at the present level. This outcome has been possible because of an annual
growth rate of 6 percent. If this trend continues, India’s GDP will double
every ten to twelve years or so. A quadrupling of the economy in the space of
thirty years could dramatically alter India’s power position, especially given
the prospect that many developed countries are unlikely to grow at that rate.
The possibility exists that in dollar terms the Indian economy could become
number three in the next decade, and number two by 2050.24 Since the mid-
1980s, India’s growth has been incremental, but it has accelerated during the
past seventeen years, only to decelerate to 5.5 percent or so by 2013 partly
because of a global slowdown. A growing capitalist class is emerging in India
which is making use of economic globalization fairly effectively. More
reforms in various areas could make Indian economic growth even bigger and
sustainable. This economic change has foreign policy, as well as strategic,
implications.
However, a dramatic opening of the economy, or the building up of a
strong manufacturing sector, or the adoption of an intensive export-driven
strategy like China’s is politically difficult for India. The fractious political
system and the requirements of coalition governments at the federal level
constrain India in adopting a blitzkrieg economic strategy. But India’s
development seems more stable and locally generated, relying on knowledge-
based industries which are likely to stay pivotal for growth in the twenty-first
century. If India can increase foreign direct investment (FDI) flows and
foreign trade, it may exceed China’s growth rate, expected to slow down
beginning next decade. India’s concentration on services has worked so far
given the availability of a skilled and semi-skilled workforce, but it has not
fully developed its manufacturing potential.
Technological assets are linked to both economic and military power, and
in India’s case these are most noticeable in the information and space arenas.
India’s space program has succeeded in placing different categories of
satellites in orbit and in developing and deploying multiple types of launch
vehicles. With the launch of the Polar Satellite Launch Vehicle (PSLV), India
has been able to place heavier remote-sensing satellites at higher altitudes. On
April 18, 2001, India used the GSLV (geosynchronized satellite launch
vehicle) to place a 1.53-ton communications satellite in orbit. In April 2008,
India launched ten satellites using a single launch vehicle. It sent a vehicle to
the moon in 2008 that brought back samples of water. In December 2013,
India succeeded in sending a small unmanned probe to Mars.25 India’s
emerging space capabilities will likely give it a key role in the future
international system, especially if space becomes militarized and there is
competition among the major powers for control of it. India is also a leading
power in the area of information technology (IT), which now accounts for 5
percent of the country’s GDP. In software development, application, and
exports, India has benefited much from the globalization process and the
interactions of Indian multinationals with their American counterparts.
 Demographic assets also provide India certain advantages and
disadvantages. India will have the largest population of working age in the
world during the next three decades or so. Between 2000 and 2020, India will
add 310 million people to its population. The median age of the Indian
population in 2013 was 26.7 to China’s 36.3.26 Although 25 percent of the
Indian population still lives in abject poverty, the low age of the working
population brings certain advantages. However, clear policy initiatives,
especially in education and poverty alleviation, are needed to bring this
population to productive use. Considerable social and economic disparities
exist in Indian society along caste, class, and gender bases, making it difficult
to use the population asset optimally.
In terms of soft power indicators, India’s position is significantly high in
some areas, while it has considerable potential in others. The key ingredients
of India’s soft power resources are its multiethnic culture, peace-generating
civilizational values (including religious and philosophical ideals), and
unique art forms and literature. More importantly, crucial values and ideas
that contemporary India possesses have great promise for managing
multiethnic societies, especially in the developing world. These arise from the
institutional structures that its first prime minister, Nehru, helped to instill in
India: democracy, secularism, federalism, and the three-language formula. As
the twenty-first century advances, India is slowly making use of its soft
power assets as the global media are paying much attention to it. However,
harnessing soft power resources effectively would require India to become a
more equitable society and a global economic power—that is, a state whose
economy commands a major share of the global wealth, especially global
trade and investment, but one that values fairness and equity.
One area where India has some strength is at the global institutional level.
Its membership in leading organizations of the world such as the G-20,
BRICS, and WTO gives it a unique opportunity to influence global
negotiations, especially on climate and trade talks. India has played a leading
role in world trade negotiations in the Doha Round, as well as in climate
change negotiations, along with China and Brazil, and has emerged as a veto
player, whose agreement is crucial to the conclusion of any such deals in the
future. At the UN, India has long been a very active provider of peacekeeping
forces. It is not a permanent member of the Security Council yet, but this
might be a continuing issue for India’s peaceful integration into the world
order.
 INDIA’S LINGERING CONSTRAINTS

India faces several constraints at the international, regional, domestic, and

perceptual levels in achieving a global leadership role in the near term. At the
international level, India’s late arrival as an independent state in 1947, two
years after the post–World War II order was finalized in San Francisco,
precluded a leading role in the UN system. The UN Security Council was set
up then with five permanent members who were allies in the winning
coalition of the war. That setup still continues because the leading powers, as
well as many developing countries in the Security Council, are unwilling to
alter the composition of the council. No systemic event has yet taken place to
upset the post–World War II order in terms of the structure of international
institutional governance. The Cold War rivalry caused India to avoid joining
alliances and led it to pursue a non-aligned policy that allowed it to somewhat
compensate for the immediate dearth of hard power resources. However,
India’s quasi-alliance with the Soviet Union during the 1970s and 1980s
precluded Western support for it to achieve a leading role.
Regionally, India has been constrained by the conflict with Pakistan and
China and the need to divide its military forces into two fronts. The on-and-
off alliance that the United States and Pakistan have formed, and China’s
continuing alliance with Pakistan have constrained India’s power position in
the region. The conflict in Kashmir has also consumed a considerable amount
of Indian attention, and it is still simmering partly due to Pakistan’s support
to Kashmiri groups seeking independence. In recent years, India has been
affected by the weak states populating its neighborhood, especially
Afghanistan, Pakistan, Bangladesh, Nepal, and Sri Lanka. All these states
have internal conflicts that have impacted India as well. Nepal has emerged
as a major source of security challenges to India through the Maoists
(Naxalites) who now form a corridor in India’s tribal belts from the north to
the south. Large-scale migration from Bangladesh has caused internal conflict
in Assam and Tripura as well.
The external challenges have been accentuated by the weak-state
syndrome of India itself. The Indian state has strengths in some areas, but it is
often called a “soft state” when dealing with pressing national problems.
Many parts of India, especially states such as Bihar, Rajasthan, Uttar Pradesh,
and Jharkhand, are similar to sub-Saharan Africa in terms of poverty levels
and the poor state of governance and infrastructure. The Naxalites control
much of the tribal belt land of central India, and the state’s inability to
integrate or suppress them generates high levels of internal violence. Terrorist
groups, some internal and others externally sponsored, cause much mayhem
in India. During the past several years India has registered one of the highest
numbers of terrorist incidents in the world. In 2012 alone there were some
805 deaths due to terrorism, with over 300 deaths by domestic terrorism such
as those perpetrated by Naxalite groups.27 The ability of the state to provide
public goods and services, especially in the security area, has been in decline
or stagnant despite the fact that the Indian state at every level has acquired
considerable resources in the globalization era.
India is yet to utilize its soft power resources effectively. Strategy and
diplomacy are crucial components of soft power to compensate for some of
the weaknesses in the hard power area. Moreover, effective utilization of
national power would require a proper grand strategy. Until recently, the
Indian elite avoided this subject due to the fractious nature of its domestic
politics. Grand strategy in contemporary times focuses not only on military
security, but on economic security as well. It attempts to increase the wealth
of the country since economic capability is equally important in gaining and
retaining a state’s power position. A grand strategy is often an intervening
variable in translating a state’s capabilities into actual power and influence in
the international system. India’s lack of a proper grand strategy may be due
to the need to accommodate divergent interest groups and political ideologies
within India.

CHANGING STRATEGIC CIRCUMSTANCES

By the year 2000, India’s strategic position had improved appreciably. Many
factors are responsible for this change. Most prominently, the United States
has increasingly perceived India’s potential in balancing China. It can be
argued that economic liberalization, sustained economic growth, favorable
changes to the strategic environment, nuclear tests and the declaration of a
no-first-use policy, and a measured response to Pakistani provocations have
earned India the status of a “mature regional power.” Arguably, through its
nuclear tests in 1998 India repositioned itself from a largely marginal player
in the international system to a serious candidate or contender for major
power status.28 The test allowed India to get out of its fence-sitter mode on
the nuclear weapons issue. Had it remained there, India would have been
clubbed along with Iran and North Korea by non-proliferation advocates. It is
true though that in the immediate aftermath of the tests India’s relations with
Pakistan deteriorated as the so-called stability-instability paradox entered the
strategic relationship between these two states.29
Despite the initial intense opposition by the major powers, all of them in
the end entered into a strategic or security dialogue with India. The reason for
India’s acceptance as a de facto nuclear power by the international
community is the realization among leading states that, with two nuclear
rivals and no membership in nuclear protected alliances, India may well have
different security dynamics from those other countries pursuing the nuclear
option. Moreover, India has behaved maturely in the nuclear proliferation
area by refraining from offering assistance to other states seeking nuclear
weapons. While India has thus elevated itself from a middle power to become
a candidate major power, as Mohammed Ayoob has stated, this has been
achieved without much forethought or strategic pre-planning.30 The strategic
dialogue with the United States and other major powers also has helped India
in clarifying its objectives, but greater levels of cooperation would require
concrete policy postures and advancements in capabilities.
Some incremental but crucial changes have taken place in India’s foreign
policy over the past two decades that reflect the economic and strategic
realities outlined above. The foreign policy changes are also driven by the
conviction of the Indian elite that they ought to make use of the favorable
economic and strategic circumstances in order to emerge as a leading world
power. These new attitudes are caused by changes in the international system,
as well as India’s internal confidence deriving from newfound economic
progress.31
There are multiple elements to the new foreign policy dynamism that India
has exhibited over recent years. The first is the deepening of the strategic and
economic relationship with the United States. Second is the effort to improve
relations with all other major powers. Third is the increased vigor in pursuing
the “Look East” policy toward its ASEAN neighbors and East Asian states.
Fourth is engaging with pivotal rising or resurging power centers such as
China, Russia, Brazil, and South Africa in order to form bargaining groups
that would strengthen India’s position in world trade forums and on other
issues. Fifth is India’s focus on economic diplomacy including a vigorous
search for new oil and gas sources in Africa and Latin America. Sixth, India
is building up its armed forces as well as military hardware even while
pursuing dialogue with neighboring states. And finally, it is continuing the
peace process with Pakistan and China, although major concessions from the
Indian side on the border issues are unlikely to come anytime soon, largely
because of the constraints operating in the fractious democratic polity.

Deepening Ties with the United States

The change in US attitude toward India began in the early 1990s when in
response to the Soviet collapse India began to adjust its foreign policy.
However, the nuclear issue intervened as a significant stumbling block. The
1998 nuclear tests by India caused a major furor in international relations,
and the US response was harsh, with Washington and its allies imposing a
series of sanctions on New Delhi. However, the United States and India
initiated a dialogue which eased many of the irritants. The 1999 Kargil
conflict was a watershed for India-US relations, especially when President
Bill Clinton sided with India and forced Prime Minister Nawaz Sharif to
commit to a withdrawal of Pakistani forces from the Kargil Hills on the
Indian side that the former had occupied. The Clinton visit to India in March
2000 was a major success, but it was the George W. Bush administration that
initiated major changes in US policy toward India, especially in the nuclear
area. The 1995 India-US nuclear deal that President Bush signed with Prime
Minister Manmohan Singh elevated India to the status of a de facto nuclear
weapon state while allowing it to engage in international nuclear trade. A
series of steps were undertaken, including India bifurcating its civilian and
military facilities, the Hyde Act which exempted non-NPT signatory India
from nuclear trade sanctions, and the 123 Agreement and the waivers from
the International Atomic Energy Agency (IAEA), as well as the Nuclear
Suppliers Group (NSG) in September 2008. In the post–September 11 world
the Indian perception of the United States has changed in a big way. The US
war on terror in Afghanistan against Islamic radicals is part of the reason for
the change. It is very plausible that had there been no September 11 attacks,
India-US relations would have matured even further. The need for Pakistan’s
support in the war in Afghanistan somewhat mellowed the level of
cooperation that the United States could develop with India.
A number of concrete steps have been taken to strengthen this
relationship. They include the joint exercises that Indian and US militaries
have conducted, several defense deals that made the United States one of the
leading sources of weapons for India, cooperation in the energy field, and
bilateral strategic dialogues. Several rounds of dialogue have been held at the
US secretary of state–Indian foreign minister levels. Two-way trade has also
seen a considerable increase over the years. It is not only US companies that
invest in India, but the reverse, with more and more Indian companies
bringing capital to the United States. The two-way trade in 2011 stood at $86
billion. These economic, strategic, and demographic reasons call for
optimism, with the latter variable emerging as very important in the coming
years. Indian technical students are populating all US graduate schools, and
Indian technology workers have been the largest recipients of H-1 visas for
several years. Some 40 percent of Silicon Valley is led by Indian expatriates
and companies with major India connections. They have emerged as a key
force in linking Indian and American knowledge-based economies. The
Indian diaspora is very active as a lobbying group in the United States and is
emerging as a powerful electoral segment. As economic and security links
have improved, the popular perceptions of Americans and Indians of each
other have also changed for the better. However, India’s foreign policy may
diverge on issues such as military action against Iran to forestall its nuclear
weapons program, as well as on global trade issues. The United States sees
India as a swing state along with Brazil, Indonesia, and Turkey. These are
states that are “large and growing economies, occupy central positions in a
region or stand at the hinge of multiple regions, and embrace democratic
government at home,” and “increasingly active at the regional and global
level, they desire changes to the existing international order but do not seek
to scrap the interlocking web of global institutions, rules, and relationships
that has fostered peace, prosperity and freedom for the past six decades.”32 A
string of US leaders have visited India and proclaimed that Washington
considers India as a major power and will make every effort to make this a
reality.33
India has also maintained strong ties with Russia, especially as its
traditional source of weapons acquisition. It is, however, difficult to see the
emergence of a deep strategic relationship as transpired during the Cold War
era even if Russia emerges as a global power once again. This is because
India has been diversifying its economic and military sources and Russia has
only very limited non-military and non-oil resources for India’s fast-
globalizing economy.
 With respect to China, India’s foreign policy has maintained an outward
cordiality, but there are ongoing tensions in relations. Over the past few
years, several border incidents of Chinese troop intrusions in disputed areas
have occurred which are not reported by the world media but are picked up
by the Indian media. These incidents reflect the continued rivalry that these
states have over territory, influence, and policies over Tibet, Pakistan, and the
emerging US-India relationship. China has also incurred Indian hostility by
affixing stapled visas for residents of Jammu, Kashmir, and Arunachal
Pradesh, the latter it considers as part of its extended territorial claim. As
China attempts to expand its military bases in Tibet and its economic and
potentially military outposts in the Indian Ocean rim countries such as
Bangladesh, Sri Lanka, Burma, and Pakistan, India is pressured to counter
such moves as evident in the increased activism by the two states in Burma.
The increasing economic links between China and India somewhat cushion
the rivalry from escalating to a full-fledged military competition, but this
could change.
While India has improved its engagement with the major powers, a
notable weakness of the Indian foreign policy approach has been the neglect
of its own immediate region, South Asia. This is an inevitable result of
India’s desire to transcend the region and not get mired in the quarrels of its
smaller neighboring states. The regional states are all weak countries with
multiple security, economic, and demographic challenges that spill over into
India. India is affected by internal and external Islamic terrorist cells that
have emerged in the region. There are indeed some changes in this policy,
largely the result of China’s increased activism in the Indian Ocean region.
Beijing has helped to build ports (Gawdar in Pakistan, Chittagong in
Bangladesh, Komagatta in Sri Lanka, and a few others in Myanmar),
although they are now used largely for commercial purposes. It has also been
active in building roads and infrastructure in Nepal, Myanmar, and Pakistan.
In response, India has stepped up infrastructure projects in these countries,
except Pakistan. The Indian Ocean littoral, including India’s South Asian
neighbors, will be a major locale for the competition between China and
India with an active presence of the United States in the years to come.

EXPLAINING FOREIGN POLICY CHANGE IN INDIA

It is intriguing from an international relations perspective what generates
change and continuity in India’s foreign policy behavior. Change in foreign
policy can be explained using theories at three levels of analysis pertaining to
systemic, state (internal), and individual factors. Systemic-level factors are
externally driven such as the end of the Cold War, or the rise of China and
the dominance of the United States. Internal factors could be the orientation
of the political and bureaucratic elite, as well as domestic economic
considerations. The absence of strategic elite thinking or a consensus to make
judgments on foreign policy issues could be an internal constraint.
Individual-level factors include leaders’ perceptions and their capacity to
make informal policy assessments and choices.
In India’s case, factors at all these levels have influenced or constrained
India’s foreign policy options. It must be remembered that the systemic and
sub-systemic factors act as underlying variables for foreign policy outcomes.
It is the domestic- and individual-level variables that shape the policy choices
in most critical dimensions. Yet the big changes in Indian foreign policy
cannot be attributed without reference to systemic and external variables such
as the end of the Cold War, as well as the intensified globalization
phenomenon in which India has actively participated. It must be recognized
that India has changed course from its earlier non-aligned posture to a player
willing to engage in limited balance of power. Even when there has been no
overarching strategic planning, some level of strategic formulation has
developed, especially under the governments of Manmohan Singh and his
predecessor, Vajpayee. There is something of a consensus among leading
political parties in India on the need to form limited alignments with Western
powers and Japan in view of the rise of China, even when there are still calls
from influential opinion makers in favor of adopting a modified non-aligned
posture.34 In the second decade of the twenty-first century, India has come a
long way from its isolation and is looked upon as a policy partner by most
Asian and Western powers.
Among the international relations theory perspectives, neo-classical
Realism explains India’s foreign policy behavior the best. According to this
perspective, systemic variables have to be factored through domestic-level
and individual-level variables in order to understand the particular foreign
policy choices of a country.35 Neoclassical Realists believe that the scope and
ambition of foreign policy are primarily determined by systemic factors and
the material capabilities of states vis-à-vis other actors. However, intervening
variables at the state and individual level affect the manner in which a state
formulates its foreign policy as well as responds to systemic opportunities
and constraints. Elite perceptions affect how they respond to foreign policy
challenges and opportunities. Thus, for neoclassical Realists, particular
national contexts matter for foreign policy outcomes more than structural
Realists account for.36 The end of the Cold War and the collapse of the Soviet
Union affected India like all other states in the world. This systemic event did
make the initial push for change in offering policy adaptation. India in
particular lost its patron, and this affected the Indian position and economic
situation. The closed economic model also showed its failure. However, the
manner in which India changed, and its lingering difficulties in coming up
with a concrete policy posture, suggests that domestic politics still matter in
how India responds to its new environment. India’s slow but steady
acquisition of capabilities, both military and economic, as well as its efforts
to acquire major power status suggest that systemic factors are working
behind these policy choices, although they often appear to be lacking in
cohesion or concerted effort.

FUTURE STRATEGIC TRAJECTORIES

In the next decade India is likely to pursue both limited hard-balancing and
low-cost soft-balancing strategies to achieve its security and economic
objectives. It is unlikely to conclude a deep alliance with any of the great
powers but may indeed pursue a somewhat limited coalition strategy even
when it is not stating so. The state of relations among the great powers is a
major variable in this approach. Although situations can change, and crises
can develop over Taiwan or in relations between Japan and China, the US
and China, or the US and Russia, the prospects of intense hard-balancing—
based on arms buildups and alliances—emerging in Asia anytime soon look
low. Hedging, economic balancing, limited hard-balancing, and soft-
balancing are all more likely strategies for states including India in the
foreseeable future. Countries are playing sophisticated strategic games in the
twenty-first century partly due to globalization and the difficulties of waging
interstate wars. A form of recessed general deterrence has taken root among
major powers as well. However, all the key states are likely to continue their
military and technological competition even when they do not expect a major
war. Much of it is hedging against future rivalries and aimed at preserving
their own leading role in the international system. India’s position is likely to
change if China steps up its offensive territorial strategy and engages in
military attacks or opts for a major escalation of conflicts on the Indian
border as well as in the Indian and Pacific oceans.
For concerned states, including the United States, India’s economic and
military development may be important for neutralizing China’s dominance
in Asia and beyond. While the full economic containment of China is
difficult, economic balancing may be possible. The sheer existence of
multiple economic powerhouses, such as India and Japan in Asia, may
mellow China, especially in the strategic arena. Tight Cold War–era-style
alignments are also unlikely to succeed because of the absence of intense
ideological competition among the great power states. During the Cold War,
the Soviet Union posed a fundamental threat to the West, and vice versa, as
the USSR was ideologically revisionist and was perceived as a major
challenge to the Western liberal order. Although China professes
communism, it does not yet pose a major ideological challenge to the West,
or to its Asian allies. China is also an intensely Westphalian sovereignty-
conscious nation and has little inclination to engage in regime change in other
countries. Without a direct Chinese military challenge, it is unlikely that an
intense balancing coalition will emerge toward it.
In the face of its regional challenges from Pakistan and China, India is
likely to expand its nuclear capability by doubling it to the two hundred
weapon range, but it is unlikely to go for an expansive nuclear force as some
critics fear. Considerable internal and external constraints exist to prevent
such a move. India may have little to gain by acquiring too many weapons,
unless it has a first-use posture. Doctrine and the strategic environment rule
that possibility out, at least for now. However, a steady expansion of naval
power by India is likely in the face of China’s growing capabilities and the
expected reduction of US projection capabilities in Asia.
Globalization is creating both opportunities and constraints for India and
other states in Asia. They have more money to arm, but fewer propensities to
wage wars as the costs of war are too high. In Asia, a partial stability has
emerged that is both deterrence based and economic interdependence based.
A kind of mixed Realist-Liberal world is emerging which is more complex
than the one during the Cold War era. More nuanced tools may be necessary
for states to tackle the multifarious problems they encounter. However,
increasing nationalism in China, and more belligerent actions by Beijing and
an active US response, could change the dynamics. India is also likely to
increase economic and security interactions with the United States, Japan,
Australia, and the ASEAN states. Much will depend on how India sorts out
its domestic politics. If inward-looking regionally or caste-based political
parties emerge as power holders in New Delhi, India may slide into a period
of global inactivity. However, coalition governments led by either the
Congress or the right-wing Bharatiya Janata Party (BJP) are most likely to
pursue vigorous foreign policy goals, especially if they are not constrained by
smaller coalition members as the Congress-led United Progressive Alliance
(UPA) was by the communists until recently.
To sum up, the rise of India is occurring, and it has been a major
beneficiary of the deepened globalization process in the post–Cold War era—
but myriad domestic difficulties constrain India from pursuing a blitzkrieg
strategy for obtaining its strategic or economic goals. It may well be a good
thing for the international order that rising India is not a revisionist power,
but one that seeks slow integration into the great power system while
emerging as a bridge builder between various centers of power, as well as
developing countries.

NOTES
1. Goldman Sachs Economics Research, “Ten Things for India to Achieve Its 2050 Potential”
(Global Economic Paper No. 169, June 16, 2008); National Intelligence Council, Global Trends 2030:
Alternative Worlds, http://www.dni.gov/index.php/about/organization/national-intelligence-council-
global-trends.
2. Soft balancing is a strategy using institutions, limited alliances or ententes, and economic
instruments to constrain the power of a threatening state. Traditional hard-balancing strategies involve
active and formal military alliances and/or intense arms buildups to constrain or balance the power or
the threatening behavior of an adversary. For more on this, see T. V. Paul, “Soft Balancing in the Age
of U.S. Primacy,” International Security 30, no. 1 (Summer 2005): 46–71; Robert A. Pape, “Soft
Balancing against the United States,” International Security 30, no. 1 (Summer 2005): 7–45.
3. On China’s rise, see David Shambaugh, China Goes Global: The Partial Power (New York:
Oxford University Press, 2013); Richard Rosecrance and Gu Guoliang, Power and Restraint: A Shared
Vision for the U.S.-China Relationship (New York: PublicAffairs, 2009); and David Kang, China
Rising: Peace, Power, and Order in East Asia (New York: Columbia University Press, 2007).
4. The strategy involves moving some 60 percent of the US naval forces to the Pacific from its
current 50 percent, stationing and rotating of additional troops such as 2,500 marines to a base in
northern Australia, and building a network of regional allies. It also envisages the creation of strategic
partnerships with India and Vietnam and enlarging the Pacific Ocean to include the Indian Ocean in
strategic terms, and not slashing military spending for the Pacific region even when the US defense
budget is reduced. On this, see “Pivot to the Pacific? The Obama Administration’s ‘Rebalancing’
Toward Asia” (Congressional Research Service Report, March 28, 2012),
http://www.fas.org/sgp/crs/natsec/R42448.pdf.
5. On this, see T. V. Paul and Mahesh Shankar, “Status Accommodation through Institutional
Means: India’s Rise and the Global Order,” in Status in World Politics, ed. T. V. Paul, Deborah Larson,
and William Wohlforth (Cambridge: Cambridge University Press, 2014), chap. 7.
6. For these figures, see Paul Kennedy, The Rise and Fall of the Great Powers (New York: Random
House, 1987), 149.
7. On the US policy toward Pakistan and India in the 1950s, see Robert J. McMahon, Cold War in
the Periphery: The United States, India and Pakistan (New York: Columbia University Press, 1994).
8. Dennis Kux, India and the United States, Estranged Democracies (Washington, DC: National
Defense University Press, 1992).
9. M. S. Rajan, Studies on India’s Foreign Policy (New Delhi: ABC Publishing, 1993), 220–22.
10. Raju G. C. Thomas, Indian Security Policy (Princeton, NJ: Princeton University Press, 1986),
185.
11. See T. V. Paul, ed., The India-Pakistan Conflict: An Enduring Rivalry (Cambridge: Cambridge
University Press, 2005); and Stephen P. Cohen, Shooting for a Century (Washington, DC: Brookings,
2013).
12. On this, see John W. Garver, Protracted Contest: Sino-Indian Rivalry in the Twentieth Century
(Seattle: University of Washington Press, 2001).
13. On this, see T. V. Paul, “The Systemic Bases of India’s Challenge to the Global Nuclear Order,”
Non-Proliferation Review 6, no. 1 (Fall 1998): 1–11; George Perkovich, India’s Nuclear Bomb
(Berkeley: University of California Press, 1999).
14. On India’s reforms, see Jagdish Bhagwati and Arvind Panagariya, Why Growth Matters (New
York: PublicAffairs, 2013); Baldev Raj Nayar, India’s Globalization: Evaluating the Economic
Consequences (Washington, DC: East-West Center, 2006).
15. T. V. Paul, ed., South Asia’s Weak States (Stanford, CA: Stanford University Press, 2011).
16. The doctrine propounded by former prime minister Inder Kumar Gujral when he was external
affairs minister during 1996 contained five principles: India will not seek reciprocity with its smaller
South Asian neighbors such as Bangladesh, Bhutan, Nepal, Maldives, and Sri Lanka; the countries shall
not allow their territories to be used against another country; they shall not interfere in each other’s
internal affairs; they shall respect each other’s territorial integrity and sovereignty; and they shall settle
their disputes through peaceful bilateral negotiations. On this, see “Opinion: Gujral Doctrine,” Calibre,
December 4, 2012, http://thecalibre.in/in-depth-current-affairs/opinion-gujral-doctrine/122012/?
p=2344.
17. Sankaran Krishna, Postcolonial Insecurities: India, Sri Lanka, and the Question of Nationhood
(Minneapolis: University of Minnesota Press, 1999).
18. For the various causes of this rivalry, see T. V. Paul, The Warrior State: Pakistan in the
Contemporary World (New York: Oxford University Press, 2014), chap. 4; Paul, The India-Pakistan
Conflict; Cohen, Shooting for a Century; T. V. Paul, “Why Has the India-Pakistan Rivalry Been So
Enduring? Power Asymmetry and an Intractable Conflict,” Security Studies, 15, no. 4 (October–
December 2006): 600–30.
19. “ASEAN-INDIA Dialogue Relations,” http://www.asean.org/asean/external-
relations/india/item/asean-india-dialogue-relations.
20. “India-China Bilateral Relations,” Embassy of India, Beijing, China,
http://www.indianembassy.org.cn/DynamicContent.aspx?MenuId=3&SubMenuId=0.
21. Chris Alden, “China in Africa,” Survival 47, no. 3 (Autumn 2005): 147–64.
22. For these, see Baldev Raj Nayar and T. V. Paul, India in the World Order: Searching for Major
Power Status (Cambridge: Cambridge University Press, 2003). On India’s search for major power
status, see Stephen P. Cohen, India: Emerging Power (Washington, DC: Brookings Institution, 2002);
David Malone, Kanti P. Bajpai, and Harsh V. Pant, eds., India’s Foreign Policy: A Reader (New Delhi:
Oxford University Press, 2013); Henry R. Nau and Deepa M. Ollapally, eds., Worldviews of Aspiring
Powers (New York: Oxford University Press, 2012).
23. Paul Holtom, Mark Bromley, Pieter D. Wezeman, and Siemon T. Wezeman, “Trends in
International Arms Transfers, 2012,” SIPRI Fact Sheet, March 2013.
24. Goldman Sachs, “Ten Things for India to Achieve Its 2050 Potential.”
25. Shyamantha Asokan, “India’s Mars Mission Leaves Earth’s Orbit, Surpasses Chinese
Ambitions,” Christian Science Monitor, December 2, 2013.
26. Central Intelligence Agency, World Fact Book, 2013.
27. US Department of State, Country Reports on Terrorism 2012, Washington, DC, May 2013,
http://www.state.gov/j/ct/rls/crt/2012/209983.htm.
28. Nayar and Paul, India in the World Order.
29. Paul Kapur, Dangerous Deterrent: Nuclear Weapons Proliferation and Conflict in South Asia
(Stanford, CA: Stanford University Press, 2007); Vipin Narang, “Posturing for Peace? Pakistan’s
Nuclear Postures and South Asian Stability,” International Security 34, no. 3 (Winter 2010): 38–78.
30. Mohammed Ayoob, “Nuclear India and Indian-American Relations,” Orbis 43, no. 1 (Winter
1999): 59–74.
31. On India’s foreign policy adaptation, see C. Raja Mohan, Crossing the Rubicon (New York:
Palgrave Macmillan, 2003).
32. National Bureau of Asian Research, “India as Swing State,” July 2013,
http://www.nbr.org/downloads/pdfs/outreach/NBR_IndiaCaucus_July2013.pdf.
33. The most clear-cut articulation was by the George Bush administration. See Secretary of State
Condoleezza Rice, “Remarks with Indian Foreign Minister Natwar Singh,” Hyderabad House, New
Delhi, India, March 16, 2005, http://2001-2009.state.gov/secretary/rm/2005/43490.htm; “US to Help
India Grow as Major World Power,” Daily Star, March 27, 2005,
http://archive.thedailystar.net/2005/03/27/d50327011818.htm.
34. Nonalignment 2.0: A Foreign and Strategic Policy for India in the Twenty-First-Century, New
Delhi, Center for Policy Research, 2012, http://www.cprindia.org/workingpapers/3844-nonalignment-
20-foreign-and-strategic-policy-india-twenty-first-century.
35. For this perspective, see Steven E. Lobell, Norrin M. Ripsman, and Jeffrey W. Taliaferro, eds.,
Neoclassical Realism, the State and Foreign Policy (Cambridge: Cambridge University Press, 2009).
For an application to India, see T. V. Paul and Mahesh Shankar, “Foreign Policy Making in India:
Looking for Theoretical Explanations,” in Shaping India’s Foreign Policy: People, Politics and Places,
ed. Amitabh Mattoo and Happymon Jacob (New Delhi: Har-Anand Publishers, 2010), 46–77.
36. Gideon Rose, “Neoclassical Realism and Theories of Foreign Policy,” World Politics 51, no. 1
(October 1998): 144–78. See also Fareed Zakaria, From Wealth to Power: The Unusual Origins of
America’s World Role (Princeton, NJ: Princeton University Press, 1998).
 Chapter Eight
Japan’s Role in Asia
Searching for Certainty
MICHAEL GREEN

In his late Tokugawa-era essay, A Discourse by Three Drunkards on

Government, Nakae Chomin imagines a master drinker leading two friends
through an evening of inebriated debate about Japan’s future course in Asia.
One of his drinking partners is a “gentleman of Western learning” who wears
European clothes and extols the virtues of democracy, individual rights, and
economic development. The other wears the feudal garb of a samurai and
argues for a realpolitik strategy of military expansion to supplant China and
rival Britain as the dominant imperial power in Asia. In the end, the master
drinker concludes that Japan must balance both courses, embracing Western
learning and economic development while simultaneously expanding
Japanese power in Asia. Yet this synthesis leaves the reader well aware of the
unresolved tensions between these two visions of Japan’s future that emerged
in the period between the arrival of Commodore Perry’s Black Ships and the
Meiji Restoration.1

THE SEARCH FOR STRATEGY

Few nations in history have been more racked with self-doubt about their
national strategy than Japan. Fewer still have held so tenaciously to their
national interests or been more acutely aware of the power relations around
them. For Japan, the drivers of national strategy have essentially been the
same since the time of A Discourse by Three Drunkards on Government:
pursuing autonomy and respect in the international system based on
calculation of the geopolitical strength of China (with Korea as the trigger)
and accommodation to the prevailing international power structure.2 Yet as
consistent as these drivers have been throughout modern Japanese history, the
tools used have varied dramatically. Indeed, Japan has reinvented itself at
various periods in history to maximize its sources of national power and its
relative autonomy in the context of the international system at the time. At
times Japan has gone the way of the Western gentleman of learning; at other
times, the way of the man of tradition.
The Meiji oligarchs at the end of the nineteenth century based their
strategy on the four-character slogan fukoku kyohei, or “rich nation/strong
army,” using Western learning to build national wealth and from that a
modern army and navy. The results were astounding; from 1860 to 1938
Japan’s share of global GDP only rose from 2.6 percent to 3.8 percent, yet
Japan asserted itself as a contender for dominance of half the globe.3 Japan’s
defeat of China in 1895 and Russia in 1905 inspired young nationalists and
anti-imperialists across Asia, and Japanese strategic thinkers espoused an
idealistic panAsianism based on Japan’s own experience of wakon/yosai, or
“Japanese spirit and Western learning.” That pan-Asian idealism soon gave
way to a much more coercive imperial order based on a traditional Asian
hierarchy and a dangerous brew of racial insecurity toward the West and
oppressive superiority toward nations of the East. Japan also made the
mistake of aligning itself with Nazi Germany in a misreading of the trends in
the international power structure. The result was calamity for Japan and for
Asia.
After the war, Japan was forced to accommodate to a new international
power structure under the American imperium and realigned its institutions to
maximize Japanese power and autonomy within that new context. Under the
masterful post-war prime minister Yoshida Shigeru, Japan embraced the
institutions of democracy and established an alliance relationship with the
United States, while ensuring that the pacifist Article 9 of the Japanese
Constitution was institutionalized in domestic law and policy as a brake
against entrapment in US Cold War strategy. Japan pursued the minimal
defense buildup necessary to retain the US defense commitment while
focusing on economic recovery and the pursuit of a new relationship with
Asia— including communist China—based on trade.
By the end of the Cold War, many Japanese strategic thinkers began to
argue that Japan’s new model of economic growth had surpassed traditional
capitalism and would position Japan as a dominant player in the twenty-first
century, free to pursue “independent” foreign policies and shape a new Asian
economic order without traditional military tools, while allied with the
world’s sole greatest power but not dependent upon it. However, this vision
was dashed in the 1990s as Japan was paralyzed by inaction during the Gulf
War, bereft of a credible economic model after the collapse of the bubble,
unable to use economic interdependence to shape China’s rapidly expanding
strategic and military reach, and threatened by a North Korea bent on
developing nuclear weapons. After almost a decade of drift and uncertainty,
Japan began to regain its confidence with Prime Minister Koizumi Junichiro
(2001–6) and to capture international attention with a new assertiveness in
international security and a relaxation of traditional post-war constraints
related to Article 9 of the Constitution. Koizumi’s successors did not have his
political magic, though, and six prime ministers from two different parties
fell from power between 2007 and 2012 before Koizumi’s own lieutenant and
first successor, Shinzo Abe, returned from the political wilderness to
reestablish a stable conservative government. “Japan is back,” he declared in
Washington, D.C., in February 2013, asserting that “Japan is not, and will
never be, a Tier-Two country.”4
Japan’s search for strategy in the post-war era has both confounded and
enriched theories of international relations. Traditional structural Realists
such as Henry Kissinger and Herman Kahn have argued that it is unthinkable
that Japan could develop economic power without eventually establishing
commensurate military power, including nuclear weapons.5 Constructivists
like Peter Katzenstein have developed generalizable theories around the
example of Japan by arguing that Japan’s political culture has indeed changed
as pacifism has been reinforced through post-war norms and institutions
based on Article 9 of the Constitution.6 Revisionist theories of international
political economy thrived in the 1980s and early 1990s on the idea that Japan
had, in fact, developed a new model of techno-nationalist economic growth
and production networks in Asia.7 Richard Samuels and Eric Heginbotham
returned to Realist theories of international relations to argue that Japan’s
behavior was Realist, but based on a new “mercantile” Realism rather than
traditional military-centered concepts of neo-Realist theory or more recent
variations of economic theory.8
I argued in Japan’s Reluctant Realism in 2001 that Japan’s strategic
culture was shifting from traditional pacifism and passivity toward more
pronounced balance of power behavior in response to rising external threats
and the failure of traditional economic tools to enhance security.9 In his
important study of the history and revival of Japanese strategic thinking,
Kenneth Pyle argued convincingly in 2007 that Japan has always been Realist
and is returning to its roots in many respects as it asserts itself again in Asia.10
What emerges from these various studies of Japanese strategic thinking is
an unmistakable trail of trial and error and exploration of tools that allow
Japan to maximize its autonomy and power in light of two drivers noted
earlier: calculation of the geopolitical strength of China (and Korea) and
accommodation to the prevailing international power structure. Yet Japanese
institutions and norms remain sticky and inflexible, confusing the search for a
new strategy even as Japanese leaders attempt once again to realign their tool
kit as the geopolitics of Asia enter a period of flux.
The remainder of this chapter unbundles that tool kit, assessing what has
and has not worked for Japan in Asia today and what elements are most
likely to characterize Japanese strategy in the years ahead. The chapter is
divided into five sections. The first begins with an examination of the tools
that were thought most promising in the late Cold War era—close relations
with China and economic leadership in bringing a new order to the region—
and how failure in those areas changed Japanese strategy and the use of these
tools today. The second section examines the complexities of Japan’s alliance
with the United States, and the reasons for growing convergence between
Washington and Tokyo instead of the divergence that many expected with the
demise of the Soviet Union. The third section explores the Japanese
balancing strategy in Asia in the post–Cold War era. The fourth section
examines Japan’s strategy for shaping regional integration and institution
building. The fifth section reviews the unfinished business of history, why it
is difficult for the Japanese elite to resolve, and where it does and does not
undercut Japanese influence. Finally, the chapter concludes with a review of
the variables that could lead Japan in a different direction with a different tool
kit than the one examined here.

CHINA

When Japan emerged from the ruins of the Second World War and prepared
to reenter the community of nations, the conservative elite advanced different
ideas about what role a newly democratized Japan would play. Some former
bureaucrats from the Ministry of Commerce and Industry, like Kishi
Nobusuke, wanted to align closely with the United States in the struggle
against communism, even cooperating after the Korean War to turn Japan
into an arsenal for Asia. Others, like Democratic Party leader Hatoyama
Ichiro, wanted to establish greater independence from the United States by
signing a peace treaty with Russia (still not signed to this day) and revising
Japan’s Constitution. Still others wanted to eschew any military buildup that
might lead Japan down the road to war again. Pulling these disparate camps
together into a ruling coalition fell to Yoshida Shigeru, who defined a simple
strategy for Japan that brought all conservatives under one tent and assured
they would dominate politics and marginalize the socialists and the
communists for the next half century.
Beneath that broad conservative tent, however, were different ideas about
Asia and specifically China. Yoshida established the mainstream view, which
was based on a prescient assumption that communist China would eventually
wean itself from the Soviet Union and grow closer to Japan based on
commerce. While “anti-mainstream” conservatives continued to favor the
Republic of China on Taiwan, Yoshida’s protégés ensured that Japan avoided
any involvement in the security of Taiwan or confrontation with Beijing as a
proxy of the United States. Prime Minister Sato Eisaku agreed in a joint
statement with President Nixon that Japan had an interest in the stability of
the Taiwan Strait in 1969, but only because he had to do so in order to win
Nixon’s commitment to return Okinawa to Japanese sovereignty. There was
no follow-up in defense or foreign policy strategy. Indeed, throughout that
same period, Japan quietly expanded economic relations with China through
the semi-official “L-T” (Liao Chengzhi and Tatsunosuke Takasaki) trade, and
after Kissinger’s 1972 visit to China, Japanese prime minister Tanaka Kakuei
immediately normalized relations with Beijing (a full seven years before
Washington did in 1978).
That same year Japan and China signed a Treaty of Friendship that
initiated Japanese yen loans, which Tokyo interpreted as aid and Beijing as
compensation for Japan’s war with China (amounting to over US$1 billion at
their peak in the early 1990s). Japan also worked as a broker to help China
and the West reengage after the June 4, 1989, Tiananmen incident, breaking
out of the West’s sanctions regime set at the 1990 Houston Summit.
Yoshida’s predictions were uncannily accurate, and intellectuals in Japan
began arguing for a more “balanced” trilateral relationship among Beijing,
Washington, and Tokyo.
In the mid-1990s, however, Japan’s relations with China suddenly began
to change. Yoshida was right about the degree of Sino-Japanese economic
interdependence, but he failed to anticipate how difficult it would be to
harness that interdependence to shape Chinese behavior. The turning point
came on May 15, 1995, when China tested nuclear weapons at the Lop Nor
facility. Japanese diplomats warned that Sino-Japanese economic relations
and yen loans could be put at risk by the tests, and Japanese political parties
of all stripes were critical of Beijing. But the tests proceeded. In March 1996
China bracketed Taiwan with missiles. Japan and the United States in April
of that year reaffirmed the US-Japan alliance in a joint security declaration
between Prime Minister Hashimoto Ryutaro and President Bill Clinton, and
Tokyo agreed to revise its defense guidelines to plan not only for the Cold
War contingencies of a direct Soviet attack on the Japanese homeland, but
also for “situations in the area surrounding Japan that have a direct effect on
Japan’s security.” Over the course of the next decade, Sino-Japanese rivalry
became an unmistakable feature of Asian international relations.
The experiences of the mid-1990s taught the Japanese public and elite
how uncertain Chinese intentions were and how ill-equipped Japan was to
shape Chinese behavior: economic tools were less effective than expected
and China’s economic growth was rising to double digits at a time when
Japan was in sustained deflation and unlikely to break 2 percent growth per
year under the best scenario. Specific military and diplomatic threats also
grew over the next decade. Japan’s defense white paper steadily elevated its
warnings about China’s military buildup, noting in 2007 that China holds a
“significant number” of IRBM/MRBMs (intermediate-range ballistic
missiles/medium-range ballistic missiles) that could target Japan, including
DF-3 and DF-21, in addition to programs to develop cruise missiles, new
submarines, and a rapidly increasing inventory of fourth-generation fighters
including the J-10, Su-27, and Su-30.11 A Chinese submarine
circumnavigated Japan in 2004 and then entered Japanese territorial waters in
2005, and three Chinese destroyers aimed their deck guns at Japanese P-3C
patrol planes that were sent to monitor their activities around the disputed
Senkaku/Diaoyutai Islands in 2005.12 On the diplomatic front, Chinese
diplomats fanned out across Asia and Africa in 2005 to lobby against Japan’s
bid for a permanent UN Security Council seat based on the “consensus” that
Japan had failed to atone for its crimes from the Second World War.
Changes in Japanese domestic politics have both complicated and been
propelled by these developments. The Sino-Japanese relationship during the
Cold War was held in place by the mainstream factions of the Liberal
Democratic Party (LDP), particularly the faction of Prime Minister Tanaka
Kakuei, which dominated the party from 1972 until 1993 and sustained a
largely non-ideological focus on developing the Japanese economy. The
structure of Japanese politics reflected the structure of the Cold War, and
with the collapse of the Soviet Union, the Japanese left quickly declined and
the once mainstream Tanaka faction steadily lost ground to a younger
generation of conservative politicians in both the LDP and the new
opposition Democratic Party of Japan (DPJ) who favored the assertive and
unapologetic policies of Hatoyama and Kishi. For this new generation,
standing up to China has become a matter not only of national security, but
also national identity.
China, too, has struggled with a Japan that it did not anticipate. From a
Chinese perspective, the 1978 Treaty of Peace and Friendship was supposed
to lock the bilateral relationship in place based on the verdict of the Tokyo
War Crimes Tribunal and the Allies’ agreements at Yalta and Potsdam. As
Chinese president Jiang Zemin said during a disastrous visit to Tokyo in
October 1998, it was not a matter of accepting Japanese apologies, but for
Japan to retain a contrite position forever.13 Indeed, after the 1978 treaty,
Beijing found that it could mobilize the left and center-left in Japan to oppose
efforts at revising textbooks or official visits to the Yasukuni Shrine, which
honors Japan’s war dead (including thirteen Class A war criminals). But as
President Jiang found during his visit to Tokyo in 1998, the mainstream was
shifting away from China, and the more Beijing pressed for restraint on
sensitive historical issues, the more the Japanese public supported a resolute
prime minister who would carry forward in spite of Chinese pressures. The
ability of the two governments and political systems to manage these issues
hit its nadir in 2005–6. Prime Minister Koizumi came into office in 2001
without an anti-China agenda and took an early trip to the Marco Polo Bridge
where the Sino-Japanese War began in 1937 to express his regret. But he also
promised the Japanese Bereaved Families Association (Izokukai) in a tearful
meeting that he would go to the Yasukuni Shrine to pay respects to their lost
relatives from the war. The Chinese were furious, and President Hu Jintao
tried to convince Koizumi not to go when the two met at the margins of the
Bandung Summit in 2005.14 But Koizumi promised only to do the
“appropriate thing”—which meant that he eventually visited the Yasukuni
Shrine. Hu responded by publicly declaring that he would not have a bilateral
summit with Koizumi until the Japanese prime minister promised not to visit
the shrine. A majority of Japanese, even many who did not approve of the
shrine visits earlier, resented this Chinese pressure and supported Koizumi’s
visits.15 When Chinese mobs attacked the car of a senior Japanese VIP after
Japan defeated China in the 2005 Asia World Cup match, the Japanese
public’s sense of being the victim only increased.
Koizumi’s final visit to Yasukuni as prime minister came on August 15,
2007, the anniversary of Japan’s surrender and a highly sensitive date for all
of Japan’s wartime enemies and victims. Ironically, however, this opened the
door for his successor, Shinzo Abe (who was more hawkish on China than
Koizumi had ever been), to reach a new rapprochement by traveling to
Beijing on October 9, 2007, where he was warmly received by a Chinese
leadership that had grown nervous about the sudden deterioration of Sino-
Japanese ties and saw in Abe a chance for a new beginning. Hu wisely chose
not to press Abe publicly to stay away from Yasukuni, just as Abe wisely
chose not to promise his domestic constituents that he would go.16 Abe’s
successor, Fukuda Yasuo, and China’s president Hu Jintao exchanged state
visits in early 2008. These further improved the atmosphere between the two
nations, but not the underlying sources of strategic, ideational, and military
tension.
In fact, the structural causes of Sino-Japanese rivalry were still well
entrenched, as a series of crises between the two countries in the second
decade of the twenty-first century over control of the East China Sea
demonstrated. Both Japan and China claim the Senkaku (Diaoyutai in
Chinese) Islands in the East China Sea, but Japan has retained effective
administrative control since the reversion of Okinawa from the United States
in 1972. China has increasingly tested that control with incursions of fishing,
maritime patrol craft, and occasionally PLA Navy and Air Force ships,
planes, and drones. On September 7, 2010, a Chinese fishing boat collided
with a Japanese coast guard cutter in the waters near the Senkakus, and for
the first time in such an incident the Japanese side detained the crew, captain,
and ship. Beijing responded ferociously, cutting off rare earth metal exports
to Japan; detaining four Japanese businessmen for allegedly entering a
restricted military area without permission in Shijiazhuang, Hebei Province;
and halting all diplomatic, tourism, and cultural exchange. When the
Japanese government announced it would purchase three17 of the Senkaku
Islands from a private landowner a year later, ostensibly to forestall
nationalist Tokyo governor Ishihara Shintaro from buying them first, Chinese
incursions by maritime patrol craft increased to the point where there were
daily thrusts and counterthrusts by the two coast guards into the region,
usually with Japan Maritime Self-Defense Force (JMSDF) and PLA Navy
surface action groups just over the horizon. Subsequent news of Chinese
cyber-attacks and Chinese ships locking fire control radar on their Japanese
counterparts intensified the confrontation, with the Japanese Ministry of
Defense declaring in its 2013 defense white paper that China was trying to
change the status quo by force, and warning that Japan should be ready to
defend its territory against future contingencies.18
This era of “warm economics and cold politics” has defied international
relations theory, and yet it characterizes the likely state of Sino-Japanese
relations for some time to come. The greatest irony is that Japan’s economic
recovery in 2004–6 after years of struggling with deflation required both
Koizumi’s reforms and a surging Chinese economy to absorb Japanese
exports that eventually went to the United States after final assembly in
China. Sino-Japanese trade began surpassing Japan’s trade with the United
States in 2005, and statistics by the Japan Bank for International Cooperation
indicate that Japanese executives continue to see China as their primary target
for direct overseas investment, despite some diversification of investment to
Southeast Asia as a hedge.19 Yet Japanese public opinion of China has barely
improved after plummeting from the positive views held of China during the
golden years of the 1980s (see figure 8.1). In 2012 Japanese government
surveys, only 18 percent of Japanese said they had positive feelings toward
China.
 The psychological, military, and diplomatic challenges posed by China’s
sudden rise and uncertain future are inescapable for Japan. Asia retains its
hierarchical pull, and Japan and China have never been powerful at the same
time the way they are today. Chinese and Japanese aspirations also collide.
Both nations are motivated by a profound sense of incompleteness. China
seeks territorial integrity and a return to its central role in the region, but it
confronts a Japan that seeks to move beyond the post-war period and to
reestablish lost national pride. Japan’s economic interdependence with China
provides stability to the two countries’ bilateral relations, but not a certainty
or predictability about where they will head.

THE KOREAN PENINSULA

Just behind China as the regional variable that most affects Japanese foreign
policy strategy is the Korean Peninsula. Meiji oligarch Yamagata Aritomo
famously referred to the Korean Peninsula as a “strategic dagger aimed at the
heart of Japan.” Korea was the traditional route for all things that flowed
from continental Asia to Japan, including Buddhism, Chinese characters,
Mongol invaders, soba noodles, and probably even sushi (though the last is
still contested). It was the tension between the pro-Japan modernizers and the
pro-China traditionalists in the Korean court that led Japan down the path to
war with China in 1894–95, and it was Russian expansion into Manchuria
and toward Korea that led to the 1904–5 Russo-Japanese War as Japan
sought the “line of maximum advantage” to protect its interests on the
peninsula. The outbreak of the Korean War in 1950 did more than any other
post-war event to establish Japan’s current foreign policy trajectory,
including the first US-Japan alliance in 1951, not to mention launching
Japan’s economic recovery. Throughout the Cold War, Japan was quick to
dispatch emissaries to Washington to sustain US support for a military
presence on the Korean Peninsula, most notably in the wake of president-
elect Jimmy Carter’s pledge in 1976 that he would pull all US troops out of
South Korea.20
But even as Japan worked to maintain a US defense commitment to South
Korea, successive Japanese governments also strove to establish their own
relationships on the peninsula in diplomatic and commercial terms.
Diplomatic relations were established with Seoul in 1965 together with a
significant Japanese aid package. North Korea proved more difficult, but as
Japan emerged from the Cold War with a strong economy and a hope that
bipolar tensions in the international system would contribute to a resolution
of issues with Pyongyang, there was a euphoria about normalization of ties.
Motivated by an estimated $600 million in annual remissions to North
Koreans in Japan (much of which found its way into politicians’ accounts in
Tokyo) and by the chance to show independent Japanese diplomatic
initiative, LDP strongman Kanemaru Shin visited North Korean leader Kim Il
Sung in 1990 and emerged from a meeting with him pledging to stake his
political life on the goal of full normalization in a tearful press conference.
Japan-DPRK (Democratic People’s Republic of Korea) normalization talks
have been on again and off again ever since. But the euphoria of the
Kanemaru visit did not last for long.
The changing nature of the North Korean threat to Japan became apparent
in 1993 when a US National Intelligence Estimate (NIE) was leaked, which
assessed that Pyongyang may already have enough plutonium for a bomb,
and then in 1994 when Pyongyang launched a Nodong missile over Japan (at
the time the public thought it had landed in the Sea of Japan). Domestic
political restructuring in Japan also had an effect. Many of the same LDP old
guard leaders who had been holding together Japan-China relations were also
the ones, like Kanemaru, who had been working on North Korea, backed by
the Japanese Socialist Party. Their demise, including the arrest of Kanemaru
on corruption charges and the collapse of the socialists, left North Korea
policy open to a younger and more nationalistic group of politicians. One of
those politicians was Shinzo Abe, who rose to prominence as Koizumi’s
lieutenant and an advocate of a tougher line on North Korea. Abe’s hard-line
view on North Korea was popular with a public that had watched North
Korea deploy two hundred Nodong missiles aimed at Japan, sell
methamphetamines to Japanese kids, test a long-range Taepodong missile
over Japanese airspace in 1998, and then nuclear weapons in October 2006.
The most emotional issue of all was the confirmation that dozens of Japanese
citizens had in fact been abducted by North Korean agents in the 1970s and
1980s even though the Japanese government had been denying there was
proof. When Prime Minister Koizumi succeeded in winning the release of
five of the abductees after a dramatic visit to Pyongyang in September 2002,
the stories the returning Japanese citizens told infuriated the Japanese public
even more. Today, 87.6 percent of Japanese continue to view the abduction
issue as their biggest concern about North Korea—ranking nuclear and
missile issues below by a wide margin.21
The Japanese view of North Korea has been a critical driver of Japan’s
foreign policy strategy in the beginning of the twenty-first century, but many
Japanese conservative elites view the North Korean threat as a useful proxy
to shake the public out of its pacifist complacency and prepare for longer-
term competition with China without having to make difficult choices on
issues such as missile defense or US-Japan defense cooperation that would
lead to open confrontation with Beijing.
Japan’s relations with South Korea have defied that same careful strategic
calculation. Relations between these two democratic allies of the United
States began to improve significantly after Japanese prime minister Obuchi
Keizo offered remorse and apology to South Korean president Kim Dae Jung
in Tokyo in 1998 and Kim accepted the apology (something that the Chinese
president had been unwilling to do a few months earlier, leading Obuchi to
only express “remorse” to Jiang). The US-Japan-ROK Trilateral
Coordination and Oversight Group (TCOG) established by US special envoy
for North Korea William Perry also cemented Japan-Korea ties on North
Korea policy in 1999. Japan and Korea also launched negotiations on a free
trade agreement (FTA) in this same period.
 Given Japan’s growing sense of competition with China and threat from
North Korea, one would expect Tokyo to continue courting Seoul and
maintaining an influence on the peninsula. Instead, Japan-ROK relations
unexpectedly deteriorated and Japan suffered a self-inflicted flanking blow to
its overall China strategy. The downward spiral began in April 2004 when
Shi-mane Prefecture passed a resolution declaring Takeshima (Dokdo in
Korean) Japanese territory, and South Korean president Roh Moo Hyun
launched an anti-Japanese campaign to put the historically more pro-Japan
conservatives on the defensive. Rather than focusing on its larger interests on
the Korean Peninsula, the Japanese Foreign Ministry continued pressing for
international recognition of Japan’s claims to the contested territory, pouring
more fuel onto the flames. Prime Minister Koizumi’s visits to the Yasukuni
Shrine complicated the issue further, and then Prime Minister Abe’s ill-
considered comments in March 2007 seeming to justify Japan’s wartime
treatment of impressed sexual workers or “comfort women” from Korea led
to open competition between the two governments as they lobbied for and
against US congressional legislation condemning Japan. The Roh
government’s refusal to continue TCOG meetings on North Korea and
attempts to list Japan as a common enemy in joint US-ROK defense planning
(unsuccessful in the end) should have caused real alarm in Tokyo, but instead
the Japanese government waited and hoped that relations would improve
after Roh.
With the election of a more conservative and pro-Japanese president in
Lee Myung Bak in December 2007, relations did look set for some
improvement, but then in August 2012 Lee suddenly became the first ROK
president to visit Takeshima (Dokdo) and declared in a gathering that the
Japanese “king” (not emperor) would have to apologize before he could visit
Korea as planned. Lee’s sudden outburst had complex domestic political
antecedents in Korea, but it shocked the Japanese public. Shinzo Abe, who
had demonstrated strong pro-Korea credentials as prime minister in 2006–7
(his wife, Akie, was a major fan of Korean soap operas), poured further fuel
on the fire with campaign promises in 2012 that he would reverse early
Japanese cabinet apologies for the treatment of the euphemistically named
“comfort women” who were trafficked to serve in brothels for Japanese
Imperial Army units during the war. Abe moved away from that promise
after coming to power, but his Korean counterpart, Park Geun-hye,
maintained a cautious stance toward Japan because of her uncertainty about
the future direction of Japan’s nationalistic narrative. Meanwhile, Korean
Supreme Court rulings that the ROK government had violated the rights of
the victims of Japanese imperialism put a further chill on diplomatic efforts to
put bilateral relations back on track. Japan’s inability to sustain the positive
trajectory with South Korea set by Kim and Obuchi suggests that external
balancing behavior against China only goes so far. In the case of relations
with South Korea, Japan’s identity politics and the domestic ideological
struggle to end the “post-war regime” trumped Realist power considerations
—and clashed with Korea’s own complex pluralism and activist Supreme
Court. This deterioration occurred in spite of the fact that the Japanese public
as a whole has developed a far more positive view of the Korean people than
at any point in the two nations’ history22— and despite intense behind-the-
scenes efforts by the US government to get their two major Northeast Asian
allies more closely aligned.

THE US-JAPAN ALLIANCE IN ASIA STRATEGY

The centerpiece of the Yoshida Doctrine was a return to Japan’s hundred-

year-old tradition of accommodating to the prevailing hegemonic power, in
this case, the United States. In a broad sense, the alliance relationship has
been redefined several times since Yoshida consolidated conservative
Japanese rule and Japan’s post-war foreign policy trajectory around the first
bilateral security treaty with Washington. In each case Japan asserted
relatively more autonomy, and the United States extracted incrementally
more of a commitment to share the burden of international security. In 1960
Prime Minister Kishi negotiated a formal revision that granted the United
States the right to use bases in Japan for the security of the Far East but ended
the right of US forces to preserve stability within Japan. In 1969 President
Nixon and Prime Minister Sato agreed on the return of Okinawa to Japanese
sovereignty, and Japan acknowledged the importance of Taiwan and Korea to
Japan’s own security (an acknowledgment that led to relatively few changes
in Japanese defense policy, to the chagrin of the Nixon, Ford, and Carter
administrations). In the 1977 defense guidelines and the 1982 Roles and
Missions agreement, the Carter and then Reagan administrations reached an
agreement that led to a more direct Japanese role in defending against the
expanding Soviet military forces in the Far East, with Washington backing
the Nakasone government’s push for a larger Japanese role in international
politics.
Yet at each stage of redefining the alliance, successive Japanese
governments were careful to ensure that Article 9 of the Constitution and the
associated (but not constitutionally determined) ban on collective defense
provided a brake against “entrapment” (makikomareru) in any US
confrontation within Asia, particularly vis-à-vis China. Thus, for example,
the Japanese government unilaterally determined during the Vietnam War
that the “Far East” clause of the 1960 Security Treaty would allow US forces
to operate from Japan as far as the Philippines, an effort to prevent Japan
from being drawn into the Vietnam War. Similarly, the Japanese defense
buildup in the 1980s was aimed at the “exclusively defensive self-defense” of
the Japanese home territories against a potential Soviet attack. This served
US purposes by turning the Japanese archipelago into an impenetrable
phalanx to contain Soviet boomers in the Sea of Okhotsk where the US Navy
could attack them in the event of war in Europe, and it served Japanese
purposes by keeping Japan away from any conflict with another Asian state.
And, fortuitously for both, it served Chinese purposes by increasing the
pressure on Moscow. Explicit arrangements to deal militarily with Japan’s
immediate Asian neighbors were virtually unknown.
What has been most striking about the redefinition of the alliance since the
mid-1990s has been the increasingly explicit use of the “American card” for
Japan’s own strategic objectives in Asia. When Tokyo agreed to revise the
defense guidelines with the United States in 1996 in the wake of China’s
missile tests against Taiwan, the revision covered “situations in the area
surrounding Japan that have a direct impact on the security of Japan.”23 While
Japanese foreign and defense officials did somersaults in the Diet to argue
that the new guidelines had nothing to do with China or North Korea, the
press soon reported that the two governments were engaged in planning for
regional contingencies to complement the planning that had already been
under way since the late 1980s to deal with attacks on Japan by the Soviet
Union. In October 1998, the Japanese government agreed to joint research
with the United States on missile defense, and by 2007 Japan was spending
more on joint missile defense work with the United States than any other ally
and had successfully tested an intercept off of a Kongo-class JMSDF
destroyer near Hawaii, all of this in spite of Chinese protests that eventually
subsided once Beijing appreciated that the Japanese would not be
dissuaded.24 Then in February 2005 as Beijing prepared to pass “anti-
secession” legislation in the March National People’s Assembly that would
legislate the use of force against Taiwan to stop independence, the US and
Japanese governments stated explicitly that “stability in the Taiwan Strait”
was a core strategic objective for the alliance.25
The rhetorical use of the US-Japan alliance in an Asian context also
shifted over this same time period. Intellectuals on the left argued for a
“triangular” relationship of equal distance among Washington, Tokyo, and
Beijing in the early 1990s, calling the idea datsu-Bei, nyu-A, or “distancing
from the United States and entering Asia.” By the late 1990s, the more
popular phrase even on the left was Nichibei Nyu-A, or “going into Asia with
the U.S.-Japan alliance.” Since 1957 Japanese prime ministers had opened
Diet sessions by noting that Japan’s foreign policy was based on three
principles: “The United Nations, the U.S.-Japan Alliance, and relations with
Asia.” Prime Minister Koizumi broke this trend in 2001 when he opened the
Diet with a speech noting that the twin pillars of Japan’s foreign policy were
“the U.S.-Japan alliance” and “international solidarity.”26 Koizumi played for
global position and influence for Japan, assuming that Japan’s leverage in
Asia would flow naturally from that. Thus, his deputy chief cabinet secretary
in 2003, Shinzo Abe, argued on national television that Japan’s proactive role
in the war against international terrorism in Afghanistan and Iraq would
ensure that the United States would use its power to help Japan deal with the
North Korean threat.27
There is no question that different Japanese governments will have
relatively different stances toward China or North Korea. The shift from the
hawkish Abe to the more moderate Fukuda in September 2007 presaged a
new willingness to engage North Korea in diplomatic negotiations and to
avoid needless provocations of China with respect to the Yasukuni Shrine
and other sensitive historical issues. But Fukuda and his main rival for the
premiership, Aso Taro, differed little from Abe in their commitment to
keeping a strong US-Japan alliance to manage the complex security
environment in Asia.
It seemed that even the opposition Democratic Party of Japan would be
unlikely to form a government based on an anti-American platform. While
party leader Ozawa Ichiro blocked legislation to authorize the dispatch of
JMSDF ships to assist with counter-terrorism operations in the Indian Ocean
and led delegations of Diet members on missions to Beijing timed to coincide
with Abe’s or Koizumi’s visits to Washington, Ozawa’s tactics were
designed to embarrass the government and play on the anti-Americanism that
exists in Japan as it does in every country. Ozawa’s own track record in
government during the 1990–91 Gulf War was one of strengthening alliance
ties with the United States, and it seemed that he would have difficulty
building a coalition to topple the ruling LDP if he premised it on a return to
the strategy of “distancing from America to join Asia” that had some appeal
before the Chinese and North Korean threats became so pronounced.
In fact, when the Democratic Party of Japan toppled the LDP in elections
in September 2009, Prime Minister Hatoyama Yukio did return to the
narratives of Asianism and separation from the United States that
characterized his grandfather Ichiro in the 1950s, with Ozawa complicit at
every turn. In his first months, Hatoyama promised to move closer to China
and establish an East Asia Community without the United States and to break
existing bilateral agreements and move the US Marine Corps Air Station
Futenma out of Okinawa Prefecture, while his top advisers declared they
were no longer going to rely on the “Anpo (US-Japan Security Treaty)
mafia” for foreign policy.28 None of this was based on a popular mandate,
since voters declared in exit polls after the DPJ election victory that they had
overwhelmingly chosen the DPJ in order to dump the LDP and establish a
competitive two-party system—not because of agreement with the DPJ’s
foreign policies.29 In Japanese government polls taken at the time of
Hatoyama’s election, for example, 71.9 percent of Japanese rejected the idea
of an alliance with Beijing.30
Within the DPJ as well, conservatives began to claw back foreign policy
as Hatoyama resigned within a year, to be replaced by a more cautious Kan
Naoto, and then a year after that by the conservative pro-alliance Noda
Yoshihiko. By 2012, however, the DPJ’s poor governance and abysmal
economic performance spelled doom, and Abe—who had come back from
political oblivion within the LDP in large part on the back of his national
security credentials in the wake of the crises with China—took power. The
tone of Abe’s nationalism during the campaign and first months in office
seemed as strident on the right as Hatoyama’s had been on the left, but Abe
had learned from the past six years and was soon careful to tone down
nationalist rhetoric and focus on the issue most important to the voters—
restoring economic growth. His national security agenda—including closer
US-Japan security ties, establishment of a National Security Council,
recognition of Japan’s right of collective self-defense, and easing arms export
restrictions31—was largely indistinguishable from where Noda would have
gone had he stayed in power and further distanced himself from the Ozawa-
Hatoyama wing of the DPJ. Meanwhile, popular support for the US-Japan
alliance reached all-time highs in the wake of Operation Tomodachi, the
massive humanitarian relief operation conducted by the US military in the
wake of Japan’s March 2011 earthquake, tsunami, and nuclear crisis.
None of this meant the complexities of managing alliance relations with
the United States in Asia had evaporated, however. The issue of the Futenma
air base remained unresolved, and, more significantly, the Abe government
wanted clearer commitments from the United States regarding the rising
challenge from China to the Senkakus and the East China Sea. The Obama
administration reiterated commitments made by the Clinton and Bush
administrations that the United States would come to Japan’s aid in the event
of a crisis over the Senkakus, since Japan’s administrative control of the
islands meant they were covered by the 1960 US-Japan Security Treaty. Yet
some Washington foreign policy leaders grew anxious about what a more
assertive Japanese stance meant for US-China relations. After decades in
which Japan sought to avoid entrapment in a Sino-US conflict, the shoe was
suddenly on the other foot. Japan’s increasing dependence on the security
alliance with the United States brought a whole new set of complications for
a nation highly attentive to status and hierarchy in the international system.

SHAPING REGIONAL INTEGRATION

Japan has always been sensitive to the international order in East Asia and
has attempted to shape that order as Japanese power assets have increased. In
the nineteenth century the goal was to end the unequal treaties and achieve
legal parity with the Western powers, which was accomplished through
bilateral treaties with Britain in 1902. Japanese intellectuals also developed a
pan-Asian ideal that resonated with anti-colonial nationalists in China,
Vietnam, and Korea at the beginning of the twentieth century. The perverse
evolution of that pan-Asianist ideal into the Greater East Asian Co-Prosperity
Sphere led post-war Japanese leaders like Yoshida to be wary of ambitious
schemes to shape the regional order. As Japan’s economy recovered and
reparations and aid began in Southeast Asia, Japanese political leaders began
exploring their nation’s role in the regional order again, but the US push for
multilateral security arrangements in the region reinforced caution and a
desire for a Japanese-led regional role that was supportive of US leadership
but not entrapped within it. After Prime Minister Kakuei Tanaka’s motorcade
was stoned by protesters during a visit to Indonesia in 1974, it became clear
that Japan would have to begin defining a role for itself in the regional order
to move beyond memories of the war. In 1977 Prime Minister Fukuda Takeo
launched the new “Fukuda Doctrine,” which sought to emphasize Japan’s
relationship with the Association of Southeast Asian Nations (ASEAN) as a
whole, including a $1.5 billion aid package and a pledge to distance itself
from Washington and improve relations with Vietnam consistent with the
wishes of Hanoi’s neighbors.
The appreciation of the yen in 1985 and the resulting explosion of
Japanese aid and investment in Asia intensified efforts in Tokyo to take a
lead in regional integration and institution building. While the Foreign
Ministry opposed integration schemes like Malaysian prime minister
Mahathir’s East Asia Caucus that would exclude the United States or
Gorbachev’s 1985 Vladivostok proposal for a regional forum that would
weaken US alliances, the Ministry of International Trade and Industry (MITI)
and business continued to nurture transpacific business arrangements like the
Pacific Economic Cooperation Council (PECC) and the Pacific Basin
Economic Council (PBEC). In 1989 the Japanese and Australian
governments took the initiative in forming the Asia-Pacific Economic
Cooperation (APEC) forum in order to encourage regional economic
integration on a transpacific basis that would include the United States.
However, Japan struggled with the proper balance between an economic
integration strategy that remained open and focused on the transpacific trade
relationship with Washington versus one that would allow Japan to play a
larger leadership role as the first goose in a “flying geese” strategy of
economic development in the region. Growing trade friction with
Washington in the late 1980s and 1990s increased the attractiveness of Asian
economic groupings that Japan could lead. In 1991 the Ministry of Finance
pushed for and funded a study at the World Bank on the “Asian Economic
Miracle” in an effort to show that Japanese and Asian capitalism was
different32 and, in the words of economist and vice finance minister
Sakakibara Eisuke, had “surpassed” Western capitalism.33 The apex of
Japanese efforts to establish alternative economic arrangements and
philosophies to the so-called Washington consensus came in the wake of the
1997 East Asian financial crisis when Sakakibara attempted to form an Asian
Monetary Fund to counter the influence of the International Monetary Fund
(IMF). The AMF scheme collapsed under pressure from Washington and
concern within Japan about accepting the moral hazard of responsibility for
Asia’s weakly governed economies. But a less ambitious program for
swapping debt and exploring longer-term arrangements for regional currency
systems was established through the Chiang Mai Initiative.34
With the Koizumi era, the focus on building regional buttresses against US
influence was steadily overshadowed by the goal of shaping the region’s
architecture to manage the rise of Chinese power. When ASEAN senior
officials yielded to Chinese pressure to decouple a proposed East Asia
Summit from Southeast Asia and host the second meeting in Beijing, Japan
joined with Singapore and others to ensure that the summits would be hosted
by ASEAN states and that India, Australia, and New Zealand would be
invited to dilute Chinese influence and increase the voice of democracies
within the forum. As part of the strategy to move the regional architecture to
Japan’s advantage rather than China’s, the Japanese Foreign Ministry pushed
for what it labeled “principled multilateralism” that would enhance
democracy, governance, and the rule of law rather than Beijing’s preference
for a value-neutral architecture that would retain the principle of non-
interference in internal affairs.35 In part this new emphasis on universal values
was glue for the US-Japan alliance and an effort by conservatives to brand
Japan as superior to China, but even the most ardent Asianists in the Foreign
Ministry were pushing for Koizumi to highlight the importance of democracy
and rule of law in his speeches at the Bandung Asia-Africa Conference in
April 2005 where no Americans were present at all.36 This was the natural
evolution of Japanese efforts to take a lead in rule making in Asia and to
ensure that Chinese norms did not undermine Japanese interests in an open,
inclusive economic region reinforced by the rule of law.
Japan’s efforts to lead in the creation of an East Asian Community today
are multilayered. Japan encouraged the US government to join the East Asia
Summit and works to ensure that India, Australia, and New Zealand reinforce
the theme of “principled multilateralism” in groupings such as RCEP, the
Regional Comprehensive Economic Partnership, where the United States is
not present. Japan’s strengthened ties with Australia and India have been a
striking new feature of a strategy aimed at enhancing Japanese influence
based not only on economic power, but also values. Meanwhile, Japan also
still plays the “Asia” game, as the Japanese Finance Ministry has pushed
other participants in the Chiang Mai Initiative to consider studying a regional
currency, while the Foreign Ministry has launched a new Organisation for
Economic Co-operation and Development (OECD)–like arrangement for East
Asia that would exclude the United States as a full member.37 And in the
most significant development in regional trade architecture, Japan elected in
2013 to join the US-centered Trans-Pacific Partnership (TPP), at once
transforming what had been a grouping of smaller economies, most of which
already had free trade agreements with the United States, into the most
significant trade liberalization effort since the World Trade Organization
talks stalled a decade earlier.38 Japan’s decision to join TPP turned Tokyo
from a follower into a potential leader on trade architecture, prompting China
to move away from opposition to TPP, and Korea to consider joining the
group. In many respects the combination of TPP and RCEP manifests the
ideal mix of East and West in Japan’s historic vision of its role in Asia-
Pacific regional architecture.

STRENGTHS AND WEAKNESSES IN JAPAN’S

DIPLOMATIC TOOL KIT

Faced with more mature economic growth rates and demographics and a
rapidly rising China, Japan’s leaders have diversified their diplomatic tool kit
in order to sustain national power and prestige. External balancing through
closer relations with the United States and now Australia, India, and ASEAN
member states has been complemented by a new emphasis on global norms
in order to shape Asian regional integration in ways that bond the region
more closely with Japan and not China. Domestic institutional reforms,
including the strengthening of the prime minister’s office, increasing
jointness among defense forces and intelligence agencies, and the elevating
of the Defense Agency to a Defense Ministry, have all enhanced the ability of
the Japanese government to be more proactive on security and diplomatic
affairs. More such reforms are likely in the years ahead.
Yet Japan faces two significant drags on its potential role in the region.
The first is the burden of history. It would be inaccurate to argue that Japan
has not officially “apologized” for the war. Significant apologies have been
issued, including Prime Minister Murayama’s statement on the fiftieth
anniversary of the end of the war in 1995 and Obuchi’s bilateral statement
with Korean president Kim Dae Jung in 1998. The problem has been that for
every official apology, there has been news of right-wing politicians denying
the government’s interpretation of history and undercutting the original
gesture. A national consensus on history will remain difficult for Japan for a
host of reasons: the continued belief by many that Japan fought a war of
liberation against Western imperialism, the Japanese people’s ability to adopt
the status of victim because of the bombings of Hiroshima and Nagasaki, the
decision by the United States to retain the emperor and many leading
industrialists and conservative figures in order to provide stability and help
rebuild Japan, resentment of the cynical use of the history issue by politicians
within Korea and China, the hypocrisy of Chinese criticism given the record
of tens of millions killed during the era of Mao Zedong, the difficulty of the
Korean people coming to terms with their own polarized history, and
“apology fatigue” by the Japanese public and the desire of a generation of
political figures born after the war to close the “post-war” chapter in Japan’s
history.
The history problem confounds Japanese foreign policy in very specific
ways. Abe lost international support on the abductee issue because of his
brief and ill-fated attempt as prime minister to minimize the interpretation of
“coercion” of comfort women by the Japanese Imperial Army during the war.
Koizumi’s Yasukuni visits and the Takeshima/Dokdo territorial issue made it
easier for China to enlist Roh Moo Hyun’s government in opposition to
Japan’s UN Security Council bid. Later Abe’s statements on comfort women
and history complicated relations with a more conservative government in
Seoul under Park Geun-hye, which might have been more inclined to align
closer to Japan.
However, charges that Japan is isolated in Asia because of history are not
borne out by the polling data. Polls consistently demonstrate what Gallup and
Yomiuri found in 2006: large majorities (90 percent on average) of
Indonesians, Vietnamese, Indians, and other Southeast Asians expressed the
view that Japan plays a positive role in the region.39 The problem is more
acute in Northeast Asia, as the BBC found in 2012 polls showing Japan at the
top of international opinion for its role in world affairs, except in China and
South Korea where majorities (63 percent in China and 58 percent in Korea)
said Japan did not play a positive role.40 Nor would it be accurate to describe
nationalism in Japan today as a dangerous return to the militarism of the
1930s and 1940s, for as Kevin Doak has revealed in his history of Japanese
nationalism, the modern variant focuses on “civic nationalism” or pride in the
trappings of sovereignty and Japan’s own democratic norms, rather than the
nativism or racist views of the past (though uglier nativism certainly does
continue).41 Indeed, Japan’s defense budget has not grown for years, with
only slight increases in the second Abe cabinet, in spite of the charges of
renewed Japanese “militarism” popular in the media outside of Japan.
The second drag on Japan’s world role is the unfinished business of
economic reform. The fount of any nation’s national power is the economy,
and all the more so with Japan, despite efforts to expand underutilized
instruments of national power in other areas as the economy stagnated. In
2013 the new LDP government promised to bring Japan back with
“Abenomics,” and initial stimulus packages and inflation-targeted monetary
easing added confidence and growth within months of Abe coming to the
helm. What the government called the “third arrow” of Abenomics—
sustainable growth—is a more challenging problem. Certainly participation
in TPP and Abe’s enthusiasm about empowering women in the Japanese
economy will help, but structural reforms do not come easily to the
conservative Japanese bureaucracy and business community—unless, that is,
the nation sees no other choice. As historians like Kenneth Pyle and Carol
Gluck note, Japan has historically always reordered its domestic institutions
to sustain its position against new challenges when all other choices had
failed.42

CONCLUSION

If Nakae Chomin’s three drunkards were viewing Japan’s strategic position

today, they would be impressed. When they were enjoying their sake almost
150 years ago, Japan enjoyed well less than 1 percent of global GDP, and
even on the eve of the Second World War it barely crawled to a 3.8 percent
share. Today Japan is the third-largest economy in the world. While the
Meiji-era leaders struggled to end unequal treaties and enjoy respect in the
international system, today Japan has a leading role in all international
financial institutions and within the Asia-Pacific region. Japan’s alliance with
the United States is in its strongest shape ever, and this has enhanced rather
than undermined Japan’s own strategic position in Asia. This would no doubt
please the master drinker and the gentleman of Western learning, though their
Old World companion would likely have expressed dismay at Japan’s loss of
traditional values and growing identification with universal norms of
democracy and rule of law, a sentiment expressed even today in best-selling
books like Kokka no Hinkaku (The Dignity of the Nation).43 The three
drinkers might be confused by the fact of enormous Sino-Japanese economic
interdependence and alarmed at China’s growing military and economic
power, particularly the prospect of growing Chinese influence over Korea.
The enduring strategic impulses captured in A Discourse by Three
Drunkards on Government suggest that Japan’s role in Asia will remain on
its current trajectory, but much will depend on two variables: the United
States and China. A catastrophic loss of US hegemonic leadership—either
through defeat in war in Asia, retrenchment at home, or failure to honor
security commitments to Japan in the face of Chinese aggression in the
Senkakus—would inevitably force a reorientation of Japanese security policy
in the region. Whether Japan increased its internal and external balancing
against China or bandwagoned with Beijing would depend on the nature and
scope of Chinese and US power. A collapse of regional but not global US
dominance would likely push Japan to balance China regionally through
increased internal balancing and alignment with the United States globally.
However, Chinese hegemonic power at a global level would put Japan in the
position of having to consider accommodation with China as both a regional
rival and leader of the international system for the first time in half a
millennium. In that admittedly remote scenario, bandwagoning with China
would not be out of the question, though certainly out of character for
modern Japan.
Of course, the nature of the US political debate about America’s role in
the world and also the difficulties China faces at home both suggest that
either a US retrenchment or a linear Chinese trajectory toward global
dominance is unlikely. Japan is therefore more likely to adjust its strategy in
increments depending on how these two powers conduct themselves.
Generational change at home will mean that self-restraint will likely diminish
as a characteristic of Japanese policy in Asia, but a more assertive security
policy will still have strong structural constraints when it puts at risk Japan’s
beneficial security arrangement with the United States and its political-
economic engagement with Asia.
 The Korean Peninsula has been a trigger for Japanese strategic change in
the past, prompting both the Sino-Japanese and Russo-Japanese wars as the
“line of maximum advantage” was recalculated. North Korea’s nuclear and
missile programs will continue to fuel Japanese strategic Realism, but a
successful multilateral framework for ending that threat could contribute to
an easing of tensions with continental Asia. If Japan were somehow frozen
out of such an agreement or if the United States reached an accommodation
with Pyongyang that failed to eliminate the nuclear and missile threats, one
would expect to see more pronounced Japanese hedging, including in the
nuclear area. That scenario seems unlikely, however, since the United States
will insist on addressing broader Japanese security concerns as part of any
resolution, and Japan’s own economic power will be indispensable for
substantive reconciliation, reunification, or reconstruction of the North.
Economic interdependence within Asia, represented in the growth of
intraregional trade to 50 percent of all trade, coupled with continued reliance
on North American markets and global capital flows, all help to ameliorate
these darker trends in the security environment around Japan. The search for
an “East Asian Community” and the development of regional institutions
such as APEC, the East Asia Summit, and the Six-Party process all help to
socialize Japan and China to higher levels of cooperation. However, this
institution-building process will likely remain fluid and reflect the underlying
power dynamics in the region, breeding competition as often as cooperation.
Ultimately, Japan’s security environment and strategic trajectory will be
determined by the structure of power relations, with the nature of economic
interdependence and institution building and the role of identity and
nationalism as critical secondary and tertiary variables. And that is how the
master drinker and his two companions would have it be.

NOTES
1. Nakae Chomin, A Discourse by Three Drunkards on Government, trans. Nobuko Tsukui, ed.
Nobuko Tsukui and Jeffrey Hammond (New York: Weatherhill Books, 1984).
2. For a full examination of the strategic roots of Japanese thinking in this early period, see Ronald
P. Toby, State and Diplomacy in Early Modern Japan: Asia in the Development of the Tokugawa
Bakufu (Stanford, CA: Stanford University Press, 1992); Kenneth B. Pyle, Japan Rising: The
Resurgence of Japanese Power and Purpose (New York: PublicAffairs, 2007); and Michael Auslin,
Negotiating with Imperialism: The Unequal Treaties and the Culture of Japanese Diplomacy
(Cambridge, MA: Harvard University Press, 2004).
 3. Pyle, Japan Rising.
4. Ministry of Foreign Affairs (MOFA), “Japan Is Back” (policy speech by Prime Minister Shinzo
Abe, Center for Strategic and International Studies, Washington, DC, February 22, 2013),
http://www.mofa.go.jp/announce/pm/abe/us_20130222en.html.
5. For an overview of this Realist perspective, see Kenneth Waltz, “Structural Realism after the Cold
War,” International Security 5, no. 21 (Summer 2000): 5–41; David Kang, “Getting Asia Wrong: The
Need for New Analytical Frameworks,” International Security 27, no. 4 (Spring 2003): 57–85; and
Michael J. Green, Japan’s Reluctant Realism: Foreign Policy Challenges in an Era of Uncertain
Power (London: Palgrave, 2001).
6. Peter Katzenstein, Cultural Norms and National Security: Police and Military in Postwar Japan
(Ithaca, NY: Cornell University Press, 1996).
7. Chalmers Johnson, Laura D’Andrea Tyson, and John Zysman, eds., Politics and Productivity: The
Real Story of Why Japan Works (New York: Ballinger, 1989); Walter Hatch and Kozo Yamamura, Asia
in Japan’s Embrace: Building a Regional Production Alliance (Cambridge: Cambridge University
Press, 1996).
8. Eric Heginbotham and Richard J. Samuels, “Mercantile Realism and Japanese Foreign Policy,” in
Unipolar Politics: Realism and State Strategies after the Cold War, ed. Ethan B. Kapstein and Michael
Mastanduno (New York: Columbia University Press, 1999), 182–217; Richard J. Samuels, “Rich
Nation, Strong Army”: National Security and the Technological Transformation of Japan (Ithaca, NY:
Cornell University Press, 1994).
9. Green, Japan’s Reluctant Realism.
10. Pyle, Japan Rising.
11. Ministry of Defense, Annual White Paper: Defense of Japan 2007, July 2007, 52–53.
12. Japan Coast Guard, Japan Coast Guard Annual Report, 2005 (Tokyo: Kokuritsu Insatsukyoku,
2006), http://www.kaiho.mlit.go.jp/info/books/report2005/tokushu/p018.html.
13. Recounted from media coverage and interviews with participants in Green, Japan’s Reluctant
Realism, 96–98.
14. Cabinet Office of the Prime Minister of Japan, “Speech by H.E. Mr. Junichiro Koizumi, Prime
Minister of Japan,” Indonesia, April 22, 2005,
http://www.kantei.go.jp/foreign/koizumispeech/2005/04/22speech_e.html.
15. A total of 52.3 percent of the Japanese public is opposed to the visits according to the public
opinion poll done by Kyodo
(http://www.nishinippon.co.jp/nnp/politics/20060711/20060711_003.shtml); 51 percent of the Japanese
people are offended by China’s “interference” in the Yasukuni issue
(http://www.yomiuri.co.jp/feature/fe6100/news/20060626it13.htm); and 37 percent of the Japanese
people think China is a threat to Japan (http://www.yomiuri.co.jp/national/news/20060704it13.htm?
from top).
16. Ministry of Foreign Affairs of the People’s Republic of China, “China-Japan Joint Press
Communiqué,” Beijing, October 8, 2006, http://www.fmprc.gov.cn/eng/wjdt/2649/t276184.htm.
17. Uotsurijima, Minami Kojima, Kita Kojima.
18. Ministry of Defense, Annual White Paper: Defense of Japan 2013, July 2013, 30.
19. Japan Bank for International Cooperation, Nihon Kigyo no Kaigai Tenkai to Chugoku Bisinesu
[Oversea Expansion of Japanese Companies and Chinese Business], JBIC, March 2012,
http://www.jbic.go.jp/ja/report/reference/2012-095/jbic_RRJ_2012095.pdf.
20. The Japanese government’s lobbying of the United States on US-Korea alliance issues is well
documented in Murata Koji, “The Origins and the Evolution of the U.S.-ROK Alliance from a Japanese
Perspective,” Asia-Pacific Research Center, Stanford University, March 1997.
21. Cabinet Office of the Prime Minister of Japan, Gaiko ni Kansuru Yoron Chousa [Public Survey
on Diplomacy], October 2012, http://www8.cao.go.jp/survey/h24/h24-gaiko/zh/z29.html.
22. According to a poll conducted by the Cabinet Office of the Prime Minister of Japan in 2007, there
has been an increase in recent years of the percentage of Japanese people who believe the Japan-ROK
relationship has improved. See Cabinet Office of the Prime Minister of Japan, Gaiko ni Kansuru Yoron
Chousa [Public Survey on Diplomacy].
23. Ministry of Foreign Affairs, Japan, “Japan-U.S. Joint Declaration on Security: Alliance for the
21st Century,” Tokyo, April 17, 1996, http://www.mofa.go.jp/region/n-
america/us/security/security.html; Paul S. Giarra and Akihisa Nagashima, “Managing the New U.S.-
Japan Security Alliance: Enhancing Structures and Mechanisms to Address Post–Cold War
Requirements,” in The U.S.-Japan Alliance: Past, Present, and Future, ed. Patrick Cronin and Michael
Green (New York: Council on Foreign Relations, 1999).
24. Hideaki Kaneda, Kazumasa Kobayashi, Hiroshi Tajima, and Hirofumi Tosaki, Nihon no Misairu
Bouei [Japan’s Missile Defense] (Tokyo: Japan Institute of International Affairs, 2006), 62.
25. US Department of State, “Joint Statement of the U.S.-Japan Security Consultative Committee,”
Washington, DC, February 19, 2005, http://www.state.gov/r/pa/prs/ps/2005/42490.htm.
26. Ministry of Foreign Affairs of Japan, “Policy Speech by Prime Minister Junichiro Koizumi to the
153rd Session of the Diet,” September 27, 2001,
http://www.mofa.go.jp/announce/pm/koizumi/state0927.html.
27. Nichiyo Toron [Sunday Debate], Japan Broadcasting Corporation (NHK), August 31, 2003.
28. Jitsuro Terashima, “Beichu Nikyoku Ka Nihon Gaiko no Torubekimichi” [The US-China
Bipolarization and the Path for Japanese Diplomacy], Bungei Shunju, October 2009.
29. Michael J. Green, “The Democratic Party of Japan and the Future of the U.S.-Japan Alliance,”
Journal of Japanese Studies 37, no. 1 (Winter 2011): 91–116.
30. See “Kenpo Kaisei ‘Sansei’ 51.6 Percent, Futatabi Tasuu Shimeru, Yomiuri Yoron Chousa” [51.6
Percent Says “Yes” for Constitutional Revision: Majority Favors It, Yomiuri Opinion Poll], Yomiuri
Shimbun, April 3, 2009, http://www.yomiuri.co.jp/politics/news/20090403-OYT1T00006.htm.
31. Hudson Institute, “Japanese Prime Minister Shinzo Abe’s Remarks,” Hudson Institute’s 2013
Herman Kahn Luncheon, September 25, 2013,
http://www.hudson.org/files/publications/Shinzo%20Abe%20Kahn%20Award%20Remarks%20.pdf.
32. Edith Terry, “How Asia Got Rich: World Bank vs. Japanese Industrial Policy” (Working Paper
10, Japan Policy Research Institute, June 1995),
http://www.jpri.org/publications/workingpapers/wp10.html; World Bank, The East Asian Miracle:
Economic Growth and Public Policy (New York: Oxford University Press, 1993).
33. Sakakibara Eisuke, Shihonshugi wo Koeru Nihon no Keizai—Nihon Gata Shijo Keizai no Seiritsu
to Tenkai [A Japanese Economy That Surpasses Capitalism: Formation and Development of the
Japanese Market Economy] (Tokyo: Toyo Keizai Shimposha, 1990).
34. For details, see Green, Japan’s Reluctant Realism, chap. 9.
35. See, for example, Ministry of Foreign Affairs of Japan, “Speech by Mr. Taro Aso, Minister for
Foreign Affairs on the Occasion of the Japan Institute of International Affairs Seminar ‘Arc of Freedom
and Prosperity: Japan’s Expanding Diplomatic Horizons,’”
http://www.mofa.go.jp/announce/fm/aso/speech0611.html; and “Towards Principled Multilateralism,”
in Gaiko Forum [Forum on Foreign Affairs], no. 225 (Tokyo: Toshi Shuppan, 2007).
36. Cabinet Office of the Prime Minister of Japan, “Speech by H.E. Mr. Junichiro Koizumi,” April
22, 2005, http://www.kantei.go.jp/foreign/koizumispeech/2005/04/22=speech_e.html.
37. “Japan, ASEAN Agree to Set Up East Asian Version of OECD in Nov.,” Jiji Press, August 25,
2007.
38. Bruce Miller, “Japan’s Participation Would Encourage the Economic Expansion of the TPP,”
Nikkei Business, December 5, 2011.
39. “Tonan Asia/Indo; Tainichi kankei ‘yoi’ kyu wari” [90 percent in India and Southeast Asia View
Relations with Japan as Positive], Asahi Shimbun, September 4, 2006.
40. British Broadcasting Corporation, Globescan, and the Program on International Policy Attitudes
at the University of Maryland (PIPA), BBC World Service Poll, May 2012,
http://www.worldpublicopinion.org/pipa/pdf/may12/BBCEvals_May12_rpt.pdf.
41. Kevin Michael Doak, A History of Nationalism in Modern Japan: Placing the People (Leiden and
Boston: Brill, 2007); Hitoshi Tanaka, “Nationalistic Sentiments in Japan and Their Foreign Policy
Implications,” East Asia Insights (Japan Center for International Exchange) 2, no. 1 (January 2007);
and Thomas Berger, “The Politics of Memory in Japanese Foreign Relations,” in Japan in International
Politics: The Foreign Policies of an Adaptive State, ed. Thomas U. Berger, Mike M. Mochizuki, and
Jitsuo Tsuchiyama (New York: Reiner, 2007), 179–212.
42. Pyle, Japan Rising. And also see Carol Gluck, “Patterns of Change; A ‘Grand Unified Theory’ of
Japanese History,” Bulletin of the American Academy of Arts and Sciences 48 (March 1995): 35–54.
43. Masahiko Fujiwara, The Dignity of the Nation, trans. Giles Murray (Tokyo: IBC Publishing,
2007).
 Part Five
SUB-REGIONAL ACTORS
 Chapter Nine
ASEAN and Southeast Asia
Remaining Relevant
SHELDON W. SIMON

From a geopolitical perspective the Asian littoral divides into three sub-
regions: Northeast Asia (China, Japan, the two Koreas, Taiwan, the Russian
far east), Southeast Asia (Thailand, Burma, Cambodia, Laos, Vietnam, the
Philippines, Malaysia, Indonesia, Singapore, Brunei), and South Asia (India,
Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka). Both Northeast Asia and
South Asia contain political and economic great powers. In the latter case,
India’s economic and growing politico-security influence extends to all of
Asia. In the former instance, Japan, China, South Korea, and Taiwan all play
significant global economic roles, while Tokyo and Beijing are also major
political-security players. By contrast, Southeast Asia contains no major
powers with regional or global reach. While the region consists of several
states with vibrant economies (Singapore, Malaysia, Thailand) or economic
potential (Vietnam and Indonesia) in geopolitical stature, Southeast Asia
pales beside its Northeast and South Asia neighbors. Yet Southeast Asia is
where most Asian regional organizations originate, and these structures and
procedures are largely determined by Southeast Asian preferences. The
primary goal of this chapter is to explain how this has happened, what the
implications are for Asia’s future, and whether Southeast Asian states
organized for the past forty years through the Association of Southeast Asian
Nations (ASEAN) will be able to maintain their pivotal position in Asian
affairs.
For the past several decades, the Asia-Pacific region has been marked by a
difficult asymmetry: disputes with the most danger for damage lie in
Northeast and South Asia; however, the region’s multilateral institutions
designed to manage and reduce conflict have originated in Southeast Asia.
Moreover, since 2009–10, these institutions have become involved in the
most recent challenges to regional security: the South China Sea (SCS)
conflicts that pit varying interpretations of the Law of the Sea (UNCLOS) by
Southeast Asian disputants—Vietnam, the Philippines, Malaysia, and Brunei
—against China’s putative claim to the sea’s entirety.
While ASEAN has maintained its organizational integrity, it has added
new internal and external dimensions. The former include the incipient
ASEAN Charter. The Charter has formed three “communities” designed to
give the association greater coherence and political-economic voice in Asian
affairs: a Political-Security Community (APSC), an Economic Community
(AEC) that includes a free trade arrangement, and a Social-Cultural
Community (ASCC) that endeavors to bridge societal differences among
ASEAN’s ten states. ASEAN-initiated regional organizations encompass the
ASEAN Regional Forum (ARF), the East Asia Summit (EAS), and the
ASEAN Defense Ministers Meeting on security matters, ASEAN 3 (Japan,
the Republic of Korea [ROK], China) primarily devoted to economic issues,
and various ASEAN 1 dialogues with important states, and the Asia-Europe
Meeting (ASEM).
This chapter will focus particularly on the political-security dimensions of
ASEAN activities, including the ASEAN Charter, the association’s current
difficult relations with China, as well as ASEAN’s reaction to the enhanced
American presence in the region inaugurated by the Obama administration
and known as the “pivot” or “rebalance.” It will also examine the evolution
of Myanmar’s (Burma’s) position in the region from pariah to partner,
ASEAN’s relations with other major players through the ARF, the ASEAN
Defense Ministers Meeting (ADMM+), and the EAS—the last combining
both security and economics.

CONCEPTUALIZING ASEAN

The Asia-Pacific region has no hegemon. Instead, political, economic, and

social networks proliferate. Regional issues are addressed through collective
action. The various frameworks have diminished the strength of the absolute
sovereignty norm that dominated ASEAN at the time of its creation in 1967.
Over the ensuing decades, security issues have become increasingly trans-
national. Money laundering, human trafficking, environmental degradation,
multinational river development, migratory maritime species, terrorism, and
piracy require multilateral regime building rather than ad hoc diplomacy. In
theory, at least, organizations such as ASEAN have established procedures
and decision-making rules in which all governmental stakeholders have a
voice.1
Conceptualizing ASEAN, international relations theorists generally
employ three analytical frameworks: neo-Realism, neo-Liberalism, and
Constructivism.2 Neo-Realists disdain ASEAN’s role in regional security
because institutions are epiphenomenal. Stability depends on the distribution
of power within the Asia-Pacific and not on an international organization of
small and medium states confined to Southeast Asia. The real locus of Asia-
Pacific power depends on relations among the major actors: the United
States, China, and Japan. Neo-Liberal theorists reject the Realists’ dismissal
of ASEAN and point out that the association engages neither in balancing nor
bandwagoning with the great powers, but rather engages them through
multinational institutions, particularly ASEAN and its offspring (the ARF,
ADMM, and EAS).3 By promoting economic and political cooperation with
all three great powers, ASEAN and its offspring promote what neo-Liberals
call “absolute gains,” meaning that collaboration provides benefits to all
through reciprocity. The distribution of those benefits—“relative gains,” a
major concern of neo-Realists—is less important to neo-Liberals than the fact
that aggregate benefits increase for all, from lower tariffs to maritime security
patrols. Neo-Liberals were set back, however, by the 1997–98 Asian financial
crisis. Neither ASEAN, the ARF, nor the Asia-Pacific Economic Cooperation
(APEC) forum was able to cope with financial distress in Indonesia,
Thailand, and Malaysia. As for security, ASEAN also failed to mediate the
1999 East Timor crisis. National interests prevailed in both of these
challenges to neo-Liberalism. The third international relations (IR) school,
Constructivism, emphasizes ideas, norms, and identities, arguing that the
quality of interactions among states is based on whether norms are shared and
how they change over time. So, Constructivists argue, ASEAN is emerging
as a nascent security community as a “we feeling” develops among its
members. Critics of Constructivism insist, however, that norms and cultural
variables in ASEAN are too difficult to define and operationalize. Moreover,
linking vague norms to actual policy outcomes in ASEAN is still based on
bargaining among member states whose interests vary. Rationalists contend
that Realists and neo-Liberals present more persuasive evidence for ASEAN
outcomes than do Constructivists.4
The most useful theoretical approach to the ASEAN system may be
Evelyn Goh’s concept of enmeshment. This is a process by which states are
drawn into a system to gain benefits (neo-Realism and neo-Liberalism).
However, through the process of interaction within the system, states’ norms
may also be altered.5 Thus, beginning in the 1990s, ASEAN, led by
Singapore and Thailand, has pushed for a regional security structure—the
ARF—that would involve (or enmesh) as many great powers as possible.
Nevertheless, enmeshment is not necessarily harmonious. The PRC has been
more skeptical, using the ARF more to obstruct actions inimical to Beijing’s
interests than to reach mutual understandings.
Neither ASEAN nor its offspring possess significant centralized
mechanisms to enforce agreements struck by their members, monitor
domestic events in member states, or anticipate emerging problems. In its
essence, the association’s “ASEAN Way” is moral suasion—the belief (or
hope) that member states will do the right thing so as not to embarrass the
collectivity.6 On the other hand, there is an impressive example of ASEAN’s
ability to bind outsiders to an ASEAN norm: China, India, Australia, New
Zealand, Japan, Russia, and the United States between 2003 and 2011 have
all signed the association’s Treaty of Amity and Cooperation (TAC) binding
the signatories to a commitment for the peaceful resolution of regional
disputes.
Peaceful resolution of interstate disputes does not translate, however,
directly into multilateral security cooperation. Regional security, if truly
indivisible, entails trans-national involvement in states’ domestic affairs
whether the issue is terrorism perpetrated by Jemaah Islamiyah (JI), the
regional haze emanating from Indonesian Borneo, or arms trafficking from
mainland to maritime Southeast Asia. Suppressing these challenges to
regional security requires some erosion of the principle of non-interference in
internal affairs. Thus, to understand ASEAN requires a combination of the
three major theoretical frameworks, depending on the issue being addressed.

ASEAN’S EVOLUTION
ASEAN’s original raison d’être among its first six members (Indonesia,
Malaysia, Thailand, Singapore, the Philippines, Brunei) was to protect each
state’s sovereignty. Formed in 1967 at the Cold War’s height and during
America’s military involvement in Indochina, the non-communist Southeast
Asian states came together to hold North Vietnam, China, and the Soviet
Union at bay, while permitting US and British allies (Thailand, Philippines,
Malaysia, and Singapore) to maintain their security ties to these outside
powers. Intra-ASEAN relations had another purpose. Indonesia under
Sukarno (1945–67) had been a significant source of regional trauma,
opposing Malaysia and Singapore as well as the US presence in the
Philippines and flirting with the PRC, North Vietnam, and the USSR. After
Sukarno was driven from power in the course of an abortive Indonesian
communist coup, a year later the founding fathers of ASEAN saw an
opportunity to integrate a new military-led Indonesia into a larger Southeast
Asian political enterprise that would both provide Jakarta an opportunity for
regional leadership and commit Indonesia to peaceful relations with its
neighbors. From that tentative beginning, ASEAN has evolved arguably to
become the best-known intergovernmental organization in Asia. As the late
Michael Leifer observed, “the Association has developed over the years into
a working diplomatic community and has concurrently grown in international
stature becoming in the process a factor of some significance in the
calculations of both regional and extra-regional states. To that extent, despite
intra-mural differences, it has been able to assume a prerogative role of a kind
in an intermittent process of negotiations about establishing rules of the
game.”7
For ASEAN’s founders, non-interference in the domestic affairs of its
members was the litmus test for the association; until the mid-1990s that
norm was directed outward against great power intervention. With ASEAN’s
expansion to Indochina and Burma, however, the norm’s deficiencies became
apparent as human rights violations by the newest members were shielded.
For Vietnam, adherence to ASEAN constituted diplomatic reconciliation with
the association that had been branded an instrument of US neocolonialism by
Hanoi during the Cold War. ASEAN’s original membership wondered how
Vietnam would take to ASEAN’s informal process, quiet diplomacy, self-
restraint, confidence building, and conflict avoidance. After all, Hanoi had
entered the association with a long tradition of confrontation and intransigent
demands. In fact, Vietnam has proved accommodating and eager to work
within ASEAN’s rules of the game.8 While Vietnam has territorial disputes
with ASEAN members, for example over the Spratly Islands with the
Philippines and Malaysia, these have not interfered with overall cordial
relations because ASEAN has never been a mechanism to resolve conflicting
territorial claims among its members. Rather, the association restrains such
conflicts. Again, the Spratlys dispute provides a good example. The
Philippines and Vietnam were actively involved in negotiating an ASEAN-
endorsed 2002 statement of principles on the Spratlys that pledged claimants
to abjure the use of force as well as the occupation of any additional features
within the Spratly Islands chain (see the section on the South China Sea
conflicts below).

THE ASEAN CHARTER

In 2017, ASEAN will be fifty years old. Until now (2014), the association
has not been a legal entity. It had no formal status in international law.
Although ASEAN can negotiate treaties (for example, the 1976 Treaty of
Amity and Cooperation), they were only given legal status when a sufficient
number of the member states signed and ratified them. To strengthen the
association as a legal body, ASEAN needed a charter. The charter came into
existence in 2008, calling for summits on an annual basis. With the charter,
ASEAN added a Coordinating Council, Community Councils, and the
Committee of Permanent Representatives. Additionally, the association
created a human rights mechanism—the ASEAN Intergovernmental
Commission on Human Rights (AICHR). ASEAN’s institution building is
reflected in the more than 750 meetings per year that take place under its
auspices.9
These institutions are thinly constituted, however. The continued
prominence of the “ASEAN Way” ensures that involvement in the internal
affairs of ASEAN states is still anathema to the majority of ASEAN
members. Decisions taken by the association reflect the lowest common
denominator of agreement, and even these have led to only a 30 percent
implementation rate over a period of forty years. Moreover, while ASEAN
has dispute settlement mechanisms on paper, the ASEAN High Council and
the ASEAN Free Trade Area (AFTA) Council have never been invoked,
perhaps to ensure that no ASEAN member has to take sides against another.10
Nevertheless, ASEAN has negotiated two significant security milestones: the
1995 declaration of Southeast Asia as a nuclear weapons–free zone
(SEANWFZ) and the subsequent Treaty of Amity and Cooperation (TAC).
The TAC became the basis for a regional code of conduct to which all
countries had to adhere in order to join the EAS. In effect, the TAC
constitutes a non-aggression pact, requiring all signatories to resolve disputes
peacefully. Nonetheless, there have been repeated border clashes among
ASEAN states—Myanmar and Thailand, Thailand and Cambodia, Indonesia
and Malaysia, and Malaysia and the Philippines. Fortunately, all of these
have been contained; none has led to full-scale warfare among the disputants.
On the other hand, neither has ASEAN become involved in either managing
or resolving these altercations.
The ASEAN Charter has laid the groundwork for the creation of an
integrated regional community by 2015—an ambitious plan that was set in
motion at the Bali Concord II meeting in 2003. The regional community
consists of three pillars (the communities mentioned above). Blueprints for
these communities were adopted in 2009. Their long-term outcomes were
articulated in the ASEAN Visions 2020 statement: that is, an ASEAN that is
peaceful, stable, and prosperous. However, it is also clear that these three
communities are elitist and state-centric. Little effort has been made to
consult the societies of the ASEAN Ten.11 Moreover, the kind of integration
conceived in the ASEAN community confronts the obstacles inherent in the
heterogeneous nature of its members’ political systems that range from
Brunei’s absolute monarchy; to democratic republics in Singapore, the
Philippines, and Indonesia; to constitutional monarchies in Cambodia,
Malaysia, and Thailand; to communist systems in Laos and Vietnam; and a
regime in transition from harsh military rule in Myanmar to a more
democratic polity.
The APSC is particularly concerned with the association’s commitment to
democracy and human rights. Because traditional defense cooperation is
located in the ADMM, the political-security pillar has focused on human
rights issues. This concern also embodies ASEAN’s hope to be judged by the
standard criteria of global governance of which democracy and human rights
are key components. However, these hopes fall short of reality. The APSC
Blueprint speaks of human rights promotion but is conspicuously silent on
their protection. The APSC is a platform for human rights cooperation based
on the principle of non-interference. Moreover, despite the ASEAN Charter’s
noble intentions, there is no enforcement mechanism.12
The AICHR is an affirmation of ASEAN’s commitment to human rights
in Southeast Asia; however, this affirmation is negated by the association’s
non-interference principle, essentially placing human rights outside
ASEAN’s jurisdiction. The AICHR has neither investigative nor surveillance
authority. It is strictly a consultative mechanism accountable to the
association’s foreign ministers. Moreover, the framework for cooperation
remains vague and ambiguous. It lacks common standards or follow-up
procedures for any reports it may produce. It has not become linked to
ASEAN’s second stage: preventive diplomacy. Nevertheless, the AICHR can
provide education and training for national components of international
human rights treaty obligations undertaken by ASEAN.13

MYANMAR: FROM PARIAH TO PARTNER

ASEAN’s non-interference norm was based on the belief that each member’s
domestic affairs were no one else’s concern. Thus, regime type, economic
structure, and ethnic and social class compositions were not to be subjects for
debate within ASEAN. However, when the domestic difficulties of one
member spilled over into a neighboring state, the non-interference norm was
strained. The most dramatic example of this strain has been Burma (from
here onward Myanmar) since its 1997 admission to the association until
2010. Myanmar posed three serious problems for ASEAN: (1) the flight of
thousands of ethnic minority Karen into northwestern Thailand fleeing
Myanmar’s military junta; (2) illegal drug trafficking from Myanmar meth-
amphetamine factories from which over a million tablets are smuggled
annually into Thailand—a situation the Thai government has labeled among
its greatest security threats; and (3) the brutal suppression of Myanmar’s
major opposition party, the National League for Democracy, led by Nobel
laureate Aung San Suu Kyi, who was under house arrest for eleven years
until military junta reforms in 2010.
By the middle of the first decade in the new century, Myanmar’s military
junta had become isolated both within ASEAN and globally. Pro-democracy
groups in exile successfully convinced Western countries and human rights
organizations that the military regime had become one of the world’s most
repressive governments. Nevertheless, China and Russia protected the regime
from UN Security Council sanctions, and ASEAN members as well as India
—though appalled at the regime’s repression—continued to trade with and
invest in Myanmar. The military junta’s isolation and virtually total
dependence on Beijing for economic and military support led the regime to
introduce a “roadmap for disciplined democracy.”14
The military drafted a new constitution and held elections in November
2010, transferring power to a “civilian” government. The armed forces
ensured, however, that they continued to control the presidency and
parliament, though the latter “has evolved into an important check and
balance on the executive branch.”15
By 2011, both the United States and the European Union (EU) had
improved relations with the new government. The EU suspended most of the
sanctions it had imposed, and by 2012, President Obama had restored normal
diplomatic relations, lifted restrictions on humanitarian assistance, and
opened the way for new investment. Liberals in the government, led by Aung
San Suu Kyi, have worked for further democratization, though hard-liners in
both the parliament and the executive branch push back against the pace of
the reforms. Nonetheless, US diplomatic relations with Myanmar have
permitted Washington to fully engage ASEAN, which is a core element of
America’s Asian strategy. Thus, in November 2011, President Obama
became the first serving US president ever to visit Myanmar. Subsequently,
the US military invited Myanmar’s armed forces to participate in the US-led
Cobra Gold military exercises in Thailand.
In May 2013, Myanmar’s president Thein Sein visited Washington, and a
much anticipated Trade and Investment Framework Agreement (TIFA) was
signed. The TIFA is designed to assist the country in developing trade and
investment opportunities as well as to promote international labor rights and
standards. The State Department also announced US assistance through its
Energy Governance and Capacity Initiative to help build accountability and
transparency in the energy sector which has been notoriously corrupt and
opaque. However, limitations remain on military assistance, and Myanmar’s
armed forces continue to be excluded from participation in the US
International Military Education and Training (IMET) program.16
US initiatives toward Myanmar are also designed to reduce its dependence
on the PRC. Myanmar’s September 2011 cancellation of the $3.6 billion
China-backed Myitsone Dam project was an early indication that the new
government was willing to respond to grassroots objections to big projects
that would displace thousands of people. Nevertheless, China has other
substantial hydroelectric and mineral investments in the country. Beijing is
also building oil and gas pipelines that will import energy from the Bay of
Bangladesh and the Middle East, bypassing the potential strategic chokepoint
through the Strait of Malacca. The gas pipeline went online in July 2013.17
Thus, Beijing and Washington are contesting for influence in the new
Myanmar.
There has been a setback, however, in US-Myanmar relations: the onset of
religious violence in 2012. Just as the ASEAN states expressed their support
for Myanmar’s political liberalization, removing its pariah status, a more
insidious development occurred. Sectarian fighting that had been suppressed
through decades of military rule resurfaced. Buddhist attacks on stateless
Muslims in Rakhine State adjacent to Bangladesh in 2012 spread to central
Myanmar by 2013. Ultra-nationalist monks promoted a boycott of Muslim
businesses and the segregation of Buddhists and Muslims in the country.
These developments have spilled over to provoke Buddhist-Muslim
tensions in both Malaysia and Indonesia. Of 82,000 refugees in Malaysia
from Myanmar, 28,000 are Muslims from Rakhine State. These are added to
257,000 Myanmar nationals in Muslim Malaysia, most of whom are illegal
workers. Myanmar officials have asked Malaysian authorities to protect
Myanmar citizens, with little effect, and Myanmar Muslims seek vengeance
for their brethren by attacking Myanmar Buddhists in Malaysia. In Indonesia,
the world’s most populous Muslim country, Jakarta has officially supported
the plight of Myanmar Muslims with financial aid. Moreover, imprisoned
Indonesian radical cleric Abu Bakar Bashir has called on his mujahideen to
make jihad against Myanmar’s Buddhist population. In May 2013, police
foiled an attempt by radical Indonesian Muslims to bomb the Myanmar
embassy in Jakarta. These Indonesian and Malaysian actions in turn fed into
the narratives of Myanmar’s violent Buddhists that Myanmar Muslims are
aided by foreign radicals. As ASEAN’s former Secretary General Surin
Pitsuwan has noted, the outbreaks “have wider strategic and security
implications for the region.”18 On the verge of inaugurating the APSC, the
association nevertheless has not become involved in trying to dampen the
Myanmar-Malaysia-Indonesia sectarian tensions—a vivid indication that
ASEAN’s non-interference norm still prevails.
 WHITHER ASEAN?

Before examining other East Asian organizations spawned by ASEAN (see

below), it is important to inquire about the association’s future. Will it go
beyond being a consultation conclave—useful as that may be—and toward a
rule-making regime? Skeptics insist that ASEAN cannot be a change agent,
nor was it ever intended to be a collective security regime.
Nevertheless, security matters may be the area where ASEAN’s future
role is more promising. The association’s last counter-terrorism convention
was initiated at the January 2007 summit. As with earlier declarations going
back to November 2001, the 2007 iteration calls on members to share
intelligence and training, curb terrorist financing, and rehabilitate convicted
terrorists. The 2007 Convention on Counter-Terrorism is also seen as an
integral part of the putative ASEAN Political-Security Community and
closely related to the most recent ASEAN gathering of its defense ministers.
ASEAN’s database on terrorism and crime is also now being linked to
Interpol.
While these declarations promise collaboration, the one domain in which
it is already occurring is maritime security. Indonesia, Malaysia, and
Singapore’s coordinated patrols, aided by Japan’s provision of equipment and
US intelligence, have contributed to a significant reduction of piracy in the
Strait of Malacca and, so far, no incidence of maritime terrorism. In fact, as
the piracy/terrorism concern seems to have abated, discussions about the
strait are now focusing on maritime safety. According to the International
Maritime Bureau, traffic in the Strait of Malacca will increase from 94,000
ships in 2004 to 141,000 by 2020. Under Article 43 of the 1982 UN Law of
the Sea Convention, it is the responsibility of the littoral states to maintain
navigational aids and prevent pollution. In recent years, the littoral states
have held several Track I and Track II meetings on navigation safety and the
potential impact of accidents and pollution on coastal communities. Estimates
of the cost of coping with the hazards presented by increased strait traffic
could be as high as $300 million over the next decade.
Japan has long contributed financially to the strait upkeep, and in recent
years India, South Korea, and the United States have also pledged assistance.
China, too, has offered to restore the navigational aids that were damaged in
the December 2004 Indian Ocean tsunami. However, these are all voluntary
contributions. The Nippon Foundation of Japan has suggested that all ships
transiting the strait contribute one US cent per deadweight ton of cargo. This
would generate $40 million a year toward navigational safety. Nevertheless,
user states and their companies have not been forthcoming, insisting that the
responsibility is solely with the littorals. In actuality, there are several stake-
holders including the littorals, user states, shipping companies, and insurance
agents. Safety in the strait would be an excellent issue for ASEAN to
undertake as well as other regional organizations, including the ARF and
APEC.19

ASEAN’s Offspring:
The ASEAN Regional Forum (ARF)20
The ARF emerged in 1994 from ASEAN’s post-ministerial conferences that
were held after ASEAN’s annual foreign ministers meeting. Over time, the
ARF became the world’s largest security discussion forum, encompassing
twenty-seven countries plus the European Union. The subject matter was
broadly political/security. Formalization of these extra-ASEAN discussions
in the ARF occurred as ASEAN realized that if the association was to remain
relevant in post–Cold War Asia-Pacific security, it should ensure that its
procedures would dominate Asia-Pacific security discourse and that ASEAN
would be a part of all Asia-Pacific security deliberations. Nor is the ARF
designed to resolve specific regional disputes such as the Spratly Islands. The
ARF is aimed at bringing about long-term peace by fostering a sense of
mutual trust. Whether this works depends on the quality of relationships over
time among its members.
Organizationally, the ARF’s highest level is its annual foreign ministers
meeting, always chaired by an ASEAN state. The annual meeting is
supported by a Senior Officials Meeting (SOM) that deals with substantive
issues. The SOM, in turn, is aided by a working-level venue called the Inter-
Sessional Support Group on Confidence-Building Measures. Confidence-
building activities have remained ARF’s primary focus since its inception.
These groups are supplemented by gatherings of specialists on topics such as
trans-national crime that consist of Track II security experts organized
through the Councils for Security Cooperation in the Asia Pacific (CSCAP),
which themselves run parallel dialogues to the ARF.
The ARF reflects ASEAN’s preferred strategy of consensus diplomacy,
which manages problems rather than solves them. That is why the ARF has
had such difficulty moving beyond its initial stage of promoting confidence
building to its proposed second stage of preventive diplomacy (PD) or to the
long-postponed apex of ARF maturation: conflict resolution. Another
explanation for this difficulty is that ASEAN wanted to enmesh China, the
United States, and Japan as security partners who would commit to Southeast
Asia’s stability via confidence building by keeping an eye on each other to
discourage adventurism. However, this ARF status quo orientation does not
promote the kind of change inherent in preventive diplomacy and conflict
resolution.
An additional ASEAN goal with respect to outside powers joining the
ARF has been to extend the aims and principles of ASEAN’s TAC to ARF
members, meaning that all agree to resolve disputes peacefully. This refers
particularly to China’s South China Sea claims. For the external powers, ARF
provides other benefits. Washington uses the ARF to promote dialogue
between South Korea and Japan; Japan and China use the ARF as a vehicle
for their enhanced Asia-Pacific diplomacy. North Korean nuclear weapons
are also a topic of ARF discussions.
The activist states within the ARF (the United States, Japan, Australia, and
Canada) have promoted a PD agenda, but the ASEAN Way requiring
consensus has effectively blocked it. Moreover, the fact that an ASEAN state
will always chair the ARF means that disputes between ASEAN and non-
ASEAN members will only be deliberated before the ARF with great
difficulty. The only ways PD will be activated in the ARF are if the non-
interference principle is moderation, the ARF develops more practical PD
measures, and structural reform occurs that dilutes ASEAN’s dominance.
None of these appear on the horizon.
While the ARF has not been able to address the South China Sea conflicts
through PD, much less conflict resolution measures, nevertheless the
conflicts have appeared regularly on the ARF annual agenda since then
Secretary of State Hillary Clinton at the 2010 ARF meeting declared the
United States to be an interested party in maintaining freedom of maritime
commerce. Washington has additionally supported the peaceful settlement of
territorial claims in the SCS through the provisions of the UNCLOS—a
position also articulated by the Southeast Asian claimants but not by the PRC
which bases its claims on “historic waters” found within China’s U-shaped
line. Washington reaffirmed its SCS position at the July 2011, 2012, and
2013 ARF meetings.
 Vietnam and the Philippines have declared their positions at a variety of
international venues, including the ARF, the East Asia Summit, and the
ASEAN Defense Ministers Meeting Plus (ADMM+)—the last consisting of
all ten ASEAN countries plus their dialogue partners (the United States,
China, Russia, Japan, South Korea, and India). Hanoi and Manila raise the
SCS territorial conflicts in these meetings, while Beijing tries to ensure that
statements emanating from these gatherings do not mention the conflict. Due
to China’s obstruction, realpolitik prevails. This means that the claimant with
the most potent maritime forces is able to dominate the areas it claims. Thus
China has excluded the Philippines from Scarborough Shoal, its traditional
fishery location, as well as from Reed Bank where the seabed is reputed to
contain significant fossil fuel reserves. The ARF has been unable to
ameliorate these developments.
One should keep in mind that the ARF meets only one day each year. This
means that national positions on issues are determined well ahead of this
meeting, with international consultations among dialogue partners taking
place both informally on the sidelines and at outside venues, such as the
ASEAN ministerial meetings, that both precede and follow it. Among the
topics covered in the 2013 daylong forum were South China Sea and Korean
Peninsula developments, the Middle East peace process, Syria, and such non-
traditional security threats as natural disasters, piracy, terrorism, drug and
human trafficking, and cyber-security. Given this range, unsurprisingly, most
of the serious discourse took place on the sidelines, particularly prospects for
a Code of Conduct on the South China Sea.
At most, the ARF meetings provide an opportunity for Asian states (and
others) to express a consensus on issues that have been reached prior to the
meetings. Contrarian views are also found in the document. These statements
may be useful to advance future efforts to manage conflicts as in the
upcoming meetings between ASEAN and China over the South China Sea
Code of Conduct. In essence, however, the ARF remains stuck on the first
step of its ladder to conflict resolution. The ARF still serves primarily to
build confidence; it has yet to move to preventive diplomacy and remains far
from conflict resolution. But with twenty-seven nations gathered for one day
to deal with pressing international security problems, it would be folly to
expect more.

ASEAN Offspring:
The ASEAN Defense Ministers Meeting Plus (ADMM+)
The centerpiece of ASEAN’s Political-Security Community is the ADMM,
launched in 2006 to bring the military leaders of the ASEAN Ten together to
discuss common security concerns. The ADMM+ is an extension of the
ASEAN structure, incorporating major dialogue partners—the United States,
China, Japan, Australia, New Zealand, India, South Korea, and Russia. The
ADMM meets annually, while the ADMM+, beginning in 2013, meets
biannually. Like the ARF, the ADMM+ process is a confidence-building
security dialogue, though its five expert working groups—co-chaired by an
ASEAN state and a “Plus” partner—have specific operational briefs. The
groups cover counter-terrorism, maritime security, military medicine, disaster
management, and peacekeeping operations. They convene regularly between
the ADMM+ meetings and report to the parent organization. Also
comparable to the ARF for foreign ministers, the ADMM+ provides
opportunities for defense ministers to meet on the sidelines to deal with
pressing security issues. The greatest potential for the ADMM+ may well be
through spillover among their working groups. In June 2013, an exercise was
held in Brunei among ADMM+ armed forces incorporating military medicine
and disaster management. For the Southeast Asian countries, active
engagement with the defense establishments of the world’s most modern
armed forces taps their technical know-how and up-to-date systems.21 More
such field exercises are planned in the future, though it is unlikely they will
include scenarios that involve simulated adversaries.

ASEAN and Multilateralism’s Future: The EAS

The most recent manifestation of a wider East Asia came into existence with
the December 2005 inaugural East Asia Summit (EAS). While Southeast
Asia had been “institutionalized” since ASEAN’s creation in 1967, there was
no Northeast Asian counterpart until ASEAN + 3 (China, Japan, and the
ROK) was put together at ASEAN’s initiative in 1997. The EAS was a
Malaysian proposal strongly backed by China. For Kuala Lumpur, the
intention was for the EAS to develop like the APT, moving from a relatively
restricted economic agenda gradually to look at “security, democracy, good
government, the rule of law, every aspect of human security.” Both Malaysia
and China projected the EAS to be independent of the United States, an
exclusively East Asian forum. Other ASEAN members plus Japan, however,
fearing China’s possible domination, pressed for invitations to Australia,
New Zealand, and India—the result being that the EAS includes a number of
America’s friends and allies despite Washington’s initial absence. ASEAN
also insisted that only its members could host the annual summits. Thus,
comparable to the ASEAN + 3, ARF, and ADMM+ meetings, ASEAN would
be in the driver’s seat.
ASEAN had imposed three conditions for EAS participation: (1)
adherence to the TAC, (2) dialogue partner status, and (3) “substantial”
relations with ASEAN. By 2011, both Russia and the United States became
EAS members. Their delayed adherence reflected reservations from
Singapore, Indonesia, and Japan about Russia. Singapore argued that
Russia’s ASEAN ties were not substantial, Jakarta fears that Moscow’s
membership would reduce ASEAN’s dominance, and Tokyo opposed
because of its territorial dispute and also because it saw Russia as a Chinese
ally.22
US reticence about the EAS during the Bush administration was based on
skepticism about the proliferation of multilateral activities in Asia and the
belief that APEC and ARF should be the lead Asia-Pacific agents in
economics and security. The United States also found the Asian model of
multilateralism to be inordinately concerned with consensus and therefore to
use lowest-common-denominator approaches to confidence building. This
orientation moved the region too slowly to solve Asia’s pressing political,
economic, and security challenges. ASEAN leaders have urged the United
States to sign the TAC and join the EAS, and the Obama administration did
so. While the US Senate has not ratified the treaty, only Washington’s
signature was required for EAS membership. The most onerous commitment
the United States takes on with EAS membership is the requirement that the
president make a yearly trip to Southeast Asia.

THE SOUTH CHINA SEA ISLANDS, THE US

“REBALANCE,” AND CHINA

Maritime security in Southeast Asia also involves the South China Sea
islands. Claimed entirely by China and Vietnam, some of the Spratlys are
also occupied by the Philippines, Malaysia, Taiwan, and Brunei. Potentially
rich in seabed fossil fuels as well as mineral nodules and fish, the South
China Sea islands sit astride the major sea lanes from the Indian Ocean
through the South China Sea and up to the Sea of Japan. ASEAN began to
play a role in these disputes in 1995 when China agreed to discuss them
multilaterally for the first time. These talks led to a Declaration on the
Conduct of Parties in the South China Sea signed by ASEAN and the PRC in
November 2002. Although not a code of conduct preferred by ASEAN, the
declaration provided for freedom of navigation and overflight above the
South China Sea and proclaimed that territorial disputes would be resolved
peacefully. The parties also agreed to exercise restraint and refrain from
activities that would complicate the disputes. Nevertheless, several claimants
increased their populations on the islets they occupied and enhanced their
armaments.
China’s claim is the most extensive and the most ambiguous. Where other
claimants base their descriptions on specific geographical features and their
adjacent waters, Beijing insists on ownership of the entire South China Sea.
In an official submission to the UN in May 2009 on the outer limits of its
continental shelf, China attached a map with nine dashed lines forming a U
shape that enclosed most of the waters of the SCS. If China is claiming the
totality of the sea based upon historical discovery and use, the claim is not
consistent with the 1982 Law of the Sea convention. Further complicating
this situation are the characteristics of the features in the sea. They
encompass small islands, rocks, low-tide elevations, and artificial islands. Of
these, only islands are entitled to two-hundred-nautical-mile exclusive
economic zones (EEZ) and a continental shelf. The UNCLOS treaty states
that the difference between a rock and an island is that the latter is capable of
sustaining human habitation or economic activity.
Although the issue of sovereignty in the SCS is fundamentally bilateral
among state contenders, ASEAN has become involved, primarily through its
efforts to promote the peaceful development of SCS resources while
sovereignty claims are sidelined. Within ASEAN, the features claimed by
Malaysia, the Philippines, and Brunei are also claimed by Vietnam. So, not
only are these claimants arrayed against China but also against each other.
Moreover, ASEAN states take varying positions on the SCS dispute: Laos,
Cambodia, and Myanmar lean toward China; Malaysia and Indonesia are
cautious about US involvement; Thailand and Singapore are neutral about US
involvement; and both Vietnam and the Philippines welcome an American
role. ASEAN has played a diplomatic role in efforts to resolve the standoff.
The association was instrumental in negotiating the 1992 ASEAN
Declaration of Conduct on the South China Sea among the claimants and
subsequently backed the creation of a China-Philippines-Vietnam Joint
Marine Seismic Undertaking (JMSU). The JMSU was an agreement among
the three to explore seabed resource potential in some of the overlapping
areas they claimed close to the Philippines. It lapsed in 2008, and no results
have been made public. As for the declaration on how claimants could
develop the features they occupied so that conflict among them would be
minimized, no meaningful implementation was ever reached.
Beijing has added elements of the PLA Navy to its policy mix, stationing a
frigate in 2013 at Scarborough Shoal alongside its maritime law enforcement
boats. In effect, the Philippines is blocked from entering its traditional fishing
area—a de facto Chinese seizure. This recent occupation of a neighbor’s EEZ
challenges the United States either to accept the new norm in Southeast Asia
or to significantly enhance its capability and defense commitments in a
distant theater. Aware of America’s stated strategic baseline for Southeast
Asian waters—freedom of navigation—the PRC has repeatedly reassured
that it has no intention to interfere with freedom of navigation, so
Washington need not undertake a prolonged, expensive exercise to protect
these prerogatives.23
Within a year after the Obama administration came into office,
Washington decided to revise its Asian strategy, refocusing its civilian and
military attention to Asia, first designated as a “pivot” and subsequently as a
“rebalance.” Southeast Asian leaders are concerned primarily with America’s
military/security components, though they also support the attention to
regional institutions and assistance to partners and allies in developing their
own defense capabilities. Washington is helping the Philippines develop its
maritime defense from a very low base to create a minimal credible deterrent.
Manila is also offering opportunities for increased US air and naval rotations
and exercises through Philippine bases. Singapore will host four new littoral
combat ships in the next few years, and Australia is participating in regular
rotation exercises with American marines as well as a marked increase of US
ship visits to Western Australia. Although military budgets are also
increasing in Malaysia, Vietnam, Thailand, and Indonesia, they are generally
unrelated to the US rebalance, though welcomed by Washington for their
contribution of maintaining regional stability. Noteworthy, too, is Japan’s
contribution to Southeast Asian external balancing: the provision of ten patrol
boats to the Philippine Coast Guard.

The ASEAN Economy and China

The ASEAN Economic Community (AEC) constitutes one of the three
components of the ASEAN Charter. Scheduled to take effect in late 2015, the
AEC combines the qualities of a free trade arrangement and some of the
characteristics of a common market. It aims to create a single production base
and harmonize services in four priority areas: air transport, Internet
connectivity, health care, and tourism. Additionally, the AEC will facilitate
capital flows, devise common investment procedures, and ease the movement
of skilled labor among the ASEAN Ten.24 This is a tall order for a group of
states whose members are at such different levels of development. For
example, it takes three days to set up a business in Singapore, one hundred
days in Brunei, and six hundred days in Cambodia. Moreover, only about 20
percent of Southeast Asian trade actually operates under a free trade regime.25
In short, on December 31, 2015, the new AEC will not look like the
European Union. Although it will increase the flow of goods, services, and
investment across ASEAN borders, its major achievement may well be its
outward orientation found in the free trade agreements with external powers,
including Japan, India, South Korea, Australia–New Zealand, and most
importantly China—though not the United States.26
Although significantly undermined by its unilateral territorial claims in the
South China Sea, the PRC’s “charm offensive” (1996–2008) is still evident in
its trade and investment relations with ASEAN. China was the first external
country to establish a free trade agreement with ASEAN in the early 1990s.
The agreement permitted ASEAN states to reap an “early harvest.” That is,
they were allowed preferential access to China’s markets without having to
reciprocate for several years. Over time, this practice created a China
dependency for a number of ASEAN exporters. Moreover, in recent years,
Chinese exports are displacing some of the ASEAN countries’ own products
in their home markets. Malaysia’s international trade and industry minister
Mustapa Mohammad complained that China’s products were flooding into
ASEAN and particularly challenging the region’s small and medium
industries.
Concerning multilateral trade, China has indicated support for the creation
of an East Asia Free Trade Area (EAFTA) that involves the ASEAN states,
China, Japan, and South Korea, but not the United States. ASEAN has come
up with an expanded version of the EAFTA that adds Australia, New
Zealand, and India, called the Regional Cooperation Economic Partnership
(RCEP). Meanwhile, ASEAN and the United States have established an
Expanded Economic Engagement (E-3) initiative. ASEAN states could
affiliate with both. The RCEP appeals to smaller and poorer economies and
requires less immediate financial, legal, and administrative reform from its
members. In its own way, the E-3 is intended to prepare less-developed
ASEAN states for membership in the Washington-proposed Trans-Pacific
Partnership (TPP). The American TPP offers more economic benefits, while
the RCEP continues the ASEAN and China multiple exclusions and
differential treatment that have characterized their earlier agreements—more
a political-economic arrangement than a legal commitment.

CONCLUSION

ASEAN, the ARF, the ADMM+, and the EAS as cooperative security
arrangements designed to enhance common interests and cope with common
challenges are explicitly neither defense arrangements nor alliances. They
were not formed to counter specific threats; moreover, they coexist with
several of their members’ separate defense arrangements with external
powers, particularly the United States, but also the UK, Australia, and New
Zealand through the Five Power Defense Arrangement. Although ASEAN
and its off-spring focus on dialogue and confidence building, they also
attempt to create norms and codes of conduct as ways to avoid conflict.
(These characteristics are emphasized by Constructivist theories.) Balance-of-
power considerations operate within cooperative security regimes. For
example, a major purpose in ASEAN’s formation was to constrain
Indonesia’s hegemonic aspirations by forcing Jakarta to consider its
neighbors’ security needs. Nevertheless, successful cooperative security still
depends on access to an external countervailing power whose own policies
are compatible with that of a cooperative security organization. In ASEAN’s
case, this is the United States. Washington’s Asian military presence supports
ASEAN’s own goal of ensuring that no hegemon arises (China). That China
and the United States are both ARF members constitutes from ASEAN’s
viewpoint a way of constraining China’s political ambitions while keeping
the United States involved in East Asian security.
ASEAN members are still suspicious of one another’s policies and
motives. There is a history of subversion against neighbors that led to an
important institutional pledge: the Declaration of ASEAN Concord by which
each member state resolved to eliminate subversive threats to neighbors. No
sanctuary would be given to groups bent on overthrowing members’ regimes.
Nevertheless, Burmese and Laotian minority ethnic insurgents have sheltered
in Thailand, and thousands of Indonesian illegal migrants have periodically
strained Kuala Lumpur–Jakarta relations. Most recently, Indonesian terrorist
recruits have journeyed to the southern Philippines for training in Islamic
camps run by the Abu Sayyaf or radical members of the Moro Islamic
Liberation Front. Muslim refugees from Myanmar have created tensions with
Malaysia and Indonesia. All of these reveal the susceptibility of several
ASEAN states to domestic challenges across international boundaries.
ASEAN is able to do little to counteract these intramural frictions.
The association is more successful in associative power balancing.
Brunei’s adherence to ASEAN served to protect the tiny Borneo sultanate
from the competitive pressures of Malaysia and Indonesia. The Third
Indochina Conflict illustrates ASEAN’s use of extramural balancing by
which the association aligned diplomatically with both China and the United
States to prevent Vietnam from consolidating its hold on Cambodia.
Associative balancing fell short as ASEAN has been unable to agree with the
PRC on a code of conduct on the South China Sea to counter China’s
“creeping imperialism.” The toothless 1992 ASEAN Declaration on the
South China Sea has been more an effort at conflict avoidance than
resolution. Vietnam, the Philippines, and China reached an agreement in
2005 completely outside ASEAN, which the other claimants (Malaysia,
Brunei, and Taiwan) have ignored, that provided for joint exploration of the
seabed around the Spratlys while splitting the costs and future benefits. That
agreement came to naught, however, and was not renewed.
With the post–Cold War era, the structure of East Asian politics changed.
ASEAN states realized that prospects for Southeast Asia’s autonomy had
become obsolete. The ARF’s creation in 1994 brought East Asia’s two sub-
regions together along with the EU, North America, Australia, and New
Zealand to form the largest security discussion organization in the world.
ASEAN’s hope was to dominate the ARF procedurally and to impose the
association’s TAC as the forum’s code of conduct, thus committing members
to abjure the use of force. China and its South China Sea claims were the
target. ASEAN also hoped that by including the United States, China, and
Japan in the ARF, a stable distribution of power would result. However,
disappointment in the efficacy of regional bodies has meant that bilateral
engagements remain the focal point of real regional security actions. Indeed,
annual ASEAN summits are more significant for the bilateral deals concluded
on the sidelines than any multilateral agreements made at the main event.
Ironically, then, ASEAN and its offspring (ARF, ADMM+, and the EAS)
better serve Asian international relations as venues for smaller sideline
meetings that address specific national concerns than in the larger gatherings
that create rhetorical agreements with little subsequent capability or intention
for implementation.

NOTES
1. For a good discussion of regime creation in the Asia-Pacific, see Jim Rolfe, “A Complex of
Structures: Functional Diversity, Regional Consolidation, and Community in the Asia-Pacific,” Asian
Affairs: An American Review 33, no. 4 (Winter 2007): 217–34.
2. Representative authors for these schools include Michael Leifer and Ralf Emmers for Realism,
Shaun Narine for neo-Liberalism, and Amitav Acharya, Mely-Anthony Caballero, and See Seng Tan
for Constructivism. Also see the discussion in David Sham-baugh’s and Amitav Acharya’s chapters in
this volume.
3. Sheldon W. Simon, “Southeast Asian International Relations: Is There Institutional Traction?,” in
International Relations in Southeast Asia: Between Bilateralism and Multilateralism, ed. N. Ganeson
and Rames Amers (Singapore: Institute for Southeast Asian Studies Press, 2010).
4. An excellent discussion of these frameworks as they apply to ASEAN is found in Kai He, “Does
ASEAN Matter? International Relations Theories, Institutional Realism, and ASEAN,” Asian Security
2, no. 3 (October 2006): 189–214.
5. Evelyn Goh, “Great Powers and Southeast Asian Regional Security,” Military Technology
(January 2006): 321–23.
6. Sarah Eaton and Richard Stubbs, “Is ASEAN Powerful? Neo-Realist versus Constructivist
Approaches to Power in Southeast Asia,” Pacific Review 19, no. 2 (June 2006): 135–56.
7. Cited in Amitav Acharya, “Do Norms and Identity Matter? Community and Power in Southeast
Asia’s Regional Order,” Pacific Review 18, no. 1 (March 2005): 98.
8. Ralf Emmers, “The Indochinese Enlargement of ASEAN: Security Expectations and Outcomes,”
Australian Journal of International Affairs 59, no. 1 (March 2005): 76–77.
9. Jurgen Ruland, “Southeast Asian Regionalism and Global Governance: ‘Multilateral Utility’ or
‘Hedging Utility,’” Contemporary Southeast Asia 33, no. 1 (April 2011): 97.
10. Ibid., 98.
11. Ravichandran Mourthy and Guido Benny, “Is an ‘ASEAN Community’ Achievable? A Public
Perception Analysis in Indonesia, Malaysia, and Singapore on the Perceived Obstacles to Regional
Community,” Asian Survey 52, no. 6 (November–December 2012): 1044–45.
12. Rizal Sukma, “The ASEAN Political and Security Community (APSC): Opportunities and
Constraints for the R2P in Southeast Asia,” Pacific Review 25, no. 1 (March 2012): 142.
13. Herman Kraft, “R2P by Increments: The AICHR and Localizing the Responsibility to Protect in
Southeast Asia,” Pacific Review 25, no. 1 (March 2012): 36, 38, 40, 45. Also see David Capie, “The
Responsibility to Protect Norm in Southeast Asia: Framing, Resistance and the Localization Myth,”
Pacific Review 25, no. 1 (March 2012): 89; and Shaun Narine, “Human Rights Norms and the
Evolution of ASEAN: Moving without Moving in a Changing Regional Environment,” Contemporary
Southeast Asia 34, no. 3 (December 2012): 365–88.
14. Much of the first part of this section is drawn from Kyaw Yun Hlaing, “Understanding Recent
Political Changes in Myanmar,” Contemporary Southeast Asia 34, no. 2 (August 2012), 197–216.
15. Kyaw Yin Hlaing, “Understanding Recent Political Changes in Myanmar,” 205–6.
16. Murray Hiebert and Kathleen Rustici, “After Half a Century, a Myanmar President Visits
Washington,” Critical Questions, Center for Strategic and International Studies, May 22, 2013.
17. Bertil Lintner, “Myanmar Morphs to US-China Battlefield,” Asia Times Online, May 2, 2013.
18. Elaine Coates, “Inter-Religious Violence in Myanmar: A Security Threat to Southeast Asia,”
RSIS Commentaries, no. 117 (June 28, 2013).
19. For a thorough discussion of the Straits of Malacca, see Sheldon W. Simon, “Safety and Security
in the Malacca Straits: The Limits of Collaboration,” Asian Security 1 (Spring 2011): 27–43.
20. This section is an expanded version of Sheldon W. Simon, “The ASEAN Regional Forum:
Beyond the Talk Shop?,” NBR Analysis Brief, July 11, 2013.
21. Catherin Dalpino, “Asian Regional Multilateralism in the Asia-Pacific,” Comparative
Connections: A Triennial E-Journal of East Asia Bilateral Relations, May 2013. Also see David Capie,
“Structures, Shocks, and Norm Change: The Late Rise of Asia’s Defense Diplomacy,” Contemporary
Southeast Asia 35, no. 1 (April 2013): 18–20; and See Seng Tan, “Providers Not Protectors:
Institutionalizing Responsible Sovereignty in Southeast Asia,” Asian Security 7, no. 3 (September–
December 2011): 210–13.
22. Dalpino, “Asian Regional Multilateralism in the Asia-Pacific,” 152.
23. “Thailand: ASEAN’s Slow Pace Lauded,” Bangkok Post Online, July 19, 2013,
http://toolkit.dialog.com/intranet/cgi/present; Jorg Fredrichs, “East Asian Regional Security: What the
ASEAN Family Can (Not) Do,” Asian Survey 52, no. 4 (July/August 2012): 768.
24. Sanchita Basu Das, “Toward ASEAN Economic Community 2025!,” ISEAS Perspective 43 (July
8, 2013): 1–10.
25. “Government to Adjust Approach to Flood of China Products Entering Malaysia,” Sin Chew
Daily (Petaling Jaya), July 19, 2013, http://toolkit.dialog.com/intranet/cgi/present.
26. Dalpino, “Asian Regional Multilateralism in the Asia-Pacific,” 153.
 Chapter Ten
Australia’s Choices in the Asian Century
HUGH WHITE

Since the first European settlers landed on the Australian continent in 1788,
the security of the society they founded has depended ultimately on Western
strategic primacy in the East Asian littoral. For the last century, since the
eclipse of Britain’s global naval predominance, that primacy has been
exercised by the United States. America’s capacity to maintain strategic
primacy throughout the twentieth century, as Asian powers grew into modern
industrial states with modern military capabilities, has been central to
Australia’s sense of security with a stable regional order in Asia since at least
the visit of the Great White Fleet in 1908. But the scale and pace of economic
change in Asia over the last few decades, and especially in the last few years,
has posed new challenges to US primacy and to the regional order that US
primacy has for so long maintained.
Asia’s historic economic transformation has created immense economic
opportunities for Australia, which have underwritten its prosperity over
recent decades and raised expectations of an even richer future. But the
challenges that Asian economic growth now poses to American primacy and
Asian order raise big and unsettling issues for Australia. They require
Australians to think deeply about what kind of new order in Asia would offer
the best prospects of peace and security for Australia in the Asian Century,
and what their country can do to help bring such an order about. This chapter
will examine these questions about Asia’s new regional system from a
specifically Australian viewpoint—a viewpoint that must necessarily reflect
both Australia’s traditional closeness to the United States, based on ties of
culture, ideology, and history, and Australia’s ever-deepening engagement
with Asia based on ties of economics, geography, and, increasingly,
demography.
In considering their approach to Asia’s future, Australians have to
reexamine some of their oldest and most basic strategic and political
assumptions and contemplate diplomacy of a complexity that they have not
had to deal with before. Consider this: for over two hundred years since the
first settlement, Australia’s major trading partners have been her closest
allies, or, like Japan, the allies of close allies. But over the past few years
China has been by far the fastest-growing market for Australia’s exports, and
in 2007 China overtook Japan as Australia’s major trading partner.1 China is
not an ally of the United States, but a competitor, so in the future it seems
Australia’s major trading partner is likely to be an active strategic competitor
of its major ally. This makes Australia’s international situation much more
complex than ever before, and little in Australia’s history has prepared it for
managing this complexity. Not surprisingly, Australian policy in recent years
has shown signs of confusion as it grapples with new and unfamiliar
questions and issues. But a clearer pattern may now be emerging, and it is
possible at least to sketch the outlines of a new Australian approach to the
emerging regional order in Asia. Some of the results may be quite surprising.
Australians today are uneasily aware of the risks inherent in their strange
situation: a cosmopolitan but manifestly Western society occupying a vast,
rich island continent on the margins of Asia, half-in and half-out of the
richest, most dynamic, but arguably also the riskiest region in the world. At
the dawn of what promises to be the Asian Century, both the risks and the
opportunities of Australia’s strange situation seem more potent than ever.

THE OLD ORDER

It helps to start by sketching how Australians have seen the existing order
from which any new regional system in Asia will develop. From an
Australian perspective, Asia’s recent era of peace and prosperity dates from
the late 1960s and early 1970s. At that time, many of the conflicts and
anxieties that characterized Asia in the first two decades after the Second
World War were damped down. Close to home for Australians, the risk that
the erratic and adventurist Sukarno might destabilize Southeast Asia and take
Indonesia into the communist camp was dispelled after 1965 when Suharto
established his New Order and committed Indonesia to steady development at
home and good relations with its neighbors, including Australia. The
establishment of ASEAN in 1967 marked the end of post-colonial turbulence
in maritime Southeast Asia and ushered in a long era of cooperation,
economic growth, and social and political development. Above all, President
Nixon’s visit to Beijing in 1972 signaled China’s acceptance of the status quo
in Asia and the start of China’s integration into the post-colonial Asian order.
It therefore marked the end of a twenty-year period in which China posed a
real threat to Australia’s vision of regional peace and stability and
inaugurated an unprecedented era of peace and harmony between Asia’s
major powers.
In retrospect, we can see that the opening to China not only provided the
conditions in which America and its allies, including Australia, could
withdraw from Vietnam without risking the strategic reverses that had driven
our intervention in the first place. It also laid the political and strategic
foundations for stable and cooperative relations between East Asia’s most
powerful states and thus provided the essential preconditions for China’s
economic transformation from the late 1970s. Since they were transformed
by Nixon’s diplomacy in the early 1970s, the triangle of relationships
between the United States, China, and Japan—upon which peace in Asia
primarily depends—has proved remarkably stable and durable. The key to
this triangular set of understandings has been US primacy. America’s
credible strategic commitment to Japan reassured Japan that it need not arm
against China and reassured China that it need not fear Japan. In return, both
Japan and China accepted US primacy. In particular, China accepted that it
could achieve its ambitions domestically and internationally without
contesting US primacy in Asia—or to put it another way, Beijing was willing
to limit its international ambitions to conform to the reality of American
power in return for the economic opportunities and strategic reassurance,
including in relation to Japan, that only America could provide.
Looking back over the past forty years of peace, the emergence of this
particular form of stable order in Asia after the Vietnam War has an air of
inevitability. But at the time it seemed highly unlikely. As America faced
failure in Vietnam in the late 1960s, many observers expected the emergence
of a new balance of power in Asia in which the United States would be
forced to share power with China, Japan, the Soviet Union, and others.2
Nixon’s Guam Doctrine seemed to indicate that the United States itself
expected and accepted this outcome. Australians certainly feared that the
United States would play a much less active role in supporting Australian
security interests than it had in the years since 1945. By the mid-1970s,
however, these concerns had eased. Australians expected the United States to
stay engaged in ways that would effectively stabilize Asia’s major power
balance, even if Washington would no longer be so willing as before to
become engaged in minor regional conflicts. In the light of this confidence,
Australians put aside long-standing concerns about major power conflict in
Asia and focused their strategic attention more narrowly on their immediate
neighborhood.3
Over the following two decades Australian strategic policy emphasized
that America’s role in keeping the peace between Asia’s major powers was
the key stabilizing factor in the Asian strategic system, and hence of
Australia’s own security.4 It allowed China to abandon the economic legacy
of communism and autarchy and begin its remarkable emergence as a market
economy, fully integrated into the global system. Australia has been a major
beneficiary, as it has become ever more deeply integrated into the Asian
region. Most obviously this is true economically. In 2012, 77 percent of
Australia’s total export trade was with Asia, up from only 57 percent five
years before. China has led the way. Over the past decade Australia’s export
growth has been overwhelmingly driven by China’s demand for Australia’s
abundant raw materials such as iron ore and coal. Between 2001 and 2011
Australia’s exports to China grew at an average rate of over 25 percent per
year, from $8.8 billion to over $77 billion, so that China now accounts for
over 30 percent of Australia’s total exports. This remarkable trajectory has
been responsible for Australia maintaining strong economic growth
throughout the global financial crisis and the turbulent years that followed,
and Australia’s hopes for further economic growth rest upon it.5
But Australia’s engagement with Asia has not been limited to economics.
Since the late 1960s, Australia opened itself to immigration from Asia, and
newcomers from Asia have for many years now constituted the largest source
of Australia’s large annual migrant intake. As a result, the country’s
ethnically diverse and multicultural society is taking on an increasingly Asian
flavor. Travel, tourism, study, and cultural links have likewise grown;
Australia, for example, is host to huge numbers of students from Asian
countries. Moreover, Australia has slowly built itself a place in Asia’s
complex regional politics. While neither projecting itself as “Asian” nor
being accepted as such by its Asian neighbors, Australia has been influential
in helping to build regional forums like Asia-Pacific Economic Cooperation
(APEC) and the ASEAN Regional Forum (ARF) and has participated in the
East Asia Summit meetings. For many years Australia has been active in
prompting regional security, especially in Southeast Asia; building strong
bilateral defense links, especially in maritime Southeast Asia; and actively
promoting the development of regional multilateral security cooperation. By
the early 1990s Australian leaders started to talk of their country seeking
security “not from Asia, but in and with Asia.”

Looking Ahead
Where to from here? For Australia, Asia’s dynamism and the promise of an
Asian century offer massive opportunities for economic growth and
increasing integration into the Asian region. But at the same time, the
increasing weight—economic, political, technological, and military—of
Asia’s major powers does raise the prospect that within a few decades the US
primacy that has done so much to underwrite Asia’s stability and Australia’s
security and prosperity may wane. The American-led post-Vietnam order in
Asia thus risks falling victim to its own success. Thirty years of peace
between East Asia’s major powers has provided the setting for unprecedented
economic growth. But that growth, and the resulting revolution in power
relationships that it has initiated, may now threaten to undermine the
foundations of the order that made it possible.

GROWING UNEASE AND MIXED SIGNALS

The Howard Years
To understand how Australia approaches these questions it helps to look back
almost twenty-five years, when the potential significance of China’s rise
started to register in Canberra. In 1989 a major report to the Australia
government called Australia and the Northeast Asian Ascendancy clearly
foreshadowed the potential for China to follow the footsteps of the other
Northeast Asian “tiger economies” on a massive scale which would offer
Australia unprecedented trade opportunities.6 Five years later, in 1994, a
defense white paper clearly spelled out what this might mean strategically. It
predicted that China would become the second-largest economy in the world
within fifteen years, and that its military and especially maritime capabilities
would increase accordingly, as would its political and strategic ambitions.7 At
the same time there was much talk of a new, unipolar order based on US
power, and especially of America’s continuing strategic commitment to Asia,
which Canberra of course strongly welcomed.
The challenge of reconciling Australia’s economic interests in China and
its strategic dependency on the United States was already becoming clear
soon after John Howard’s conservative government won office in March
1996. Prime Minister Howard came to office determined to strengthen
Australia’s alliance with America. But he was also eager to exploit the
opportunities that China offered. It soon became clear that reconciling these
aims would not be easy. Almost as soon as the new government was sworn in
it faced the crisis that flared that month when Beijing tested missiles in
waters around Taiwan to influence Taiwan’s presidential elections. The new
government offered forthright and unconditional support to Washington’s
decision to deploy carriers to the waters around Taiwan, reflecting Howard’s
deep and instinctive tendency to support US policy in Asia. These instincts
were further displayed a few months later when the annual US-Australia talks
issued an unusually strong reaffirmation—“the Sydney Statement”—of both
countries’ commitment to their alliance.8 This is very much what was
expected from a conservative Australian politician like John Howard. What
was unexpected was the swift and effective Chinese response. Over the
following months Beijing combined loud public criticism of Australia’s US
alliance with a quiet but very unsettling diplomatic deep freeze, virtually
closing off ministerial-level contact between Australia and China. Even at
that time, when exports to China were much less significant than they are
today, this was enough to convince Howard that he needed to tread more
carefully. By the end of the year a new modus vivendi had emerged. Howard
made it clear to Beijing that Australia would not repudiate the alliance with
America, but that it did not see the alliance as directed against China and
would avoid any steps which could be interpreted as suggesting that it was. In
April 1997 Howard made a successful visit to China which opened his eyes
even further to the remarkable opportunities that it offered to Australia.
Howard became determined that his government would do whatever it took
to keep those opportunities open.
Over the years that followed this determination turned out to be much
easier to reconcile with Howard’s commitment to a strong alliance with
America than it might have been. During the 2000 election campaign George
W. Bush said that he saw China as a strategic competitor, and had events not
intervened it is quite possible that his administration could have taken a
tougher line on Beijing and asked its allies to do the same. But all that was
forgotten after 9/11. For almost a decade America’s attention was
monopolized by the war on terror, which distracted Washington from what
was happening in Asia and served Howard’s interests well. It allowed
Howard to grow his relationship with China without raising concerns in
Washington, while burnishing his alliance credentials with America in places
far removed from China’s concerns.
How far Howard moved away from any suggestion that Australia’s
alliance with the United States implied any alignment against China was
shown in October 2003, when a happy (for Howard) alignment of scheduling
saw the presidents of America and China visit Canberra on consecutive days.
This fact, and the two leaders’ identical programs, were potently symbolic of
the emerging parity of the two relationships, but the words Howard used to
invite Hu Jintao to address the Australian Parliament were more potent still.
Referring to issues which “might potentially cause tension” between America
and China, he described Australia as having “different but nonetheless close
relationships with both of those nations,” and Australia’s role would be to
promote “calm and constructive dialogue” between them.9 This came very
close to locating Australia as a kind of neutral intermediary between the
United States and China. He went even further a couple of years later, in a
major speech delivered to the Lowy Institute in Sydney in 2005, when he
said, “We see ourselves as having a role in continually identifying, and
advocating to each, the shared strategic interests these great powers have in
regional peace and prosperity.”10 This is a long way from Australia’s
traditional position as a staunch ally and supporter of America against all
comers.
This impression was strengthened further the next year when Howard’s
foreign minister, Alexander Downer, visiting Beijing, described Australia and
China as having a “strategic partnership” on political and strategic questions
as well as economic ones, and responded to a question about whether
Australia would support the United States in the event of a conflict with
China over Taiwan by stating controversially that such a contingency was not
covered by the US-Australia alliance.11 Howard moved swiftly to soften the
import of Downer’s remarks, but there was no doubt that he had accurately
reflected the growing sense in Canberra that Australia’s interests in China
were simply too big to be put at risk, even in the interests of bolstering the
alliance with the United States.
Howard’s approach to the management of these vital relationships was
based on his faith that Australia did not, and would not in the future, have to
choose between a strong alliance with America and a booming trade
relationship with China. This theme—that “Australia does not have to
choose”—had been the central theme of his entire approach to relations with
America and Asia from the start of his prime ministership. In a speech
opening his government’s first AUSMIN meeting in 1996, he declared what
became an article of faith to him: “We do not have to choose between Asia
and the U.S.; we do not have to choose between our history and
geography.”12 Initially this was referred to the supposed need to choose
between Australia’s relations with Asia as a whole and its links with America
—intended as a partisan rebuttal of what Howard wrongly saw as his
predecessor Paul Keating’s tendency to ignore America in favor of Asia. But
as China loomed larger, and the task of balancing relations with the United
States and China became more delicate, Howard increasingly adapted the
formulation to focus on this issue specifically. He was determined to project
confidence that these two relationships could be developed without any
constraints imposed by the other. This would have been easy enough if China
had been content to see its relationship with Australia in purely economic
terms, but Beijing became increasingly insistent that a strong economic
relationship needed to have a political and strategic element too—a point
Chinese president Hu Jintao made in his address to the Australian Parliament
in 2003.13 This being so, the hope that Australia could avoid being forced to
make choices between the United States and China depended very much on
how the strategic and political relationship between them evolved. Howard
professed confidence about this. In the Lowy Institute speech quoted earlier,
for example, he said, “It would be a mistake to embrace an overly pessimistic
view of this relationship, pointing to unavoidable conflict. Australia does not
believe that there is anything inevitable about escalating strategic competition
between China and the U.S.”14 There was of course some rhetorical sleight-
of-hand here. It means little to say that escalating strategic competition is
“not inevitable,” because it could still be quite probable. And so it has
proved. Howard’s approach to managing Australia’s two most important
relationships worked very well during his period in office because at that
time the strategic rivalry between America and China remained largely latent.
His successors, Kevin Rudd and Julia Gillard, were not so fortunate.

The Rudd/Gillard Years

When Kevin Rudd defeated John Howard in the general election of
November 2007, it seemed likely that Australian foreign policy would enter a
whole new era. Unlike Howard, Rudd came to the prime ministership
knowing a lot about international affairs, and especially about China, whose
language he speaks quite fluently. While in opposition, he had addressed the
future of the US-China relationship in some detail, arguing that Asia needed a
new and more inclusive regional architecture that accepted and
accommodated China’s growing power in order to avoid the dangers of
escalating strategic rivalry between the United States and China.15 These
views had obvious implications for the way Australia saw America’s role in
the region. They raised expectations that Rudd as prime minister would
acknowledge and address the risks of rivalry—rather than try to ignore them
as Howard had done—and reposition Australia accordingly.
Rudd came to office at a pivotal time, just as the global financial crisis hit
and, perhaps partly as a consequence, at a time when China started to assert
its strategic ambitions in Asia much more stridently than ever before. The era
of Beijing “biding its time and hiding its power” was over, and as it passed a
new phase in US-China relations began. In 2009 and 2010, as China became
more overtly assertive in challenging US primacy in Asia, America became
more explicitly determined to preserve US primacy in the region and the
stable order which it had sustained since 1972. This quickly became the key
theme of President Obama’s first-term strategic policy, with the drawdown in
the Middle East providing the opportunity for his “pivot” to Asia designed to
respond to—and resist—China’s challenge. A US-China strategic rivalry
moved from a latent possibility to a clear and growing reality.16
Rudd’s reaction to this was complex. On the one hand, he quickly
launched what was intended to be a major diplomatic initiative to create a
new top-level regional multilateral institution, which he dubbed “the Asia-
Pacific Community.” Rudd made it clear in launching his initiative that one
key purpose was to provide a forum which could negotiate a new Asian order
to accommodate Asia’s, and especially China’s, growing power.17 The
proposal itself went nowhere, stymied by insufficient diplomatic preparation
and poor follow-up. But it showed that Rudd was engaged with the need to
reconfigure the Asian order by making more space for China to maintain
peace and stability in the Asian Century.
At the same time, Rudd also seemed to move in the opposite direction,
warning stridently both in public speeches18 and private conversations19 of the
dangers of China’s growing power and the need to resist it. He presented
Australia as a country preparing to deal with escalating strategic rivalry rather
than try to ameliorate it. This was perhaps most evident in the defense white
paper produced in 2009, which depicted potential Chinese threats, and was
widely, though somewhat prematurely, seen as preparing to strengthen
Australia’s military capabilities to meet them.20 Beijing was predictably
displeased, adding to their list of complaints about Rudd, who despite his
knowledge and fluency turned out to be much less congenial to Beijing than
Howard had been. This partly reflected Rudd’s domestic political positioning.
He was clearly aware that his knowledge of China carried the risk that his
political opponents would portray him as being too close to China, and at
times he seemed to go out of his way to prove the opposite. This made it hard
for him to develop the nuanced policy that he had called for in opposition,
and meant in the end that his expertise on China become a liability rather than
an asset for himself and his country. Such contradictions bedeviled many
other aspects of Rudd’s prime ministership as well, with the result that in an
unprecedented move he was deposed by his own party in June 2010 and
replaced by his former deputy, Julia Gillard.
Gillard came to the leadership candidly acknowledging that she had no
knowledge and little interest in foreign affairs. Her main concern seems to
have been to avoid domestic criticism, especially for her handling of relations
with America, about which, as a member of the left wing of the Labor Party,
she felt politically vulnerable. The result was that whereas Rudd had bent
over backward to avoid being seen as too close to China, Gillard bent over
backward to show how close she was to the United States, while still of
course wanting to keep relations with China sweet. To do this she abandoned
the activist strand of Rudd’s policy and tried to revert to John Howard’s
approach. She pushed both the US and China relationships as hard as she
could, but tried to keep them in separate compartments, while reviving
Howard’s “Australia does not have to choose” slogan.
But US-China relations had changed a lot since Howard’s day. Obama’s
“pivot” reflected a profound shift in America’s view of its task in Asia and its
expectations of allies. Obama chose to make his fullest exposition of these
new views and expectations in a major speech delivered in Canberra in
November 2011, in which he promised to use all the elements of American
power to preserve the US-led status quo in Asia and resist any significant
accommodation of Chinese ambitions. This has immense implications for
Australia. The ANZUS alliance with America had originally been created in
1951 in direct response to the emergence of communist China, and
opposition to China’s ambitions in Asia remained its central focus for twenty
years. But that changed in 1972, and for the next forty years Australia’s
alliance with America was not conceived by either side as directed to any
substantial degree against China. Obama’s speech in Canberra marked the
switch back to China as the main focus of the alliance from America’s
perspective. Australia’s response has proved to be equivocal.
Initially the Gillard government seemed happy to signal full support for
Obama’s pivot to Asia. During the president’s visit it was announced that US
Marines would be stationed in Darwin on long-term rotational deployments
—the first long-term deployment of US combat forces in Australia since the
Second World War. In practical and operational terms this was not very
significant, nor was it very significant when seen purely in terms of the close
bilateral alliance. But in the context of the pivot, this was clearly seen, and
was intended by Washington to be seen, as a strong message of Australia’s
support for Obama’s new posture in Asia and especially for his commitment
to use US military power to perpetuate US primacy and resist any substantive
accommodation of China’s ambitions. But of course this was not a message
that Australia wanted to send to China. Gillard and her colleagues tried vainly
to argue that the pivot and Darwin deployments had nothing to do with
China, but it was clear to everyone else that they had everything to do with
China. Contrary to their hopes, they found themselves making choices
between America and China after all.
As this became clear, the Gillard government tried to take a quiet step
back to reassure Beijing by downplaying suggestions to further enhance the
US military presence in Australia. The result over the following eighteenth
months was a series of mixed signals as Canberra tried both to show itself a
strong supporter of the pivot while also remaining a firm friend of China. A
new defense white paper published in 2013 was notably more dovish toward
China than the previous one in 2009,21 and another overarching policy white
paper (Australia’s Future in the Asian Century) released in 2012 went so far
as to actually welcome China’s growing military power.22 Gillard was
rewarded when the Chinese government marked her visit to Beijing in April
2013 by declaring that the two countries had a “strategic partnership.”23
Washington was less impressed.
Canberra continued to claim that it did not have to make choices between
China and America, but it was becoming increasingly clear that neither
Beijing nor Washington agreed. The assertion that Australia does not have to
choose has in fact become a cover for the fact that Australia is trying to do
what smaller powers so often do when squeezed between big powers. It is
trying to walk both sides of the street. And this can be seen as a win for
China, because while it has not, and probably never will, secure Australia’s
support against the United States, it has clearly gone some way toward
eroding Australia’s support for the United States. When one considers that
Australia is often seen as America’s closest ally in Asia, this is significant.

Quo Vadis?
How long can Canberra sustain this balancing act? Clearly that depends
primarily on the trajectory of the US-China relationship itself. If strategic
rivalry between them eases, then pressures on Australia ease too. Conversely,
the more strategic rivalry grows, the starker the choices Australia will face.
Both the Asian Century white paper and the defense white paper expressed
great confidence that the US-China relationship would be stable and
harmonious, in the face of unmistakable evidence of escalating rivalry
between them and the very real danger of a clash.
What does this mean for Australia’s choices? Much depends on precisely
what kind of choices we mean. No one seriously suggests that Australia
should, or ever would, abandon its alliance with the United States in favor of
a similar alliance with China. That is simply a straw man. Moreover, as long
as the United States and China can avoid outright conflict, Australia does not
face an immediate black-and-white choice between preserving its alliance
with the United States and preserving its economic relationship with China. It
can maintain both. But it is already in the position that every decision it takes
about one relationship must carefully consider the implications for the other.
In that respect Australia is already making choices all the time. It is no longer
possible to keep relations with the United States and China in separate
compartments because, as far as strategic and political questions are
concerned, Australia now matters to both countries primarily as a factor in its
strategic rivalry with the other. This is the new reality of Australia’s strategic
situation.
Moreover, the clear possibility of a direct armed clash between the United
States and China—for example, arising from the Senkaku/Daioyu Islands
dispute—raises the quite plausible prospect that Australia could face a much
starker choice still. In such an event, it is very likely that Washington would
expect a direct Australian military contribution to US operations. This would
be entirely reasonable in view of the expectations built up between the allies
over many decades. But it is equally likely that China would threaten huge
economic consequences—at least—against Australia if it took arms alongside
the United States. Such threats could be quite credible if they were directed
not against current trade flows—which are vital to China—but against future
prospects. As long ago as 1999, when China’s trade with Australia was still
relatively insignificant, many Australians were very skeptical that Australia
would or should support America militarily against China in a Taiwan
contingency. Today America’s expectations of support are higher, and
Australia’s willingness to provide it has certainly dwindled. In such
circumstances, then, Australia would indeed face an agonizing choice, with
both options leading to disaster.
How Australia should respond to this predicament has become the subject
of perhaps the most active and vigorous foreign policy debate in many
decades. On one side is a view that Australia should continue to support the
United States to the full, and to rely on the US to manage relations with
China in such a way that crises are averted and Australia can continue to
develop relations with China at the same time. This is essentially an argument
that Australia should have confidence that the status quo of the past forty
years between the United States and China can be sustained. In its support
there is the evident scale of American power, Washington’s clear
commitment to Asia, and the immense stake that the United States (as well as
China) has in preserving peace and stability in Asia. This view has been
strongly supported by the great majority of active politicians on both sides of
the aisle.
The alternative view is that Australia would be mistaken to assume that
the status quo in Asia can be sustained, because China has both the power
and the determination to change the Asian order substantially in its favor, and
much then depends on how America responds. If the United States seeks to
sustain the status quo based on US primacy, the most likely outcome is
escalating strategic rivalry, as we have seen. Australia’s interests in a stable
and peaceful future order in Asia would therefore be better served if the
United States was able to negotiate with China a new order in which they
shared power. The aim would be to try to persuade China to accept a
continued strong US role in Asia in return for the United States stepping back
from primacy. This is obviously a very complex and uncertain strategy, but
the alternative, it is argued, leads even more certainly to a future of rivalry
and discord in Asia. For Australia, which has always seen US primacy, and
British primacy before that, as essential to its security, the idea of
encouraging the United States to step back from primacy is deeply troubling.
But the idea of lining up with America in escalating strategic rivalry against
China is perhaps even more troubling. This is the essence of the debate now
under way in Australia.24
A new conservative government took power in Australia in September
2013 after Tony Abbott won a general election against Kevin Rudd, who had
been briefly reinstalled as prime minister just three months before the poll.
Rudd’s return to power was too brief for him to shift policy on these big
issues, but when he was foreign minister between stints as leader he did
articulate an interesting set of arguments which brought him close to the
alternative position sketched above. In several speeches he said that hopes for
a stable future for Asia did not rest on a Pax Americana or a Pax Sinica, but
on a Pax Pacifica, which would have to be negotiated and agreed between the
region’s major powers.25
At the time of writing it is too early to judge whether Tony Abbott will
take up some of these ideas, or instead cling tightly to the orthodoxy which
he has inherited from Gillard and Howard. There is no doubt that as a firm
conservative and a disciple of John Howard he would like to emulate
Howard’s approach to managing Australia’s international position, just as
Gillard wished to do. But like Gillard he will find that Asia is a different and
more contested place, and the balance of Australia’s interests are more
complex and intertwined than they were in Howard’s day.

BACK TO BASICS

The best way to get below the complex eddies of contemporary policies and
politics to gain a deeper understanding of how Australia will view the future
international order in Asia is to explore the basic Australian interests engaged
in the big questions that will do the most to shape that order.
To start, it is important to note that China is not the only part of the puzzle.
The simple facts of geography ensure that a primary place in Australia’s
strategic thinking will always be occupied by Indonesia. Australia’s other
close neighbors are all small, weak states incapable of posing a strategic
challenge to Australia’s security. Indonesia, however, is different. The fourth-
largest country in the world by population, its 240 million people dwarf
Australia’s 20 million. No two neighboring countries in the world have so
little in common: in history, culture, religion, economics, and geography, the
two nations are profoundly different. Under Suharto’s tough but effective
New Order, relations were generally positive, and it would have seemed
reasonable to expect that Indonesia’s so far remarkably successful transition
to democracy in the decade since Suharto fell would have drawn the two
countries closer. Alas the opposite is the case; despite effective cooperation
on specific bilateral and regional questions, both countries have found it hard
to move the relationship forward. Tellingly, this has had little to do with
tensions flowing from the war on terror; Indonesia as the world’s largest
Muslim state and Australia as one of America’s closest allies have in fact
generally cooperated well in counter-terrorism efforts. Since the 2003
bombings in Bali that killed eighty-eight Australians, Indonesia with
Australian help has mounted a relatively successful counter-terrorism
campaign.
The more potent source of tension has been suspicions arising after the
events in East Timor in 1999, which stoked long-standing Australian
perceptions of Indonesian brutality and created new Indonesian suspicions
that Australia seeks to weaken Indonesia’s grip on the eastern end of its
sprawling archipelagic territory. These suspicions readily flare up over issues
like the status of Indonesia’s restive Papua province.26
The risk of these suspicions fueling serious conflict is somewhat
constrained by the asymmetry between the two sides’ military forces:
Indonesia’s huge army and Australia’s clear predominance in air and naval
forces means that in many scenarios neither side has viable military options
against the other. But should Indonesia eventually achieve the reforms
needed to sustain high economic growth, then it could relatively quickly start
to afford air and naval forces that would challenge Australia’s, and hence
alter the long-term strategic calculus. This is a possibility that Australian
defense planning can never afford to ignore. Moreover, Indonesia remains the
only country that could credibly threaten Australia with serious armed attack
without there having first been major disruptions to the Asian international
order.
Other threats to Australia, arising from more powerful adversaries farther
away, could only arise from collapse in the stable Asian order that has been
described earlier in the chapter. From Canberra, the risk and consequences of
such a disruption would be determined primarily by the power relativities and
political relationships between the region’s major powers—the United States,
China, India, and Japan. Of these, India is the least problematic of the big
players from an Australian perspective. In the last decade India has clearly
emerged as a major element in the Asian strategic system, and in the long
term India may well turn out to be the biggest power of all, but for the next
few decades at least its economic power will probably remain well behind
China’s and Japan’s, and for that and other reasons its rise is so far not in
itself disruptive to the Asian order. Indeed it would be fair to say that, so far,
India’s main strategic impact on the Asian regional system has been via
American attempts to enlist India as a balance to China’s growing power.
Australia has been predictably ambivalent about this—keen to develop its
own bilateral relationship with India, primarily as a trading partner, but
reluctant to support a US agenda to build India into a regional strategic
alignment. For this reason among others, the Rudd government has decided
not to follow the United States by agreeing to sell nuclear material to India.
Japan poses much trickier problems for Australia. Japan has been
Australia’s major trading partner for decades until recently, and Tokyo and
Canberra have developed a close political relationship as well. Overall the
relationship with Japan has been Australia’s most successful and most
significant in Asia and remains very important. But the sense of closely
shared strategic interests that has underpinned this relationship has been
dented by diverging perceptions of China’s rise, which Japanese see as much
more threatening than do Australians. In recent years, as China-Australia
relations have developed strongly, a sense of competition has emerged
between Tokyo and Beijing for Canberra’s attention. Tokyo, for example,
finally agreed to negotiate a free trade agreement (FTA) with Australia
against strong domestic opposition only after China had done so, and China
was quick to follow the Japan-Australia Joint Declaration on Security
Cooperation with an offer of its own for high-level strategic consultations.
Australia’s aim in managing the relationship with Tokyo is of course to avoid
having to make choices between Japan and China, but there is an increasing
sense that that is exactly what Japan wants Australia to do. If so, the
relationship will probably lose some luster in coming years.
That brings us to China itself. There are four points that might usefully be
made about Australian views of China’s rise.
First, Australians should not assume that China’s economy will continue
to grow over the next few decades as strongly as it has since 1979. Any
number of constraints—political, environmental, or institutional as well as
economic—might slow, arrest, or even reverse China’s rise. But few in
Australia would be willing to bet that China will not keep growing. For three
decades China has consistently shown the ability and determination to adapt
and innovate to keep the economy growing notwithstanding serious
constraints. In particular, any assumption that China cannot sustain strong
growth without radical political reform and liberalization seems unwise.
George W. Bush may believe that there is only one universally accepted
model for a successful society in the twenty-first century, but most
Australians would be willing to concede that the Chinese might be in the
process of proving him wrong.
Second, it is clear to Australians that China’s growing power is not limited
to its economy alone. Its diplomatic influence has increased sharply, its
military capabilities—especially at sea and in the air—are likewise growing,
and massive investments in education are laying the deeper foundations of
China’s future strength. Third, there can be no doubt that China aims for a
greater share of regional power. Even if it does liberalize politically, it seems
inevitable that China will seek to escape the subordinate position it has
accepted vis-à-vis the United States as its economic power approaches that of
America. How soon that might happen is suggested by recent Goldman Sachs
estimates that China’s GDP (in market exchange rate terms) may overtake
America’s as soon as 2027.27 To think that China would continue to accept
US primacy as the economic relativities narrow would presuppose that China
can be persuaded to accept the inherent superiority of America’s political
system or the deeper moral foundations of its power. That seems highly
improbable. Alternatively, it would require one to believe that China can be
contained by US military power, even as the deeper economic foundations of
US military supremacy erode. Or it would presuppose that the United States
can assemble and lead a cohesive coalition of allies that will accept US
leadership and will be able to impose on China collectively what the United
States alone could not. That in turn would presuppose that a Chinese
challenge to continued US primacy would in itself be regarded by current and
potential US allies as an unacceptable violation of the international order,
rather than a natural evolution of it in the face of changing power relativities.
Which brings us to the fourth point: that China’s ambitions for a more
equal role in regional affairs would not be regarded as unacceptable per se.
Australians, like others in the Western Pacific, do have concerns about how
China might eventually use its growing power. They are aware of the risk
that China might be tempted to use military or other forms of pressure to
compel compliance to China’s agendas in the future. But they do not
necessarily think that is likely, nor do they think that any extension of
Chinese influence is necessarily illegitimate. Indeed they seem to think it
would be quite reasonable for China, as its power grows, to seek a more
equal position in Asia’s strategic and political order than it has enjoyed for
the past thirty years. Most Australians think rather well of China and seem
willing to trust it to behave responsibly on the regional stage.28 If China limits
its search for greater influence to peaceful, non-coercive means, then
Australians seem unlikely to object.
The key question for Australians, then, is how America responds to
China’s growing power and its bid for increased regional influence. Several
things are clear. First, Australia’s interests and inclinations strongly
predispose it to support sustained US primacy in Asia. The case for deep
engagement is as strong today as when it was made by Joseph Nye in 1995.29
Certainly Australians need no convincing of that. Probably no country in
the world is more comfortable with US power than Australia. While the
policies and style of the Bush administration have been as unpopular in
Australia as elsewhere, the public is easily capable of distinguishing the
United States itself, and Australia’s alliance with the United States, from the
policies and personalities of a particular administration in Washington.
Australians remain strongly committed to the US alliance and would be
comfortable with the United States continuing to play the kind of stabilizing
leadership role that it has sustained in recent decades.
On the other hand, it appears from the policies and attitudes that have
emerged over the past few years that Australia does not regard it as essential
that the United States retain clear strategic primacy in Asia. It would be
enough for the United States to remain engaged as a key player in Asia’s new
power balance, helping with others to ensure that China and Asia’s other
major powers do not abuse their position by attempting to dominate the Asian
system through coercion. In short, Australians would be happy to see the
United States remain as a—rather than the—key strategic power in Asia, in
the role of offshore balancer.
Like everyone else in Asia (perhaps except Japan), Australians do not
want to have to choose between the United States and China. To avoid
making such a choice they are more than happy to see America retreat
somewhat from its current leadership position in Asia to a more modest role,
as long as the United States continues to provide a reassuring insurance
policy against a Chinese bid for coercive hegemony. In particular,
Australians would not be willing to surrender their hopes for a good
relationship with China in order to help preserve US primacy in Asia. If the
price of sustaining US primacy is descent into an Asian cold war in which the
United States and China are locked in a systematically adversarial
relationship, then for most Australians, that price is too high. Their concern is
that the United States may underestimate the costs and risks of the kind of
strategic competition with China that might be entailed by the determined
defense of US primacy. From an Australian perspective, muscular
confrontation of China’s growing power would be likely to destroy the
international order it is trying to save.
Whether, and if so how, these attitudes can be reflected in enduring policy
depends on whether the United States is willing to remain engaged in Asia on
any basis less than primacy. America’s foreign policy traditions provide few
if any precedents, and most recent debate on US policy toward China is not
reassuring. America’s current policy is most commonly described as
“hedging” and explained as seeking to encourage China to behave well, while
remaining poised to impose constraints on China if it behaves badly.30 Of
course, everything depends on what counts as behaving badly. What exactly
is America aiming to hedge against in its policy toward China? The risk,
from an Australian perspective, is that America is in fact hedging against the
possibility that China does not accept US primacy on US terms as China’s
power grows. If that is the case, then the scope for Australia and the United
States to drift apart in their approaches to China is quite large. Australia
would far prefer to see a US approach to China that hedged against the risk
that China starts to use coercive means to enforce its primacy in Asia, but not
against the possibility that China tries peacefully to build a greater sphere of
influence in Asia and to share with America the shaping of the regional order.
In short, it seems likely that Australians would prefer to see the United
States accept China as an equal in Asia as China’s power grows. That view
envisages that the United States and China evolve a concert of power in Asia
in which they, and others, cooperatively shape regional affairs in the common
interest. That, in turn, would require the United States to accept China as an
equal. That is a big step: it implies accepting the legitimacy of China’s
political system; of its international interests and objectives where these may
differ from, and even clash with, America’s; and of China’s growing military
power. All this seems a long way from US policy today.
Something of this distance can be judged by the weight placed in US
discussions of China on the phrase “responsible stakeholder,” proposed by
Robert Zoellick, to describe what America sees as China’s legitimate future
international role.31 Of course it is fine as far as it goes, but what is striking is
how little it offers to China. After all, would America not expect every
country to be a “responsible stakeholder”? Australia? New Zealand? Tonga?
What then does the phrase tell us about how America plans to take account of
the fact that China is already no ordinary power and is likely to become
within a few years the second-biggest economy in the world, and on many
dimensions of national power the second strongest? It suggests that the
United States has not really come to terms with the challenge that China
poses to the international order and to American primacy. It suggests that the
United States is relying too heavily on its previous experience of dealing with
number-two powers. The Soviet Union it contained and eventually crushed;
Japan it made a subordinate ally. To Australian eyes, neither model is likely
to work with China.
Australia and the United States have enjoyed a close alliance for over fifty
years, and in many ways their strategic partnership stretches back another
half century before that. The alliance has worked and lasted because the two
countries have consistently converged in their views of key developments in
Asia over that time. Now things are changing. Different views of China
threaten to create the widest breach in strategic perceptions between Canberra
and Washington in a century.

NOTES
 1. Australian Department of Foreign Affairs and Trade, “Monthly Summary of Trade Statistics,”
http://www.dfat.gov.au/publications/stats-pubs/mtd/australia_trade_1207.pdf (accessed February 12,
2008).
2. See, for example, Coral Bell, “The Asian Balance of Power: A Comparison with European
Precedents” (Adelphi Paper 44, Institute for Strategic Studies, London, 1968); and Alistair Buchan,
War in Modern Society (London: Collins, 1966).
3. Commonwealth of Australia, Australian Defense (Canberra: Australian Government Publishing
Service, 1976), 6.
4. Commonwealth of Australia, Defending Australia: Defense White Paper, 1994 (Canberra:
Australian Government Publishing Service, 1994), 95.
5. Australian Department of Foreign Affairs and Trade, “Monthly Summary of Trade Statistics.” See
also http://www.dfat.gov.au/publications/stats-pubs/australias-exports-to-china-2001-2011.pdf and
http://www.oesr.qld.gov.au/products/tables/goods-exported-aus-top30-destination/index.php.
6. Ross Garnaut, Australia and the Northeast Asian Ascendancy (Canberra: Australian Government
Publishing Service, 1989).
7. Commonwealth of Australia, Defending Australia: Defense White Paper, 1994, 9.
8. Http://www.dfat.gov.au/geo/us/ausmin/sydney_statement.html. (Note that the document is
misdated in the archive as 1998. It was in fact issued in 1996.)
9.
Http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p÷=CHAMBER;id=chamber%2Fhansardr%2F2003-
10-24%2F0004;query=Id%3A%22chamber%2Fh ansardr%2F2003-10-24%2F0000%22.
10. Http://www.lowyinstitute.org/files/pubfiles/Howard%2C_Lowy_Institute_Speech.pdf.
11. Foreign Minister Alexander Downer, “Media Conference,” Beijing, August 17, 2004,
http://www.foreignminister.gov.au/transcripts/2004/040817_ds_beijing.html.
12. Prime Minister Howard’s speech at AUSMIN, 1996.
13. Hu Jintao’s speech to the Australian Parliament, 2003.
14. Http://www.lowyinstitute.org/files/pubfiles/Howard%2C_Lowy_In stitute_Speech.pdf.
15. Kevin Rudd, “The Rise of China and Strategic Implications for US-Australia Relations” (speech
to the Brookings Institution, Washington, DC, April 20, 2007).
16. See David Shambaugh, “Tangled Titans: Conceptualizing the U.S.-China Relationship,” in
Tangled Titans: The United States and China, ed. David Shambaugh (Lanham, MD: Rowman &
Littlefield, 2012).
17. Http://www.theaustralian.com.au/politics/full-text-of-kevin-rudds-speech/story-e6frgczf-
1111116541962.
18. Kevin Rudd, address to the RSL National Congress, Townsville, September 9, 2008.
19. Http://www.smh.com.au/technology/security/rudd-the-butt-of-wikileaks-expos-20101205-
18lf2.html.
20. Commonwealth of Australia, Defending Australia in the Asia-Pacific Century: Force 2030
(Canberra, 2009).
21. Http://www.defence.gov.au/whitepaper2013/docs/WP_2013_web.pdf.
22. Http://asiancentury.dpmc.gov.au/white-paper.
23. Http://www.afr.com/p/national/gillard_scores_win_with_beijing_jC1tSRTal88wFYgrxG4PlN.
24. A good overview of this debate is provided by Paul Kelly, “Australia’s Wandering Eye,”
American Interest, May/June 2013, http://www.the-american-interest.com/article.cfm?piece=1409. The
“alternative” view is set out most fully in Hugh White, “Power Shift: Australia’s Future between
Washington and Beijing,” Quarterly Essay 39 (Melbourne: Black Books, 2010), and The China
Choice: Why America Should Share Power (Oxford: Oxford University Press, 2013).
25. Http://asiasociety.org/policy/strategic-challenges/intra-asia/complete-text-australian-foreign-
minister-kevin-rudds-speech-.
26. Hugh White, “The New Australia-Indonesia Strategic Relationship—A Note of Caution,” in
Different Societies, Shared Futures: Australia, Indonesia and the Region, ed. John Monfries
(Singapore: Institute of South East Asian Studies, 2006), 41–53.
27. Goldman Sachs, Global Economics Weekly, no. 07/28 (July 25, 2007).
28. Allan Gyngell, Australia and the World: Public Opinion and Foreign Policy (Sydney: Lowy
Institute for International Policy, 2007), http://www.lowyinstitute.org/Publication.asp?pid=660.
29. Joseph S. Nye, “East Asian Security: The Case for Deep Engagement,” Foreign Affairs
(July/August 1995).
30. See, for example, Evan S. Medeiros, “Strategic Hedging and the Future of Asia-Pacific Security,”
Washington Quarterly 29, no. 1 (Winter 2005/2006): 145–67.
31. Deputy Secretary of State Robert B. Zoellick, “Remarks to National Committee on U.S.-China
Relations” (New York, September 21, 2005).
 Chapter Eleven
Central Asia
The End of the “Great Game”?
MARTHA BRILL OLCOTT

Since the disintegration of the Soviet Union, extraordinary changes have

occurred in Central Asia—including the maturing of these newly independent
countries into increasingly competent and confident regional actors. While
extraregional powers can and do influence developments in this region, they
can no longer do so without directly engaging the governments of the region.
Thus, in a literal sense, the “Great Game” in Central Asia has come to an end.

CARVING AN INDEPENDENT IDENTITY AMONG

PERIPHERAL POWERS

Yet this has not slowed the competition for international influence in the
region, with Russia, China, and the United States, often in partnership with
the European Union, all trying to persuade these states to transform
themselves in somewhat different ways. Following a spike after 9/11, US
influence has waned in Central Asia and will decrease even further following
the 2014 withdrawal of US forces from Afghanistan. Russia’s influence is
generally holding steady, though Moscow wields significantly more influence
in some states than in others, while China’s influence is rapidly increasing
everywhere. Although less influential, Iran and Turkey have also made
consistent efforts to influence developments in this region. Initially, but no
longer, Turkey acted partially as a surrogate for the United States. The Arab
states were initially indifferent, but in recent years they have been
successfully engaged in the region. India was courted by the Central Asians
but was initially relatively restrained in its interaction with these states and
has been unable to convert recent interest into concrete influence. Pakistan
has had strong interest and commercial ambitions but has not had the
wherewithal to pursue them.
The Central Asian states rushed to join the international organizations that
would have them, including the CIS (Commonwealth of Independent States),
which they joined at the Almaty summit of December 1991. The UN
admitted all of them in 1992, and each gained membership in the
Organization for Security and Co-operation in Europe (OSCE) as successor
states to the USSR. They also joined ECO (Economic Cooperation
Organization) and OIC (Organization of the Islamic Conference), and all but
Tajikistan participated in a loose grouping of Turkic states organized by
Turkey’s late president Turgut Özal. All but Turkmenistan joined the
Collective Security Treaty Organization (CSTO), organized at Russia’s
initiative, though Uzbekistan has since withdrawn. Likewise, all but
Turkmenistan are members of the Shanghai Cooperation Organization
(SCO).1 The CSTO and SCO share many of the same goals, but the CSTO
promotes real integration of the militaries of the member states while the
SCO styles itself as an organization that understands modern security risks:
secession, extremism, and terrorism.
Several Central Asian states are now also represented in international and
regional trade organizations. Kyrgyzstan was the first state in the region to
join the World Trade Organization (WTO) in 1998, and it was followed by
Tajikistan in 2013. Kazakhstan has fought hard for WTO membership, but
the process has slowed, largely due to complications with its membership in
the Eurasian Customs Union (ECU) with Belarus and Russia.2 The ECU itself
has looked to Central Asia for new members and is expected to develop a
“road map” for Kyrgyzstan’s accession by the end of 2013.
All this outside interest has not really made Central Asia a safer
neighborhood. The bilateral and multilateral security relationships the Central
Asian states have developed have not proven sufficient protection from the
risks that the region still confronts, which include social and economic
pressures created by incomplete market reforms and the shocks of political
transition from Soviet-era leaderships.
The continued instability in Afghanistan and approaching NATO troop
withdrawal inflate the risk of terrorism, to which all states are vulnerable.
None of the Central Asian states have problems analogous to the one Russia
confronts in the North Caucasus or China faces in the Xinjiang Uighur
Autonomous Region. All of these states believe themselves to be threatened
by “extremist” groups, but often these governments employ the label
“extremist” to outlaw groups that criticize the pro-government Islamic elite or
those who oppose the current regime but are not preaching or seeking its
armed overthrow. This battle against “extremism” diverts governments from
political and economic reforms that might limit the appeal of such groups.
And each of these governments has become less tolerant as the NATO
withdrawal approaches, but this reflects fears of unrest in neighboring Central
Asian countries more than any direct impact from changing conditions in
Afghanistan.
There is no effective regional framework for regulating shared transport
links that combines the region’s two shared water basins (created by the Syr
Dar’ya and Amu Dar’ya rivers). Competition over water is potentially a grave
security concern; at various points in time the Uzbeks have threatened the
Kyrgyz, Tajiks, and Turkmen with military action over alleged or anticipated
cutoffs of supplies. Trade barriers serve to depress all of the economies to
varying extents, and neither the SCO, EurAsEC (Eurasian Economic
Community), nor the Eurasia Customs Union has proved effective in
reducing them, a goal that the Asian Development Bank has also taken upon
itself in the form of the Central Asia Regional Economic Cooperation
Program (CAREC).
Many of these problems are “managed” on the basis of bilateral
agreements, but rarely to everyone’s satisfaction.3 Border delineation is not
wholly complete, and border management remains a problem. Parts of the
Uzbek-Tajik border remain mined, with mine removal by the Uzbeks
substantially behind schedule,4 and there are still ethnically consolidated
communities living in stranded “exclaves” that are fully located within the
territory of a neighboring state.5

THE CENTRAL ASIAN STATES SEEK TO DEFINE THEIR

PLACE

None of these problems can be solved without the direct engagement of the
Central Asians. Any international actor, be it a foreign power or a multilateral
organization, cannot simply take the acquiescence of any of the Central Asian
states for granted. The region has become more integrated into the global
economy. As tables 11.1 and 11.2 show, the volume of trade going into and
out of Central Asia has increased dramatically, and the region’s leaders have
sought to carve out distinct international roles.
Kazakhstan has been most assertive in this regard, and founding president
Nursultan Nazarbayev’s claim that Kazakhstan can serve as a bridge between
Europe and Asia is a defining principle of its foreign policy.6 Over its short
independence it has developed a foreign service that now spans the globe,
including longtime Kazakh foreign minister Kassymzhomart Tokaev,7 who
has served as director general of the UN office in Geneva since 2011.

Table 11.1. Central Asian Exports (in millions of US dollars)

Table 11.2. Central Asian Imports (in millions of US dollars)

The Kazakhs were awarded chairmanship of the OSCE in 2010 and made
an unusually public diplomatic effort to get it. The United States, UK, and
several human rights groups opposed the Kazakh bid, citing lack of progress
in democratization. The final deal was something of a compromise; the
Kazakhs were awarded the chairmanship with a year’s delay, but also with no
strings attached (except that they would not change the fundamental nature of
the organization). Kazakhstan increased its regional clout across the board
during this period, holding the rotating chairmanships of the SCO in 2010–11
and the CSTO in 2012.

The Emergence of Kazakhstan

Kazakhstan has also emerged as the clear leader within Central Asia. The
Kazakh president, Nursultan Nazarbayev, has played the role of mentor,
especially for the politically inexperienced Turkmenistan president
Gurbanguly Berdymuhammedov. Nazarbayev even participated in some of
Berdymuhammedov’s first negotiations with Russian president Vladimir
Putin.8
With the strongest economy of the five Central Asian states, Kazakhstan is
also playing a stronger economic role in the region, with a GDP nearly
double that of its four Central Asian neighbors combined.9 Kazakh capital is
serving as an important stimulus for growth in neighboring Kyrgyzstan in
particular, especially in the latter country’s banking sector.10 Kazakh
investment has had more difficulty gaining a hold in Uzbekistan, given the
historic rivalry between the two peoples.
Kazakhstan has also led the region in lobbying for recognition on the
international stage. In 2013, the P5 + 1 talks on Iran’s nuclear program were
held in Kazakhstan’s commercial capital of Almaty. The Kazakh government
has expressed the desire to host future talks, underlining its own successful
history of voluntary nuclear disarmament. Kazakhstan has also formally
expressed interest in hosting an international nuclear fuel bank to be operated
by the IAEA on its territory, gaining the country further recognition among
the bank’s major funders in the United States and EU.

The Role of Uzbekistan

Uzbekistan is the only country in the region to border every other Central
Asian state, and it also shares a border with Afghanistan. The Uzbeks viewed
their country as the center of Central Asia but recognize that this role has
been involuntarily ceded to Kazakhstan. President Nazarbayev has begun to
develop some of the graciousness of a winner and has been more solicitous of
the feelings of his somewhat older colleague, Islam Karimov, to the south.
State visits between the Uzbek and Kazakh leaders as well as senior members
of each bureaucracy have been exchanged in recent years.
Tensions between Uzbekistan and Turkmenistan have also substantially
dissipated since Berdymuhammedov took office. While the underlying
disputes over water between the two states have not been solved, nor
continued improved treatment of Turkmenistan’s Uzbek minorities ensured,11
the leaders of the two countries have had formal meetings that seem to have
been quite cordial.
Uzbekistan’s relations with its neighboring upstream states, as well as
with much of the Western world, remain strained. President Karimov has
repeatedly attacked Tajik and Kyrgyz plans for large hydroelectric projects
on tributaries to the Amu Dar’ya and Syr Dar’ya rivers that irrigate Uzbek
farmland. In the case of the former, relations have nearly completely frozen;
the Tajik-Uzbek border was mined in the late 1990s, and the Uzbeks have
blocked many Tajik-bound imports, including electricity, from transiting
their territory.
Relations with the EU and the United States were complicated by the
international outcry over the number of civilian casualties in the May 2005
civil unrest in Andijon. The events led to formal sanctions on Uzbekistan by
the European Union12 and the loss of the US airbase at Karshi-Khanabad, as
well as the loss of much US military assistance. Uzbekistan dropped out of
the relatively anti-Russian GUUAM,13 rejoined the CSTO, and signed
bilateral military cooperation agreements with Russia.14 Uzbekistan also
became an ardent defender of an increased security role for the SCO.15 As the
US withdrawal from Afghanistan approaches in 2014, the Uzbeks have
shifted slightly back toward the United States, withdrawing from the CSTO
in 2012 and lobbying the United States to leave military equipment extracted
from the Afghan war in Tashkent’s hands.16

Turkmenistan in the Shadows

Turkmenistan’s foreign policy has been shaped by President Saparmurad
Niyazov’s advocacy of “positive neutrality,” a doctrine that was never clearly
elaborated. The Turkmen joined some international organizations, but not
others (like the SCO), and did not participate formally in any military
alliances. Under President Berdymukhammedov, Turkmenistan has been
willing to expand its understanding of “positive neutrality” to permit more
international memberships. In early 2013, Berdymukhammedov announced
that Turkmenistan would form a committee to explore membership in the
WTO.17
Turkmenistan has actively engaged its neighbors on several natural gas
pipeline projects, attempting to find alternative export partners to Russia. The
first line of a 1,800-kilometer pipeline from Turkmenistan to China’s
Xinjiang Uighur Autonomous Region was completed in 2009, and two
smaller pipelines connect Turkmen gas to Iran. Two large-scale projects
involving Turkmen gas, the Nabucco pipeline to Europe—declared dead in
2013—and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline,
have long been under discussion, though they have failed to yield results.

Kyrgyzstan’s Political Fragility

Small, mountainous, and lacking the hydrocarbon resources of its
downstream neighbors, Kyrgyzstan appealed to the West for financial
development support following its independence. The country secured
disproportionate amounts of support from Western governments and
organizations seeking to bolster Central Asia’s lone experiment in
democracy. But Kyrgyz foreign and domestic policy has suffered from the
effects of two revolutions as well as widespread popular unrest that have
hindered the development of rule of law.
The effects of this instability have also been harmful to foreign
investment, particularly in Kyrgyzstan’s precious metals mining sector.
Several times in 2012 and 2013, protesters demanded nationalization of the
Canadian-operated Kumtor gold mine, whose current operating agreement
was negotiated by the government of ousted president Kurmanbek Bakiyev.
In recent years hundreds of millions of dollars in claims have been made
against the Kyrgyz government by foreign investors because of contract
reversals caused by the frequent changes of government. The labor situation
has also deteriorated in recent years with spillover to foreign investment
projects, and Chinese workers have been a particular target in both gold-
mining and road-building operations.18 While China is a major donor to the
Kyrgyz, it is the country’s long-term debt to Russians that has troubled
Bishkek. As Kyrgyz-stan has continued to struggle with external debts, it has
turned increasingly toward Russia. In 2013, the Kyrgyz parliament voted to
close the US-operated Manas Transit Center, a move which Russia had
pushed for since 2005. In the year before the vote, Russia had announced it
would write off nearly $500 million in Kyrgyz debts, re-outfit the Kyrgyz
military, and fund the construction of the Kambarata-1 hydroelectric power
plant on the Naryn River.

Tajikistan on the Fringes

Shortly after declaring independence, Tajikistan plunged into a multiparty
civil war that dragged on until 1997, killing as many as 100,000 and
displacing nearly 1 million more. The conflict ended in a power sharing
agreement, guaranteeing the United Tajik Opposition representation in the
government led by President Emomali Rahmon. While some aspects of this
power sharing remain, including the Islamic Renaissance Party of
Tajikistan’s status as the only legal Islamic party in Central Asia, Rahmon
has consolidated most power in the country to the presidency.
Tajikistan today is geographically isolated and heavily indebted. The
country’s foreign debt in 2010 was an estimated 34.4 percent of GDP, which
though high is down significantly from 84 percent in the aftermath of its civil
war.19 Relations with neighboring Uzbekistan have deteriorated due to
disputes over Tajikistan’s proposed Rogun Dam,20 and both countries are
pursuing rail routes that bypass the other. A decaying electrical grid, corrupt
energy sector, and complete reliance on hydropower, combined with
Uzbekistan’s refusal to sell gas to Dushanbe in recent years have left large
swaths of the population without consistent winter electricity, further stifling
economic growth. Russia maintains a military division on Tajik territory, but
it has been much less forthcoming with financial assistance than it has been
in Kyrgyzstan.

THE RISE AND FALL OF US INFLUENCE IN CENTRAL

ASIA
One of the most striking things about Central Asia in recent years is the
relative decline of US influence in the region, which reached its apex in the
immediate aftermath of 9/11 when basing rights were granted by Uzbekistan
(Karshi-Khanabad) and Kyrgyzstan (Manas) and US foreign assistance
increased. High-level US government attention drifted away from this
problem in 2003 after the invasion of Iraq. There was some refocusing on
Afghanistan a few years later when the US State Department moved all the
Central Asian countries from the European bureau to the newly renamed
Bureau of South and Central Asian Affairs to try and facilitate Afghan
recovery as well as diminish Russia’s influence in the region.
As 2014 begins, the US administration views virtually all policies
concerning Central Asia through the prism of what it might mean for
Afghanistan’s political and economic recovery. In 2011, the US Department
of State proposed its “New Silk Road” strategy for the region, envisioning the
creation of trade linkages between Afghanistan and the countries of Central
and South Asia. Many of these projects are very long term in focus and are
plagued by funding problems, and even when all the pieces are in place,
international aid workers are often unable to do their jobs because of
persistent security risks. The new approach has also meant shifting
responsibility for Afghanistan’s economic development onto local actors in
Central and South Asia, a role which Central Asians are logistically
unprepared to meet.
This has meant that the Central Asian countries, with the exception of
Tajikistan, have seen relatively little benefit from the new US approach once
air-base rents and supplies are excluded. Some, like Kazakhstan, have even
been asked to directly chip in and provide development assistance to
Afghanistan,21 while states like Kyrgyzstan and Tajikistan are under pressure
by Washington to support hydroelectric projects that will provide electricity
to Afghanistan rather than the northern market in Russia.22 There has been an
unplanned flip side to Washington’s Afghan-centered policies in Central
Asia, which is increasing pressure by the SCO and SCO member states for
them to play a growing role, in coordination with NATO, in Afghanistan.23
From the Central Asian perspective, much of the current decline in US
influence can be traced to the mid-2000s, when the United States began
advocating President George W. Bush’s “freedom agenda.”24 While the
“freedom agenda” was intended to justify the ongoing human and financial
costs of the war in Iraq, it coincided conveniently with the end of the political
life span of two communist-era political figures. Georgia’s president Eduard
Shevardnadze fell from power in the “Rose Revolution,” and then Leonid
Kuchma’s plans to orchestrate his own succession went awry in Ukraine’s
“Orange Revolution.” Washington’s heralding of these events, in which US
public or privately funded NGOs played much-debated roles, left Central
Asia’s leaders feeling that they too might be targeted for “regime change,”25
especially after the ouster of Kyrgyzstan’s Askar Akayev in March 2005 in
the so-called Tulip Revolution.26
There is no evidence that the United States supported Akayev’s ouster, as
many US policy makers also believed Askar Akayev’s oft–publicly stated
promise that he was planning to observe his constitutionally mandated
requirement to leave office in late 2005, setting what Washington saw as a
critical precedent for all the Central Asian states.27
Less than two months after Akayev’s ouster there was a prison break and
massive public demonstrations in Andijon, just over the border from southern
Kyrgyzstan. While the Uzbek government had tolerated small demonstrations
to protest the trial of a group of local businessmen tied to a fringe religious
group,28 the presence of weapons and the loss of control by local authorities
triggered an altogether different and much more violent response by Uzbek
authorities. The events in Andijon continue to have an impact on US policy
toward the region. In December 2007, the US Congress debated introducing
sanctions against the government in Tashkent because of Karimov’s
continued refusal to offer a formal apology for what occurred. By contrast, an
“international investigation” organized by Tashkent, which included mostly
CIS states, found no fault with Tashkent’s actions.
The strikingly different reactions by the Western countries and the SCO
states really highlight the value differences between the two blocs. The West
was shocked by the lack of repentance by Tashkent, while the leaders of the
SCO states believed that the use of force was justified. The United States had
restricted military aid to Uzbekistan over human rights concerns in 2004, and
the EU imposed its own sanctions following the violence in Andijon. But
these restrictions were short-lived. The EU lifted its embargo in 2009, and in
2012, with US-Pakistan relations deteriorating and the withdrawal from
Afghanistan approaching, the Obama administration lifted the United States’
own ban on military assistance.
Any real emphasis on democracy building has been largely abandoned by
the Obama administration’s hard shift to how the region can be used to
support a more stable Afghanistan, represented by the New Silk Road
strategy’s emphasis on regional trade through the Office of US Trade
Representative’s Trade and Investment Framework Agreement (TIFA) and
transport and energy infrastructure.29
The United States has pushed for the construction of two large-scale
regional energy infrastructure projects, the TAPI pipeline and the CASA-
1000 hydropower transmission project. The former envisions the transport of
natural gas from Turkmenistan, holder of the world’s fourth-largest natural
gas reserves, through Afghanistan to Pakistan and India, with the Afghans
collecting transit fees. The latter would export excess hydropower produced
by Kyrgyzstan and Tajikistan in the summer months to broader markets in
Afghanistan and Pakistan. Both projects face massive political and economic
obstacles, particularly in the case of TAPI, which not only faces security
concerns but was also largely a political project from the start, with the
United States aiming to push a viable alternative to the Iran-Pakistan pipeline
already under construction.
As the US withdrawal from Afghanistan approaches, it has become clear
that there is little appetite on any side for a sustained US military presence in
the region. Since 2005 the Manas airfield in Kyrgyzstan is the only US
military facility in the region, and it was downgraded to a “transit center” in
2009 by President Kurmanbek Bakiyev. In June 2013, the Kyrgyz parliament
voted by an overwhelming majority to bar the United States from renewing
its lease beyond its July 2014 expiration date. After July 2014, US military
involvement in Central Asia will be limited to an array of logistics centers for
transport of non-lethal goods through NATO’s Northern Distribution
Network.

THE FALL AND PARTIAL RISE OF RUSSIA

When the USSR broke up, Kremlin politicians assumed that Russia would be
the dominant power in Central Asia, able to use the natural resources of these
states to serve Russia’s own economic development and to back Russian-
sponsored international initiatives. In much the same spirit of the United
States’ nineteenth-century Monroe Doctrine, Russia’s foreign minister
Andrei Kozyrev issued the “Kozyrev Doctrine” in 1994, claiming Central
Asia to be part of a Russian sphere of influence.30 But in the early 1990s,
Russia was mired in its own problems, and Boris Yeltsin’s presidency was
further crippled by his own ill health and divisions within the ruling elite.
These reformers decided to basically evict the Central Asian and South
Caucasian states from the ruble zone in late 1993 as a way to help Russia deal
with runaway inflation and its debt crisis. By so doing, they lessened Russia’s
economic hold over these countries.31 This decision, more than any other,
helped the Central Asian states make the transition from de jure to de facto
independence.
Russia applied the same policies across the region—pressing all states
equally hard, for example, to grant ethnic Russians rights of dual citizenship,
that local citizenship could be combined with Russian citizenship—but there
were no ready mechanisms to achieve uniform influence. None of the post-
Soviet states were willing to transfer sovereignty to the Commonwealth of
Independent States (CIS), which left the Russians largely dependent upon
bilateral arrangements to achieve their economic and geopolitical claims.
Most Central Asian leaders have complicated attitudes toward the Kremlin
and its policy makers. Russia is still appealed to when leaders get in trouble.
All the aspirants in Kyrgyzstan’s “Tulip Revolution” sought Moscow’s
support in the run-up to parliamentary elections, and Kurmanbek Bakiyev
sought the Kremlin’s blessing when assuming temporary power as president,
offering concessions greater than those made by Akayev, leaving Moscow
with closer military ties to Bishkek than those enjoyed by NATO. Similarly,
Islam Karimov went to Moscow in the immediate aftermath of Andijon,
reportedly offering the Russians full basing rights in the country, an offer that
Moscow turned down.32
Russia played its largest role in Tajikistan. The presence of limited
numbers of Russian troops and Russian border guards helped facilitate the
transition from civil war to civil order.33 Russia’s influence began to decline
after the signing of a national reconciliation agreement in 1997. From that
time on, international financial institutions (IFIs) began working with the
Tajik government to develop economic stabilization projects. These efforts
intensified in 2002 with the opening of Afghanistan and the departure of
Russian border guards.34 Once Russia lost the right to guard the old Soviet-
era Central Asian borders, it began to place far more priority on securing its
own national borders, including over 3,000 miles of border with
Kazakhstan.35
Russia continues to play a significant, but selective, role in the domestic
politics of many of the Central Asian states. In the run-up to the overthrow of
Kyrgyz president Kurmanbek Bakiyev in 2010, Russia raised its tariffs on
Kyrgyz-bound petroleum exports, causing prices to spike in the Kyrgyz
Republic and amplifying the discontent long brewing over Bakiyev’s corrupt
government. In the post-Bakiyev years, Russia has offered Kyrgyzstan
generous financial support as a means of bolstering its influence in the
country. In 2012, Moscow agreed to write off nearly $500 million in Kyrgyz
debt in exchange for an extension of Russia’s lease on Kant Air Base and
pledges by the Kyrgyz government to shut down the US base at Manas. A
few months after Uzbekistan announced its withdrawal from the Russia-led
Collective Security Treaty Organization (CSTO), Kommersant newspaper
announced Russia’s intentions to provide $1.5 billion in direct military aid to
Kyrgyzstan and Tajikistan.36
But Moscow has also shied away from any direct military involvement in
Central Asia since the end of the Tajik conflict. During the 2010 ethnic unrest
in Osh, which left hundreds dead and displaced hundreds of thousands more,
both Russia and the CSTO ignored the interim Kyrgyz government’s requests
for assistance, leading some to question Russia’s capability and commitment
to managing crises in its backyard.
Russia continues to lose ground in controlling Central Asia’s natural
resource base. The Russia-Turkmen relationship went sour in the early 1990s,
and between 1997 and 1999 Turkmenistan stopped shipping gas to Russia
entirely. Although Russia met its export commitments to countries beyond
the borders of the CIS, those in Russia and other former Soviet states
experienced shortages (in some cases justified by Moscow because of unpaid
bills).
Russia’s relationship with Turkmenistan, in particular, has fluctuated in
the past two decades, influenced by both the price of gas in Europe and the
rise of China in the Turkmen gas market. After years of difficult relations, the
two countries reached an agreement in 2003 which shifted the gas trade to a
cash basis from the earlier part-cash, part-barter arrangement.37 But it was
only in 2008 that Gazprom first offered prices that were equal or better than
what the Turkmen had secured from China.
European demand for Russian gas, including its Turkmen imports,
dropped significantly with the advent of shale gas in the United States, which
drove down global prices, and Gazprom demanded that Turkmenistan
decrease either its export volumes or its prices. In 2009, there was an
explosion along a portion of the fourth branch of the Central Asia Center
pipeline carrying gas from Central Asia to Russia. The cause of the explosion
is disputed, with Turkmenistan accusing Russia of unilaterally lowering the
volume of gas imported, and the Russians claiming inadequate pipeline
maintenance by the Turkmen.38 With new export routes open to both China
and Iran, the Turkmen halted all Russian gas exports for over six months
until a new purchase agreement with Gazprom was reached.
Overall, Moscow’s most important and most durable relationship is with
Kazakhstan, and the Kazakhs view Russia as their most critical partner.
Russia is also pleased with Nazarbayev’s assumption of a leadership role in
Central Asia. While not acting as a surrogate for Russia, much of
Nazarbayev’s agenda overlaps that of Moscow.
Russia has lost less ground on energy in Kazakhstan than in Turkmenistan.
Under Boris Yeltsin, Russia tried to use Kazakhstan’s energy debts and
geographic isolation to limit its economic development. In response, the
Kazakhs developed a multivectored foreign policy and investment strategy in
order to survive. By contrast, President Putin tried a more positive approach,
using the carrot more frequently than the stick, creating a series of
partnerships between key industries, including in the energy sector. Putin has
been a tough and sometimes underhanded negotiator. For example, at the end
of a May 2007 summit between Nazarbayev and Putin, the former agreed to
ship Kazakh oil through the Russian-sponsored Burgas-Aleksandropolis
pipeline project, believing that he had secured Putin’s approval for expanding
the CPC (Caspian Pipeline Consortium) pipeline that ships Tengiz oil across
Russia. However, Putin made it clear that Russia was still simply considering
CPC expansion and had not yet fully committed to it.39
Hoping to finally regularize Russia’s role in its economy in 2010,
Kazakhstan became a founding member of the Eurasian Customs Union
(ECU), along with Belarus and Russia. The union is a deep economic
integration initiative, which members anticipate will lay the groundwork for
Moscow’s proposed Eurasian Economic Union. While the ECU formally
splits decision-making powers between the three member states, the sharing
of tariffs is weighted to Russia’s advantage because of the size of its
economy, and the initiative is largely seen as Kremlin driven. It has resulted
in Kazakhstan harmonizing its policies on tariffs, trade, migration, and
technical regulation, among others, primarily to match those of Russia. The
success of the union in achieving some of its integration goals has been
looked upon with suspicion in much of the former Soviet Union, with many
Central Asian elites viewing the initiative as a political project intended to
reassert Russian influence over its neighbors.
 Russia’s relations with the Central Asian states show that competition for
influence in the region has done little to change Moscow’s view that Central
Asia is very much Russia’s backyard. Even as Russia’s economic monopoly
has faltered, it maintains a strong presence in the region through a calculated
mixture of economic and political carrots and sticks, all of which in some
way hark back to the shared Soviet past, which for many is becoming ever
more distant.

CHINA’S GROWING ROLE IN CENTRAL ASIA

China’s rising influence in the region is quickly changing how much Russia
is able to influence the economy of Central Asia. Central Asia’s leaders seem
to feel less competent about their ability to manage the relationship with
China than they do with Russia, with whom they share historical, linguistic,
or cultural experience. At the same time that they admit awe over China’s
extraordinary economic accomplishments, they seem less concerned about
China’s capacity to overwhelm all of the economies in the region through
Beijing’s policy of large-scale foreign investment.40
The new Chinese leadership is also going to great efforts to try to reassure
Central Asia’s leaders that Beijing’s intent is solely to stimulate the
development of the economies of the region. To this end, President Xi
Jinping took a ten-day tour of the region in September 2013, announcing a
Chinese-sponsored new “Silk Road Economic Belt” initiative in a major
address delivered at Nazarbayev University in Astana, with President
Nursultan Nazarbayev in attendance.41
While China has not come to monopolize the economies of the Central
Asian states, it has rapidly expanded its economic presence to a level often
surpassing Russia. The region’s energy sector is growing, though its
investments fall short of those by Western super-major energy companies,
who control the three largest hydrocarbon projects in the region (Kashagan,
Karachaganak, and Tengiz, all in Kazakhstan). But even this is changing. In
2013, Kazakhstan exercised its right of first refusal to purchase
ConocoPhillips’s 8.4 percent stake in the Kashagan project, with the
announced intention of selling the stake to the China National Petroleum
Corporation (CNPC), refusing a bid that the Indian Oil and National Gas
Corporation (ONGC) had previously made.42 And while Russia still controls
all transit routes for exporting Central Asian gas to Europe, the opening and
planned rapid expansion of the Central Asia–China pipeline in 2009 broke
Russia’s monopoly and created attractive new market options for the region’s
hydrocarbons.
As tables 11.1 and 11.2 illustrate, China has rapidly risen as an important
trading partner for all of the Central Asian states, particularly as export
partner for the region’s major energy producers. Turkmenistan’s exports to
China are now valued at forty-four times its exports to Russia, and
Kazakhstan’s are more than double, in both cases largely thanks to the sale of
oil and gas. In 2007 this was not the case, with only Kazakhstan exporting
more to China than to Russia and only Kyrgyzstan importing more from
China than from Russia. Official trade statistics have never reflected the
considerable illegal trade between the Central Asian countries and China, but
its relative significance has diminished considerably in recent years.
Central Asian leaders, and in many cases the general populace, fear that
their economies could be overwhelmed by migrant laborers and small-scale
entrepreneurs from China. It is hard to know how many Chinese citizens have
settled in Central Asia. Kyrgyz scholars estimated that anywhere from 20,000
to 120,000 people had come there from China by 2006, but independent
scholarly estimates vary wildly, and official census data do not capture the
predominant form of short-term labor migration.43 The Kazakh government’s
policy of repatriating Kazakhs from China and Mongolia (Oralman) is
rumored to have led to illegal Han Chinese migration under this program.
There is frequent media coverage in both the Central Asian and Russian press
about the risks of Chinese migration, some of which is hysterical in tone,44
largely because of legends of the brutality of eighteenth-century Chinese
forces along the region’s loose borders.
The Chinese, aware of Central Asian concerns, took something of a “go
slow” approach at the outset, concentrating on reducing any direct security
risks that might be posed by the independence of these states. China’s short-
term concerns were focused on border delineation issues and minimizing
involvement by the Central Asian states in China’s own ethnic minority
issues.
Large Uighur populations persist in Kazakhstan and Kyrgyzstan, where
they are the fifth-largest ethnic group according to each country’s latest
census, and Uighur nationalist groups had found their treatment easy in the
confusion of the last years of Soviet-rule and first years of independence.45
By the mid-1990s their activities had been sharply restricted, in large part
because of pressure from Beijing to have these groups designated as terrorist
organizations. There are conflicting accounts of how difficult it was to
delineate the Kazakh and Kyrgyz borders with China. The Tajik-Chinese
border is quite small, and its delineation was less controversial than in
Kazakhstan and Kyrgyzstan, where critics of the government were very vocal
about how much “ancestral land” had been turned over to Beijing’s control.
In the Kyrgyz case, protests by a parliamentarian (Azimbek Beknazarov) led
to his arrest and a national political crisis when some of his protesting
supporters were killed by police near the town of Aksy.46 In reality, the
Kazakhs and even the Kyrgyz did not lose sizable amounts of land in the
border delineation process, although critical water usage issues on the
Chinese side of the border remain unresolved.47
In recent years China has adopted a much higher profile, partly to
counterbalance the US military presence and Putin’s success in binding these
states more closely to Russia, but also to establish natural resource links for
its own rapidly developing Xinjiang Uighur Autonomous Region. China has
been active in Kazakhstan’s oil industry since 1997, bringing a jointly owned
2,900-kilometer oil pipeline from Atyrau to Alashankou on the Kazakh-
Chinese border into operation in 2006. A 750-kilometer link from Kumkol to
Kenkiyak came online in 2009, bringing more Chinese-owned assets to the
main pipeline.
China’s acquisition of oil assets has been hampered by the unwillingness
of Western energy companies to partner with them. A 2003 bid by China
National Offshore Oil Corporation (CNOOC) and China Petroleum and
Chemical Corporation (Sinopec) to buy British Gas’s share of Kazakhstan’s
massive offshore Kashagan deposit was blocked by the Western consortia
partners. China’s rapid rise in the Kazakh oil sector is reflected in a 2013
move by KazMunaiGas to block India’s ONGC from purchasing an 8.4
percent share in Kashagan being sold by ConocoPhillips with the widely
understood intention of selling the share to the China National Petroleum
Corporation (CNPC). CNPC raised its profile in Kazakhstan throughout the
2000s, managing to acquire the small North Buzachi field and purchasing
PetroKazakhstan in 2005 for $4 billion, giving them the assets from the
Kumkol field and shared control of the Shymkent refinery.48
China has dramatically increased its position in Central Asia’s gas market,
buying up smaller and medium-sized fields, and announcing their interest in
the few giant projects where exploitation rights have yet to be sold. Beijing’s
biggest success has been in Turkmenistan, where they contracted to buy 30
billion cubic meters of Turkmen gas annually beginning in 2009 and to
develop the greenfield projects necessary to produce it. The gas is brought
from Turkmen fields through Kazakhstan and Uzbekistan via the two
currently active lines of the Central Asia–China pipeline to Khorgos in
Xinjiang. The 3,666-kilometer pipeline was completed in just over two years,
and a third line, which will bring pipeline capacity up to 55 billion cubic
meters per year, is currently under construction, and another route, which will
branch off the main route in Uzbekistan, cross Kyrgyzstan, and then enter
China, is set to start construction in 2016. An additional gas pipeline from
Beynu to Shymkent, inaugurated in 2013, will link gas from western
Kazakhstan to China in 2014.
China is an important source of developmental assistance, largely due to
its interest in stabilizing the areas surrounding restive Xinjiang, where there
were violent riots in the summers of 2009 and 2013. Beijing has lent billions
of dollars to the Tajiks at 1 percent interest in recent years,49 a far lower rate
than international financial institutions offer, and has made offers of 2 percent
loans to Turkmenistan.50
China now has a bigger role in Central Asia’s security scene, although
smaller than either the United States’ or Russia’s. Beijing has focused on
bilateral initiatives and has offered substantial military assistance to
Tajikistan, Uzbekistan (especially in the area of telecommunications), and
Kyrgyzstan. China also has been a participant in SCO joint military exercises,
something of a departure for Beijing. The SCO’s first-ever joint military
exercises were held in the summer of 2003, the largest (“Peace Mission
2007”) just before the 2007 SCO summit. These exercises were intended as
coordinated military exercises rather than as an effort to provide a single
integrated military response.

THE ROLE AND RELEVANCE OF THE SCO

The existence of the SCO has played only a supporting role in the expansion
of Chinese influence in the Central Asian region. While Beijing was
instrumental in its establishment, the organization itself is still in flux,
undecided about how to develop its mission and how widely to expand its
membership. While there is a lot of talk about expanding both, none of the
members (large states and small alike) seem terribly enthusiastic about either,
especially if one goes by off-the-record statements rather than by official
accounts of the meetings.51 After more than a decade of existence in its
current form, it is still difficult to predict the SCO’s trajectory, particularly
with regard to how the organization will evolve after the 2014 withdrawal of
NATO troops from Afghanistan. Throughout its history, the SCO has largely
served as a forum for discussion of themes of common interest to its member
states and not much more. The organization holds yearly multilateral counter-
terrorism exercises, but its members have insisted that it is not a military
bloc, and China prefers bilateral to multilateral engagement with its Central
Asian partners. And while both Russia and China continue to push the SCO
as a medium for economic cooperation, both countries continue to pursue
almost exclusively bilateral foreign economic policies in Central Asia.
The basic lack of trust among SCO members is a major reason why the
organization has and will have difficulty turning itself into an organization
that resembles either the OSCE or NATO in the area of security relationships,
or the European Union (even in its earlier incarnation as the European
Community) in the area of economic cooperation.
It is particularly hard to imagine that the SCO could ever develop into
anything resembling NATO, an organization that has had sixty years to
define a shared security mission and the shared commitment to preserve
democratic systems. In many respects NATO is an old-style organization,
reflecting the goals of the Cold War, but its longevity as well as nominally
shared value systems have given the organization continued longevity even
after the Cold War that caused its formation had ended.
The SCO is also an old-style organization, an attempt at a bloc or counter-
bloc to help protect against the encroachment of other blocs (or states) on the
geopolitical and domestic interests of the members, as well as a forum for
regulating shared security concerns. The latter interest helps define the
former interest but does not compensate for the absence of a shared ideology
among the member states or a long history of cooperation for all of the
members, at least one that was purely voluntary.
All recognize that the relationships created out of their shared pasts need
to be regulated, and the presence of China in the SCO provides a different
kind of ballast than exists in the CIS. But the current membership of the SCO
is ill-equipped to function as an organization that provides an integrated
security response to perceived common security risks.
To date even the CSTO has failed to provide an integrated security
response to a concrete threat in any of the countries of that organization, even
when the Kyrgyz interim government requested CSTO assistance during the
2010 violence in Osh. They do plan regularly for such a concerted response
but have yet to test their capacity in action. Unlike the SCO, the CSTO is
built on the remains of a common command-and-control system, that of the
Red Army, and there is still a common language of command possible, at
least among the officer corps.
The SCO needs to integrate the Chinese People’s Liberation Army into the
old Soviet command structure, something that seems highly problematic.
China has a very limited history of participating in multilateral security
organizations, though the organization’s annual “Peace Mission” anti-
terrorism exercises have expanded Chinese multilateral military engagement.
At best, the SCO seems likely to offer a coordinated response to common
problems, and that is a considerably less comprehensive form of joint
response. Unless the SCO assumes the capacity to function as a security
organization that has field response capability, it is difficult to be too
optimistic that it will be able to move beyond its current stage of confidence-
building measures and non-traditional security cooperation, particularly in the
area of counter-terrorism.
The withdrawal of US troops from Afghanistan in 2014, and the reduced
US presence in the region more broadly, may provide the opportunity for the
SCO to define a more concrete security role for itself. The topic of
Afghanistan’s security has been a major focus at SCO summits in recent
years, though the organization has thus far failed to produce concrete policies
on the issue. It has, however, increased engagement with Afghanistan itself,
accepting the country as an observer in 2012. SCO policy in Afghanistan was
the central issue at the 2013 summit in Bishkek.
The SCO might find it easier to be an organization that fosters economic
cooperation between its members, serving as a force for regularizing trade
and tariffs. Here too, though, it is hard to imagine that the organization will
have the capacity to provide any kind of real economic integration, save
under the umbrella of the WTO. But four of the six SCO countries are
already WTO members, rendering this function somewhat superfluous. If all
members of the SCO are members of the WTO, the latter organization will
likely provide a sufficient mechanism for cooperation. But if Uzbekistan (and
Turkmenistan if it joins the SCO) remains outside of the WTO after
Kazakhstan’s anticipated accession, then the SCO will be further
handicapped in trying to regulate economic trade. It will, however, remain
able to sponsor regional economic projects, and should China decide to use
the SCO umbrella to advance Beijing’s foreign assistance program, that too
would give the organization greater vitality.
The formation of the Moscow-led Eurasian Customs Union in 2010
harmonized many aspects of Russian and Kazakh trade policy, often at the
expense of Kazakh trade with China. The union is expected to lay the
groundwork for the Eurasian Economic Union, anticipated to form in 2015,
further insulating Russia and Kazakhstan from the Chinese economy. The
anticipated accession to the Customs Union of Kyrgyzstan, whose trade with
China has vastly outpaced its Russia trade in recent years, will further
complicate any attempt to transform the SCO into a functional trade bloc.
While China will continue to play a major, and often the dominant, role in
Central Asian trade, it is unlikely that vague commitments to cooperation
within the SCO framework will outweigh Sino-Russian economic
competition in the region.
It is also highly unlikely that the SCO will develop into any sort of energy
club, as has been repeatedly proposed by Moscow since 2007. Russia and
China are competing for Central Asia’s oil, gas, and hydroelectric power
(largely in the case of transit for Russia). It does not seem that it would truly
be in China’s best interest to have the SCO play a major role in this area, as
Beijing is successfully using bilateral relationships to advance its interests in
the energy sector. To function as an energy club, the SCO would have to
admit Iran, and possibly Pakistan and India, and then likely consider taking in
Azerbaijan and Turkey—turning the organization into something of a smaller
and less effective OPEC (Organization of Petroleum Exporting Countries).
While Iran, Pakistan, and India currently hold observer status and Turkey was
recognized in 2012 as a “dialogue partner,” there has been no rush to accept
any of these countries as full members.
The SCO could potentially play a highly effective role in regulating water
usage and helping to sponsor the development of a region-wide hydroelectric
system. Disputes over water are of concern throughout the region, though
they have been particularly problematic in Uzbekistan, where concern over
proposed hydroelectric projects in Kyrgyzstan and Tajikistan has caused
relations between the states to deteriorate. But while there is room for a
regional organization to step in to mediate these disputes, the SCO has done
little to address the issue.
The SCO does play an important role as a forum for permitting the states
of the region to discuss shared problems and possible solutions to them.
China’s continued commitment to the SCO, in particular, provides an outlet
that is not dominated by Russia through which Central Asian leaders can
address issues facing the region. Bringing Iran, India, Pakistan, and more
recently Afghanistan and Turkey to the table as observers was an important
step in furthering regional dialogue on security and economic development.
But as with the organization’s other functions, it has yet to create successful
strategies for dealing with these problems or a strong institutional presence to
advance its interest. Given the inbred competition and lack of trust between
its various members, it will take a lot of still undemonstrated national will by
the various member states to succeed in doing this.

OUTLOOK

Whether or not the SCO succeeds does not change the fact that the
dissolution of the USSR and the ability of all five Central Asian states to
weather the vicissitudes of over two decades of independence have an impact
on European as well as Asian understandings of geopolitics and security.
Physically, virtually all of Central Asia (save the westernmost part of
Kazakhstan) lies in Asia, but much like Russia, or the USSR before it, the
states in this region seek to create a role for themselves in both Europe and
Asia. And being part of an unbroken landmass that spans the two, Central
Asia’s leaders refuse to choose between them, their invocations of their
Asianness as a justification for their non-democratic practices
notwithstanding.
Central Asia’s position in the world is very much in flux, changing along
with the global economy and security situation. Whereas in 2006 Europe far
surpassed East Asia as a trading partner for nearly all the Central Asian
states, China’s rapid rise has led it to take the dominant trading position from
both the EU and Russia. South Asia remains rather inconsequential,
especially when the Turkmen-Iranian economic relationship is excluded.
In terms of their basic security needs, once China is excluded, the large
states of both Asia and Europe seem far away. The security horizon of most
Central Asian states is what is described in this chapter—Russia, China,
Afghanistan, and the former Soviet republics with which they share borders.
The region’s leaders remain concerned as to whether the 2014 Afghan
transition will destabilize Central Asia through spillover violence, increased
drug trade, and a potential influx of radical Islamist ideology, but they have
not yet found an effective regional mechanism for addressing these issues.
The situation in Iran, on the other hand, does not trouble them, for the
ideological regime there has proven less directly pernicious than the
fundamentalists from Saudi Arabia, the religious center for Central Asia
which is Sunni, not Shia, by heritage and practice. Developments in Pakistan
bother them a lot more, but they see no diplomatic leverage to manage this
and hope that tighter border controls and more effective counter-terrorist
measures will be protection enough for them.
Moreover, while both Western and Asian leaders have described Central
Asia as a region of great importance in the years after September 11, once
China is excluded the realities on the ground in Central Asia do little to bear
this out. The United States’ New Silk Road strategy seems largely utopian, as
multilateral institutional funding for projects seems certain to become more
limited, and trade between even the post-Soviet Central Asian states has been
hampered by political disputes, geography, and long-held ethnic rivalries,
while the United States is likely to have fewer funds and less leverage to push
its initiatives after 2014. By contrast, China has invested billions of dollars in
infrastructure throughout the region and will almost certainly continue to do
so, but the Central Asian states remain wary of its size and economic power,
even as they benefit from the alternative it presents to economic dependence
on Russia.
But while China, Russia, and to an extent the United States will continue
to play an important role in the region, much of Central Asia’s future
economic and security outlook will depend on how its states manage their
own affairs. Four of the five states have experienced instances of internal
unrest leading to significant loss of life in the past decade, and two of the
states (Uzbekistan and Kazakhstan) are still led by the same men who
presided at independence and a third (Tajikistan) has had the same ruler since
late 1992. Transitions are inevitable in all three states, and likely to come
quite soon in Uzbekistan and Kazakhstan with their septuagenarian leaders.
In all five countries new people are gaining high office who were children or
adolescents at independence. The decisions made by these new ruling elites
on economic openness, political alliances, and consolidation of power will do
much to redefine once again Central Asia’s “place” among the region’s
peripheral powers.

NOTES
I wish to thank Eli Keene for his contributions to the preparation of this revised version of my
chapter.
1. Turkmenistan is the only Central Asian state that is not a member of the SCO. Uzbekistan joined
the organization in 2001.
2. The Eurasian Customs Union, which went into effect in January 2010, is a deep economic
integration initiative between Belarus, Kazakhstan, and Russia. The union removed customs controls
from the borders between the three member states, creating a common economic space, which is being
used as a basis to develop a range of shared economic and regulatory policies.
3. Zainiddin Karaev, “Water Diplomacy in Central Asia,” Middle East Review of International
Affairs 9, no. 1 (March 2005).
4. Firdavs Yakubov and Johmahmad Rajabov, 2006 Mine Action in Tajikistan (Standing Committee
Meeting on the Article 5 Implementation Progress of Tajikistan under the Ottawa Convention, April
2007), slide 10, http://www.apminebanconvention.org/fileadmin/pdf/mbc/IWP/SC_april07/speeches-
mc/Tajikistan-25April2007slides.pdf.
5. There are three Tajik exclaves, all located in the Ferghana Valley region where Kyrgyzstan,
Tajikistan, and Uzbekistan meet.
6. Nursultan Nazarbayev, “Kazakhstan’s Strategy of Joining the World’s 50 Most Competitive
Countries,” 2006 State of the Nation Address, http://www.kazakhstanembassy.org.uk/cgi-
bin/index/254.
7. Kassymzhomart Tokaev served as Kazakhstan’s foreign minister from 1994 to 1999 and from
2002 to 2007. From 1999 to 2002, he was prime minister of Kazakhstan. He held numerous posts in
Kazakhstan’s Foreign Ministry in the 1990s.
8. Jean-Christophe Peuch, “Russia: Energy Summit Gives Putin New Trump Card,” Radio Free
Europe/Radio Liberty, May 16, 2007, http://www.rferl.org/featuresarticle/2007/05/2c66d7b7-9c7e-
465e-a263-11a3fbab043a.html.
9. According to IMF’s 2012 estimates, Kazakhstan’s GDP is $196.4 billion, 583 percent larger than
Turkmenistan’s, which is in second place with $33.6 billion, and 89 percent larger than its 2007 GDP
of $103.1 billion, http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/weorept.aspx?
sy=2005&ey=2013&scsm=1&ssd=1&sort=country=&ds=.&br
1&pr1.x=52&pr1.y=0&c=922%2C923%2C925%2C916%2C917%2C927&s NGDPD&grp 0&a=.
10. “Temir Sariev: ‘Za 5 let Kazakhstan investiroval v ekonomiku Kyrgyzstana 1 milliard dollarov,’”
KNews, April 4, 2012, http://www.knews.kg/econom/13764_temir_sari ev_za_5_let…kazahstan…
investiroval_v_ekonomiku_kyirgyizstana_1_milliard_dollarov.
11. Bernd Rechel and Martin McKee, Human Rights and Health in Turkmenistan (London: European
Center of Health of Societies in Transition, 2005), 14.
12. C. J. Chevers, “Europeans Set Arms Embargo to Protest Uzbeks’ Crackdown,” New York Times,
October 4, 2005.
13. The GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, and Moldova) Group was formally
founded in 1996 as a political, economic, and strategic alliance designed to strengthen the
independence and sovereignty of these former Soviet Union republics. Uzbekistan joined the
organization in 1999 and withdrew from membership in 2005.
 14. Esra Hatypodlu, “The New Great Game in the South Caucasus and Central Asia: The Interests of
Global Powers and the Role of the Regional Organizations,” Turkish Review of Eurasian Studies
(Foundation of Middle East and Balkan Studies), 2006, 85–128.
15. The condemnation of a permanent US military presence in Central Asia and discussions on
enhancing the SCO’s security role were highlights of the June 2005 SCO summit in Astana. Kabar
Information Agency, “Seven Documents Signed at SCO Meeting,” KABAR Current Affairs, July 5,
2005, http://en.kabar.kg/index.php?area=1&p=news&=newsid=18.
16. Andrew E. Kramer, “As NATO Prepares for Afghan Withdrawal, Uzbekistan Seeks War’s
Leftovers,” New York Times, January 31, 2013.
17. “Turkmenistan gotovitsya k peregovoram po vstupleniyu v VTO,” Trend.az, January 19, 2013,
http://www.trend.az/regions/casia/turkmenistan/2109908.html.
18. See “Kyrgyz Officials Probe Attack at Chinese-Operated Gold Mine,” Radio Free Europe/Radio
Liberty, August 31, 2011,
http://www.rferl.org/content/kyrgyzstan_officials_probe_attacks_at_chinese_operated_gold_mine/24313312.html
and Makhinur Niyazova, “China Road Workers Attack Kyrgyz Police, Security Services’ Officers,”
24.kg, July 3, 2013, http://eng.24.kg/incidents/2013/07/03/27463.html.
19. Martha Brill Olcott, Tajikistan’s Difficult Development Path (Washington, DC: Carnegie
Endowment for International Peace, 2012), 88.
20. The Rogun Dam was first proposed in the 1960s as part of a series of hydroelectric projects on the
Naryn River, a major tributary to the Amu Dar’ya. The design favored by Tajik president Emomali
Rahmon includes a 335-meter dam, the world’s tallest, with a 13-billion-cubic-meter reservoir. Uzbek
president Islam Karimov has repeatedly condemned the project, arguing that it will deprive Uzbekistan
of the water flows it uses for irrigation. For more information, see Eli Keene, “Solving Tajikistan’s
Energy Crisis,” Carnegie Endowment for International Peace, March 25, 2013,
http://carnegieendowment.org/2013/03/25/solving-tajikistan-s-energy-crisis/fta8.
21. Personal communication of Kazakh diplomats with author.
22. Martha Brill Olcott, “U.S. Policy in Central Asia: Balancing Priorities (Part II)” (testimony
prepared for the Committee on International Relations: Hearing on the Middle East and Central Asia,
April 26, 2006), http://carnegieendowment.org/2006/04/26/u.s.-policy-in-central-asia-balancing-
priorities-part-ii/34q7.
23. Leila Saralayeva, “Russia, China, Iran Warn U.S. at Summit,” Washington Post, August 16,
2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/08/16/AR2007081601221.html.
24. George W. Bush, “State of the Union Address” (White House, February 2, 2005),
http://georgewbush-whitehouse.archives.gov/news/releases/2002/01/20020129-11.html.
25. Gregory Gleason, “The Uzbek Expulsion of U.S. Forces and Realignment in Central Asia,”
Problems of Post-Communism 53, no. 2 (March/April 2006): 50.
26. The 2005 Kyrgyz parliamentary elections were held in February and March 2005, falling short of
OSCE standards for democratic elections. The belief that the election had been rigged by the
government led to widespread protests, forcing President Askar Akayev to flee the country on March
24. Christopher Pala, “Protests Force Authoritarian Leader to Flee in Kyrgyzstan,” New York Times,
March 25, 2005.
27. According to section 2 of Article 44 of the Constitution of the Kyrgyz Republic, Askar Akayev’s
term would have expired by December 2005.
28. Akromiya is an Islamist organization founded by Akrom Yo’ldoshev that has been designated as
terrorist by the government of Uzbekistan, despite claims of its membership that they are committed to
the peaceful introduction of an Islamic government.
29. “Framework Agreement between the Government of the United States of America, the
Government of the Republic of Kazakhstan, the Government of the Kyrgyz Republic, the Government
of the Republic of Tajikistan, the Government of Turkmenistan, and the Government of the Republic of
Uzbekistan Concerning the Development of Trade and Investment Relations,” TIFA, June 1, 2004.
 30. Alexander A. Sergunin, “Russian Post-Communist Foreign Policy Thinking at the Cross-Roads:
Changing Paradigms,” Journal of International Relations and Development 3, no. 3 (September 2000).
31. Of the five Central Asian states, only Kyrgyzstan had previously chosen to leave the ruble zone
before Russia called on ruble zone member states to turn over their foreign deserves to Russia and to
have co-ordinate foreign investment strategies with Moscow. This was by definition unacceptable to all
but Tajikistan, which was in the middle of a civil war. Martha Brill Olcott, Anders Aslund, and
Sherman W. Garnett, Getting It Wrong: Regional Cooperation and the Commonwealth of Independent
States (Washington, DC: Carnegie Endowment of International Peace, 2000).
32. Personal communication with author.
33. When the Soviet Union dissolved at the end of 1991, the main military force in Tajikistan was the
201st Motorized Rifle Division, whose position and resources the Russian Federation inherited.
34. Russian guards left the Tajik-Afghan border in July 2005.
35. “Russia-Kazakhstan Border Agreement Crucial—Diplomat,” RIA Novosti, January 8, 2006,
http://en.rian.ru/russia/20060108/42892424.html.
36. Kabai Karabekov, “Kirgiziyu i Tadzhikistan vooruzhat rossiiskimi dengami,” Kommersant,
November 11, 2012, http://www.kommersant.ru/doc/2060903.
37. While the Turkmen often complained bitterly about this arrangement, Turkmen president
Saparmurat Niyazov and his family were generally believed to have directly profited from the resale of
bartered goods and to have had at least a small share of the profit generated by transshipment to
Ukraine.
38. Bruce Pannier, “Pipeline Explosion Raises Tensions between Turkmenistan, Russia,” Radio Free
Europe/Radio Liberty, April 14, 2009,
http://www.rferl.org/content/Pipeline_Explosion_Stokes_Tensions_Between_Turkmenistan_Russia/1608633.html
39. Martha Brill Olcott, “The Kazakh-Russian Relationship,” Russian Analytical Digest, no. 29
(October 16, 2007): 16.
40. This is based on personal communication with the author.
41. Xi Jinping, “Speech Delivered at Nazarbayev University,” Astana, September 7, 2013,
http://english.cntv.cn/program/newsupdate/20130907/102105.shtml.
42. “ONGC Loses Kashagan Oil Field to China,” Financial Express, July 3, 2013,
http://www.financialexpress.com/news/ongc-loses-kashagan-oil-field-to-china/1136759.
43. Rafis Abazov, “Chinese in Central Asia: Loyal Citizens or Fifth Column?,” Central Asia–
Caucasus Institute Analyst, February 8, 2006, http://cacianalyst.org/publica tions/analytical-
articles/item/10620-analytical-articles-caci-analyst-2006-2-8-art-10620.html.
44. See, for example, Grigoriy Mikhailov, “Kirgiziya stanovitsya kitaiskoi,” Nezavisi-maya gazeta,
July 22, 2013, http://www.ng.ru/cis/2013-07-22/1_kirgizia.html.
45. According to Kazakhstan’s 2009 census, there were 224,713 Uighurs living in Kazakhstan in
2009. Kyrgyzstan’s 2009 census reported 48,543 Uighurs.
46. Bruce Pannier, “Kyrgyzstan: Anniversary of Aksy Tragedy Marked,” Radio Free Europe/Radio
Liberty, March 17, 2006, http://www.rferl.org/content/article/1066811.html.
47. China, too, is an interested client for surplus electric power. Sébastien Peyrouse, “Economic
Aspects of the Chinese–Central Asia Rapprochement,” Silk Road Study Paper (Washington, DC:
Central Asia–Caucasus Institute and Silk Road Studies Program, 2007),
http://www.silkroadstudies.org/new/docs/Silkroadpapers/2007/0709China-Central_Asia.pdf.
48. For details of these transactions and a list of China’s oil and gas holdings in Kazakhstan as well as
the makeup of all of Kazakhstan’s consortia, see Martha Brill Olcott, “KAZMUNAIGAZ:
Kazakhstan’s National Oil and Gas Company,” in The Changing Role of National Oil Companies in
International Energy Markets (Policy Report 35, James A. Baker III Institute for Public Policy,
Houston, TX, 2007).
49. In 2006 China invested more than $650 million in laying two electricity transmission lines,
reconstructing a highway, and digging two highway tunnels in Tajikistan. On January 15, 2007, it was
also announced that Sinohydro Corporation was awarded a contract to build a large hydroelectric plant
in Pendjikent district, northern Tajikistan, to be funded through a $200 million low-interest Chinese
loan. “China, Tajikistan Set to Strengthen Economic Cooperation,” New Eurasia, January 19, 2007,
http://www.neweurasia.net/business-and-economics/china-tajikistan-set-to-strengthen-economic-
cooperation.
50. Personal communication with the author.
51. For an account of the 2012 SCO summit, see http://www.scosummit2012.org.
 Chapter Twelve
The Korean Peninsula and Northeast Asian
Stability
SCOTT SNYDER

The Korean Peninsula is at the vortex of the respective political and security
interests of the great powers in Northeast Asia. The conflicting geo-strategic
interests of great powers toward the Korean Peninsula have inhibited the
institutionalization of regional structures to the extent that Northeast Asia has
been characterized as an “anti-region.”1 Although the end of the Cold War
has brought about dramatic changes in the structure of international relations
in other regions, Northeast Asia has been much slower to adapt to new
circumstances, primarily because the structure of conflict on the peninsula
between North and South Korea—at the center of Northeast Asia—remains
unresolved. The security interests of the region’s great powers are directly
affected by the nature and orientation of the Korean Peninsula, which has
remained divided since the end of World War II.
The process by which the issues of peace and reunification on the Korean
Peninsula are resolved will inevitably influence the security interests and
foreign policy options of Korea’s great power neighbors. The nature and
development of regional cooperation (which has been driven in part by the
ongoing North Korean nuclear crisis); the shift in economic and political
strength on the peninsula in favor of Seoul as one phase in an ongoing
transition to a new equilibrium on the Korean Peninsula; and concerns that a
resolution to the Korean standoff might inadvertently abet major power
rivalry are factors that are likely to influence the relative levels of regional
conflict and cooperation, and will shape prospects for development of
regional institutions in Northeast Asia.
This chapter will explore how the North Korean nuclear issue has been a
catalyst for ad hoc multilateralism in Northeast Asia, in the process
promoting the institutionalization of regional cooperation. Second, the
chapter will review how economic interdependence, resulting from
intensified economic interactions among Northeast Asian neighbors, has
coexisted and conflicted with the security priorities and threat perceptions
that each of the members of the Six-Party Talks faces, including the
implications that would arise in the event that inter-Korean tensions are
resolved through the establishment of peaceful coexistence and/or
reunification. Third, the chapter will analyze the prospects for regional rivalry
between China and Japan and how developments on the Korean Peninsula
might influence regional relations.

THE NORTH KOREAN NUCLEAR CRISIS: CATALYST

FOR COOPERATIVE SECURITY DIALOGUE

The ongoing North Korean nuclear crisis has been a catalyst for the building
of multilateral cooperation to promote security and stability in Northeast
Asia, but it has also exposed the limits of such cooperation in the face of
North Korea’s rejection since 2009 of a regional consensus in favor of the
peninsula’s denuclearization. Although the North Korean standoff has often
been cited as the primary obstacle to the promotion of regional security
cooperation in Northeast Asia, the North Korean nuclear crisis has also long
been the primary catalyst for promoting multilateral cooperation among
neighboring stakeholders surrounding the Korean Peninsula. Despite repeated
attempts since the late 1980s to formalize a regional security dialogue
mechanism for the purpose of addressing security issues in Northeast Asia,
the second North Korean nuclear crisis has both provided the basis for
establishing an institutionalized regional dialogue through the establishment
of the Six-Party Talks and illustrated the limitations of that dialogue to bring
a solution to the Korean crisis.
Efforts to promote regional cooperation in Northeast Asia predate the
emergence of the North Korean nuclear crisis, but the challenge of alleviating
tensions on the Korean Peninsula has been at the center of all of these efforts.
Mikhail Gorbachev proposed expanded regional cooperation on the model of
the Council for Security Cooperation in Europe at a Vladivostok speech in
1986.2 Former Korean president Roh Tae Woo also put forward a proposal
for a Six-Party Consultative Conference for Peace in Northeast Asia in a
speech to the United Nations in 1988.3 Former US secretary of state James
Baker advocated the establishment of a two-plus-four mechanism for dealing
with Korean tensions in November 1991.4 None of these proposals gained
traction as viable mechanisms for multilateral management of Northeast
Asia’s security problems.
With the emergence of the first North Korean nuclear crisis and
Democratic People’s Republic of Korea’s (DPRK) threats to withdraw from
the Nuclear Non-Proliferation Treaty (NPT), the International Atomic Energy
Agency (IAEA) referred the matter to the United Nations in 1993, and the
UN Security Council called for dialogue among interested parties. Under the
Clinton administration, the United States responded to the call and initiated a
bilateral dialogue with the DPRK, much to the shock and chagrin of the Kim
Young Sam administration in Seoul. That dialogue eventually resulted in the
Geneva Agreed Framework, but that agreement could not be implemented by
the United States alone without support from its allies. The Agreed
Framework called for the establishment of a multilateral consortium named
the Korean Peninsula Energy Development Organization (KEDO) to
implement the terms of the deal. South Korean and Japanese leaders
understandably complained about “taxation without representation,” since the
United States signed the agreement but asked its allies to sign the check to
pay for its implementation. The fact that the bilaterally negotiated Geneva
Agreed Framework required a multilateral structure to pursue its own
implementation provided clear evidence that a US-led bilateral approach to
solving North Korea–related issues, while necessary, was by itself
insufficient.
KEDO represented a practical step forward in forging multilateral
cooperation to meet North Korea’s energy security needs as a solution to the
North Korean nuclear crisis, but as an exercise in building regional
cooperation, the core membership was incomplete. The European Union
joined South Korea and Japan on the board, but Russia and China remained
aloof from the organization for their own reasons.5 Another step forward in
developing multilateral cooperation to solve Northeast Asian regional issues
was the establishment of the Four-Party Talks (two Koreas, United States,
and China), despite North Korea’s initial reluctance to join. But this dialogue
never really got off the ground due to North Korea’s own struggle for
survival during the famine. The Four-Party Talks did more to promote
Chinese cooperation with the United States and South Korea than to address
problems involving North Korea.
A third form of multilateral cooperation during this period involved the
establishment of the Trilateral Coordination and Oversight Group (TCOG)
among the United States, South Korea, and Japan. This group did much to
overcome differences among allies in support of the Perry process in the late
1990s, as all parties supported cooperative efforts to engage North Korea in
more active cooperation on the basis of Kim Dae Jung’s sunshine policy.
Suspicions about covert North Korean nuclear efforts at Keumchangri (later
proved unfounded) and North Korea’s Taepodong launch in 1998 catalyzed
the creation of TCOG to address differences in policy priorities among the
three countries.6
The advent of the second North Korean nuclear crisis catalyzed a new
form of regional cooperation in the form of the establishment of the Six-Party
Talks. Early in the crisis, it became apparent that the United States had no
option for unilateral action through military means, and one lesson of the
Agreed Framework was arguably that a US-DPRK bilateral approach by
itself was also likely to fail. So President Bush cast the second crisis as a
“regional issue,” and eventually the Six-Party Talks were established, with
China taking the lead role as host and mediator for the process.7 This time, all
the regional stakeholders were represented in the forum, but the dialogue
itself made little initial progress due to a combination of US reluctance to
engage with North Korea and North Korea’s continued focus on the United
States.
By early 2005, following three rounds of sporadic negotiations, many
critics thought the Six-Party Talks were dead, while others asked whether the
parties themselves would ever be able to agree on the conditions under which
it was possible to say that all diplomatic options had been exhausted. In May
2005, Secretary of State Condoleezza Rice stopped describing the DPRK as
an “outpost of tyranny” and acknowledged that the DPRK is a sovereign
state. Within weeks, newly appointed assistant secretary of state Christopher
Hill met bilaterally in Beijing with his counterpart, DPRK vice minister Kim
Kye Gwan, to announce the resumption of Six-Party Talks after a delay of
over one year, signaling a US willingness to negotiate with the DPRK
bilaterally in the context of the Six-Party process. Following intensive
negotiations over the course of two sessions in July–August and September
2005, all parties agreed to a September 19 Joint Statement of Principles for
addressing the North Korean nuclear crisis.
The statement itself was vague and underwhelming. The document
contained few concrete measures, only pledges that the various sides would
move forward on the basis of “words for words” and “actions for actions.”
But the joint statement was the first time that the regional stakeholders had
identified and articulated the minimum common rhetorical objectives that
through joint action and implementation might in the future bind the parties
together as a “security community.” The common objectives identified were
(1) the denuclearization of the Korean Peninsula, (2) normalization of
relations among all the regional stakeholders, (3) economic development
(focused on North Korea), and (4) peace on the Korean Peninsula and in
Northeast Asia. The shared objectives that might constitute a Northeast Asian
“security community” had been identified, but it was not yet clear that the
parties were willing to take actions in pursuit of those objectives. The joint
statement marked the inauguration of a rhetorical commitment to collective
action in the service of these four objectives, but circumstances related to the
Banco Delta Asia (BDA) issue prevented this rhetoric from being translated
into action.8
A protracted stalemate developed in late 2005 over DPRK accounts frozen
at the Macao-based BDA in response to US Treasury Department concerns
that the bank had facilitated North Korean money laundering. The situation
was made worse by North Korean missile and nuclear tests in July and
October 2006. But following the swift passage of two UN resolutions
condemning the North Korean actions and imposing sanctions on the North,
the Six-Party Talks resumed in December 2006. North Korea’s actions had
catalyzed a unified regional response that had the effect of isolating North
Korea diplomatically, but the resumption of Six-Party Talks provided an
avenue for the North to back down in a face-saving manner. Based on the
principles agreed to in the September 2005 joint statement, the six parties
negotiated a series of implementing measures through five working groups
that focused on denuclearization, economic assistance, improvement of
bilateral relations between the DPRK and Japan and the United States
respectively, and the establishment of a Northeast Asia Peace and Security
Mechanism (NEAPSM). The working group on Northeast Asian peace and
security was envisioned as one that would outlast the others as progress was
made in resolving the North Korean nuclear crisis; eventually it would
become a regular regional mechanism for the discussion of regional security.
 But implementation of North Korea’s denuclearization broke down at the
end of the Bush administration in 2008 as a result of disagreement with North
Korea over the sequencing of implementation measures, including
verification, which had been agreed to in Six-Party Talks in February 2007.
These disagreements emerged in the context of rumors that Kim Jong Il had
suffered a stroke in August 2008, raising questions about the stability of
North Korea’s political leadership. Amid concern about North Korea’s
political stability, North Korea stepped away from the Six-Party “action for
action” tradeoff that had been the centerpiece of the September 2005 joint
statement, announcing in the days prior to President Obama’s inauguration in
January 2009 that the United States should normalize relations with North
Korea before it would be willing to pursue denuclearization.9 Following this
statement, North Korea’s launch of a satellite using ballistic missile
technology in April 2009 drew UN condemnation, to which North Korea
responded with its second nuclear test in May 2009. In response, UN Security
Council Resolution 1874 urged member states to monitor and inspect
shipments to and from North Korea that might involve transfer of nuclear or
missile-related items and to establish a UN panel of experts to receive reports
from member states on instances of such behavior.10

ECONOMIC INTERDEPENDENCE VS. SECURITY

CHALLENGES IN NORTHEAST ASIA

Despite a regional security environment that remains paralyzed by North

Korea’s continued isolation and nuclear development, increasing economic
interdependence, in large part resulting from China’s rapid and sustained
economic development, has intensified economic cooperation among all the
countries. Rising economic prospects in Northeast Asia have even catalyzed
marketization, stimulated by cross-border economic flows at the grassroots
level inside North Korea. The juxtaposition of intensified economic
interdependence with a seemingly paralyzed security environment
surrounding North Korea has fed a seeming contradiction between hot
economics and cold politics: development of cross-border supply chains has
engendered close economic cooperation within the region while security
concerns as well as long-standing territorial and security disputes have
inhibited states from pursuing more bold forms of political cooperation or
collective action to deal with the North Korean nuclear issue.
A factor that further contributes to uncertainty regarding the region’s
future is that the relative balance that existed between the two Koreas on the
peninsula during the most intense period of inter-Korean competition to
establish respective claims to international legitimacy during the Cold War
has now been replaced by a situation in which South Korea is dominant on
the peninsula in almost every aspect, while North Korea’s economic and
political isolation and its pursuit of nuclear weapons to ensure its own
security have increasingly resulted in its marginalization and isolation. North
Korea’s nuclear weapons program has represented a last-gasp effort to
compensate for the growing gap between its own power and that of South
Korea.
Future political arrangements on the Korean Peninsula and the shape of
any future Korean reunification are much more likely to be determined in
Seoul than in Pyongyang. Concerned states must consider both how their
security environment will be affected by the mitigation or resolution of the
North Korean nuclear issue and by the resulting security environment that
would exist in the context of peace and/or reunification on the Korean
Peninsula. Following the achievement of peace on the Korean Peninsula,
some leaders may worry that their states will face a more challenging security
situation in the context of a reunified Korea than currently exists. This
situation exists precisely because the orientation of the Korean Peninsula
remains a critical security interest of major powers, especially China and
Japan, which have historically viewed a friendly Korean Peninsula as a
critical factor affecting their own security.
At the same time, the Korean standoff has not completely prevented
economic integration and interdependence in Northeast Asia as China’s
economic development has resulted in strengthened cross-border trade,
investment, and tourism ties and as China has become integrated in
production supply chains and growing trade ties with all of its neighbors,
including most notably South Korea and Japan. The phenomenon of growing
economic dependency on China as an engine for global growth at the same
time that both South Korea and Japan continue to depend on alliances with
the United States as a primary instrument for preserving regional stability
makes for a complicated situation, particularly as states in the region
contemplate the possibility that China may eventually supersede the United
States as the most powerful state in East Asia.
North Korea
Among the six parties, North Korea faces the most acute security dilemma,
and its economic integration in the region remains relatively limited. As a
result, the North Korean leadership faces a fundamental contradiction as part
of its efforts to simultaneously safeguard regime survival and improve its
economy. The North’s totalitarian political system and command economy
have thrived on isolation and near-absolute control of its citizenry, yet its
only viable economic development options are likely to involve greater
economic integration and an accompanying relative loss of political control.
The absence of a permanent peace on the Korean Peninsula has meant that
the regime operates on a perpetual semi-war footing, a situation that
indirectly benefits the leadership’s efforts to maintain strong internal political
controls over its population. Unable to compete in maintaining a credible
conventional military deterrent against South Korea and the United States as
a result of its failing economy, North Korean leaders have sought to achieve
regime survival and deter any possible attack from its enemies by pursuing a
nuclear development program.
Although a North Korean nuclear weapons capacity might cause potential
aggressors to think twice about attacking the North, North Korea’s efforts
have arguably enhanced its financial and political isolation. The UN Security
Council has implemented increasingly strong resolutions and statements of
condemnation in 2006, 2009, and 2013 following successive rounds of North
Korean long-range rocket launches and nuclear tests, in an effort to prevent
the North from continuing its nuclear and missile development.
The regime’s failure to come to terms with the incompatibility of its
nuclear program with its economic development aspirations is reflected in a
Central Party Committee plenum decision on March 31, 2013, to
simultaneously pursue economic and nuclear development, despite the fact
that the nuclear issue remains a fundamental stumbling block that prevents
North Korea from gaining expanded external economic assistance.11
The best diplomatic option for addressing North Korean security concerns
in return for denuclearization lies with the September 19, 2005, Six-Party
Joint Statement, which links North Korea’s denuclearization pledge to the
prospect of normalized relations with both the United States and Japan, a
process that would address North Korea’s security dilemma by alleviating
concerns about America’s “hostile policy.”
Efforts to implement a denuclearization for normalization quid pro quo
made some initial progress in 2007 and 2008 as North Korea shut down and
disabled its Yongbyon facilities in tandem with American steps to remove
North Korea from the terrorist list and Trading with the Enemy Act.12 But the
Six-Party process broke down in early 2009 as North Korea shifted its
position to one that called upon the United States to abandon its “hostile
policy” toward North Korea as a prerequisite for denuclearization,
abandoning the “action for action” approach pursued as part of the Six-Party
Talks. Two successive rounds of North Korean multistage ballistic rocket
launches and missile tests in 2009 and 2012–13 made the resumption of Six-
Party negotiations even more difficult, as the United States insisted that
North Korea give up further long-range missile and nuclear tests and back
denuclearization pledges with actions to demonstrate its willingness to return
to the status quo ante that had existed in late 2008 before resuming Six-Party
negotiations. A framework for such an effort was provided by separate
statements from the United States and DPRK on February 29, 2012, but this
effort fell apart sixteen days later following North Korea’s announcement that
it would conduct another long-range satellite launch within weeks of this
understanding.13 Without North Korean adherence to these preconditions, an
unconditional return to talks would imply recognition of North Korea as a
nuclear weapons state.
Participating countries in the Six-Party process remain united over the
necessity of the denuclearization of the Korean Peninsula, but China and to a
lesser extent Russia differ on the desirability of utilizing sanctions as an
instrument to pressure North Korea into making a strategic choice for
denuclearization. Instead, China has long preferred that North Korea
gradually take up economic reforms and integration into the regional
economy. Despite passage of UN Security Council resolutions in 2009
authorizing sanctions against suspected nuclear and missile shipments to
North Korea, China’s bilateral trade with North Korea more than doubled
from 2009 to 2012, from around $2.68 billion to around $6 billion.14 At the
same time, South Korean trade with China stagnated in the wake of
comprehensive sanctions that effectively halted all bilateral trade except trade
related to the operation of the South Korean–built Kaesong Industrial
Complex that operates just north of the DMZ inside North Korea. North
Korea’s increasing economic interdependence with China is an economic
lifeline that contributes to North Korean stability, but while North Korea’s
economic dependency on China is increasing, growing Sino-DPRK bilateral
trade also provides a safety valve against economic pressures imposed by
international sanctions and mitigates efforts to pressure North Korea into
making a strategic choice.
Even if North Korea were to reverse its current course and return to the
denuclearization path through the Six-Party Talks, North Korea’s leadership
may still feel an acute sense of threat if relaxation of tensions over the nuclear
issue were to enable an influx of South Korean thinking and cultural norms
into North Korea. Such influences might pose a direct threat to central
precepts underlying the North Korean system. Thus, the alleviation of North
Korea’s security dilemma with the United States will only reveal the more
profound dilemma that Pyongyang’s leaders face in explaining to its people
the success of South Korea. A second challenge is that North Korea’s
conception of regime survival guarantees may extend well beyond political
measures to include levels of economic assistance that would both provide
assurances of regime survival and eliminate motivations for internal
economic reforms that are a prerequisite for the North’s economic integration
with its neighbors. A third complicating factor is that North Korea’s political
system has failed to meet minimum international governance standards
necessary to assure the livelihood of its own people, posing serious political
obstacles to the acceptance of any agreement with the DPRK.
The prospect of a reunified Korea offers little appeal to North Korea’s
leadership, which would be highly likely to lose political power in such a
scenario, given the North’s structural and material weakness. Given the
relative strength of South Korea, any scenario would likely be shaped by
preferences determined in Seoul. Even in a negotiated arrangement to
promote inter-Korean reconciliation arrangements, North Korea’s leadership
must rely more on South Korean fears of the costs associated with the sudden
collapse of the North Korean state and the residual damage that North Korea
could do to South Korea’s economy than on any instrument of power in inter-
Korean negotiations. In the absence of any leverage of its own, North Korea
continues to rely on the traditional game of playing larger powers against
each other in an attempt to avoid excessive dependence on any single
neighbor.
The year 2012 was heralded as a year in which leadership transitions were
anticipated to occur in every country in Northeast Asia with the possible
exception of North Korea. But Kim Jong Il’s death on December 18, 2011,
assured that by the time he turned thirty years old, Kim Jong Un would be
more “senior” in longevity than any of his Northeast Asian counterparts.
These near-simultaneous leadership transitions in the region fueled
speculation that new leaderships might shake up policies and result in new
initiatives; instead the influence of new leaderships has gradually evolved,
highlighting an essential conservatism and desire for continuity rather than
bold brush-strokes of change.
As Kim Jong Un has consolidated his political power inside North Korea,
some analysts hoped that his youth and international experience might lead to
bold economic reforms, but his early pursuit of economic improvements has
occurred only on the foundations of an old system in which conservative
military and party structures maintain considerable political control over the
population. North Korea’s affirmation of its nuclear status in the preamble of
its constitution and the March 31, 2013, Central Party Plenum decision to
simultaneously embrace political and economic reforms suggests that North
Korea sees no viable way to pursue economic reforms without risking loss of
political control. An additional cause for concern about North Korea’s
leadership direction under Kim Jong Un derives from his seeming propensity
to take greater risks as he turned up the threats and was able to take credit for
technical achievements in pushing forward North Korea’s missile and nuclear
programs.

The People’s Republic of China

China has historically sought to ensure that any Korean state bordering China
is friendly to the PRC. For centuries, the means by which such a relationship
was achieved was to ensure that the Korean Peninsula was semi-dependent
on China in managing its foreign affairs and that Korea remained firmly in
China’s cultural sphere as a tributary of China. China’s security dilemma,
then, is how to ensure that any future single Korean state remains friendly to
—if not dependent on—China. China’s overarching desire for regional
stability has led the PRC to pursue policies designed to promote North
Korea’s survival and reform. At the same time, economic interdependence
between China and South Korea has grown rapidly over the past two decades,
providing both countries with a new rationale for forging closer bilateral
political/ security cooperation.15 China’s primary diplomatic challenge in
dealing with the North Korean nuclear issue has been the question of how to
balance its interest in regional stability and the traditional view of North
Korea as a “strategic buffer” against pressures from the United States to more
actively play the role of a “responsible stakeholder” in the international
community by taking harsh action to punish North Korea’s nuclear
development. China does not benefit from a nuclear North Korea to the
extent that such a state triggers regional tensions and is destabilizing. While
regional stability is the sine qua non of Chinese policy toward North Korea,
each successive nuclear test conducted by Pyongyang threatens regional
security, negatively affects China’s national security interests, and places
greater pressure on China to align more closely with other parties to insist on
the denuclearization of the Korean Peninsula.
The Six-Party framework has enabled China to play an active role in
regional diplomacy, while also illustrating the limits of China’s capacity to
shape the security environment on its periphery. China for the first time
played a mediating role as host and convener of the Six-Party Talks. But the
lack of progress in the talks has also revealed the limited tools at China’s
disposal to influence the United States and North Korea, respectively, to take
more conciliatory positions. However, China’s central role in the Six-Party
consultations regarding North Korea also guarantees that any outcome from
the Six-Party process must conform with China’s strategic interests. China
would like to see the Six-Party Talks develop into an institutionalized
regional security mechanism, as foreshadowed in the establishment of the
Northeast Asia Peace and Security working group under the Six-Party Talks.
But Chinese researchers still seem to have difficulty reconciling the existence
of American alliances with the establishment of a regional security dialogue,
characterizing continued adherence to the alliances as “cold-war thinking”
while simultaneously acknowledging their past contributions to regional
security.16
While China continues to expand its economic influence with North
Korea, the PRC has recognized that the most important strategic decisions on
the Korean Peninsula will likely be made in Seoul rather than Pyongyang and
has attempted to strengthen the Sino-ROK (Republic of Korea) relationship
accordingly. The rapid growth of Sino-ROK economic ties has supported the
improvement of the political relationship. China and South Korea have
dramatically increased their economic interdependence in over two decades
since China and South Korea normalized relations in 1992. Sino–South
Korean trade has grown from over $6.4 billion in 1992 to almost $215 billion
in 2012, while South Korea has been one of the leading sources of foreign
investment in China.17 The growth in trade and investment ties has been
mirrored by intensified people-to-people relations. There has been an
exponential increase in two-way exchange of tourists and students from the
mid-2000s, promoting familiarity and facility in cross-border interactions and
cultural exchange. Over 4 million South Koreans (about 8 percent of South
Korea’s total population) visited China in 2012, making it the largest single-
country source of tourist arrivals to China, while over 2.2 million Chinese
visited South Korea in 2012, overtaking Japan as South Korea’s number-one
source of tourist arrivals for the first time.18
But the intensification of Sino–South Korean trade ties, which are over
thirty times greater than China’s trade with North Korea, did not appear to
translate into weakening of Chinese political support for North Korea in the
wake of the sinking of a South Korean naval vessel and shelling of a South
Korean island in 2010.

Japan
Japan’s security challenges vis-à-vis the Korean Peninsula come in several
forms. First, there are the specific challenges Japan faces in its relations with
North Korea, especially as Japan attempts to address long-standing issues
surrounding the abduction of Japanese nationals from Japan by North Korean
agents in the 1970s and 1980s and as Pyongyang develops a direct-strike
capability toward Japan. Second, the inability of Japan and South Korea to
overcome deep differences over historical and territorial issues is a
background factor that inhibits cooperation between two US allies on security
issues related to North Korea. Third, in the long term, whether or not the two
Koreas remain divided or unify and how that process occurs is one among
several issues on which Japanese and Chinese security interests may come
into conflict.
Japan faces two main policy challenges in its relationship with North
Korea. The first is related to the importance of the abduction issue as a
dominant point in Japan’s policy toward North Korea. Japanese politicians
and the Japanese public continue to focus on the abduction issue as a top
priority in management of relations with North Korea. But the abduction
issue has also occasionally caused Japan to be out of sync with the United
States and South Korea to the extent that Japan takes actions that prioritize
progress on abductions over denuclearization. This circumstance occurred
during the course of Six-Party Talks in 2006 and 2007, when the abduction
issue seemed to distract from a focus on denuclearization, but the issue has
also been a catalyst for Japan to renew direct contacts with North Korea
without first coordinating with the United States and South Korea when
Prime Minister Abe sent a special envoy to Pyongyang in the summer of
2013.
A second dimension of Japan’s security dilemma vis-à-vis the Korean
Peninsula is related to Japanese anxieties over whether or not the United
States can be depended on to defend Japan from aggression by North Korea.
These anxieties are likely to grow as North Korea continues to expand its
nuclear and missile delivery capabilities through additional testing. North
Korea’s 1998, 2006, 2009, and 2012 long-range missile tests have all
reminded the Japanese public that North Korean missile delivery systems
pose a critical threat to Japan’s security. As North Korea attains new
capabilities that allow it to strike Japan but not yet the United States,
Japanese observers worry about decoupling, or the possibility that the United
States would not be willing to defend Japanese assets if escalation would risk
North Korean nuclear retaliation directly against the United States. North
Korea’s third nuclear test has also stimulated more active thinking among
Japanese security planners regarding whether Japan needs to attain an
offensive strike capability against North Korea.19
Japan’s security concerns in response to North Korea’s growing threat
have an impact on Japan’s relationship with North Korea and its relationship
with the United States and is a background factor influencing Japan-ROK
relations. But tensions over historical and territorial issues under the
respective conservative administrations of South Korean president Park
Geun-hye and Prime Minister Shinzo Abe appear to be deepening, placing
political constraints on the ability of the two countries to work together
absent direct involvement by the United States. Although Japan and South
Korea have a mature and vibrant economic relationship, South Korean
concerns over a rightward turn in Japanese politics have grown, while
Japanese increasingly wonder whether South Korean expectations for Japan
on history and territorial issues can be satisfied without Japan’s full
capitulation.
Japan’s long-term security concerns that Korean reunification might alter
the status quo on the Korean Peninsula in ways that might be unfavorable to
Japan play into a Sino-Japanese political relationship that has become
increasingly difficult to manage and that has begun to have negative spillover
effects on the bilateral economic relationship between the two countries. To
the extent that a unified Korean Peninsula tilts toward China and away from
Japan, such an orientation will fuel long-standing Japanese security concerns.
The zero-sum nature of respective Japanese and Chinese security concerns
regarding the orientation of the Korean Peninsula mirrors other tensions in
the relationship that have emerged in part in connection with the fact that
China is surpassing Japan as the strongest state actor in East Asia.

Russia
Russia’s historical involvement in Korean Peninsula affairs persists, even if
its immediate capacity to influence the security situation on the peninsula is
low. The opportunity to participate in the Six-Party Talks reaffirmed Russia’s
relevance and role in Northeast Asian affairs despite its current relative lack
of regional influence. Russia supports the denuclearization of the Korean
Peninsula and welcomes progress toward inter-Korean reconciliation and
possible unification, but it has relatively few diplomatic or other resources
available to contribute to the process. As a result, Russia’s influence on the
Six-Party process has been marginal.
However, Russia has persisted in pursuing energy security and
transportation cooperation with the two Koreas in hopes of promoting forms
of economic cooperation that would assist in North Korea’s economic
integration consistent with Russian long-term interests. Russia completed
construction of a railway connection from the DPRK-Russia border to Rajin
Port in 2013 and continues to engage periodically in talks with South and
North Korean counterparts regarding construction of gas pipelines from
Russia to South Korea through North Korea.
Nonetheless, Russia maintains a long-term geo-strategic interest in Korean
stability. In the long term, Russian security dilemmas related to the Korean
Peninsula would only arise in the event that a single great power was to play
a dominant role on the peninsula. Russia would welcome a unified Korea that
is friendly or neutral and would oppose the continuation of a US military
presence in a unified Korea. But Korean reunification is unlikely to have a
direct effect on Russia’s vital security interests.20
The United States
The US security dilemma with respect to the situation on the Korean
Peninsula revolves around two primary issues. The first is the security
ramifications of North Korea’s nuclear and missile programs for the global
proliferation regime, and as a threat to vital American security interests.
American proliferation concerns are twofold. First, the United States wants to
prevent transfer of fissile material to non-state actors or others who might
attempt to deliver a nuclear or radiological device to the US mainland. The
second concern is the ramifications of North Korean proliferation for the
global non-proliferation regime. In both cases, the Bush and Obama
administrations have shown strong continuity in maintaining as a top priority
the rollback of North Korea’s nuclear program, since the costs of acceptance
of the program would simply be too high to contemplate. Yet the longer
North Korea holds on to a de facto nuclear weapons capability, the more
North Korea’s neighbors worry that the United States will focus on
prevention of nuclear proliferation rather than denuclearization. To the extent
that non-proliferation is elevated as a priority above regional security
concerns, it is possible that success in achieving American non-proliferation
objectives may be accompanied by setbacks to American regional security
interests.21
A secondary security dilemma that is sometimes raised for the United
States is whether peace and reunification on the Korean Peninsula would
threaten the US presence on the Korean Peninsula or result in a strategic
competition between the United States and China. Related to this theme is the
idea that the United States needs a conflict with North Korea as a pretext for
maintaining a troop presence on the Korean Peninsula. However, such
reasoning fails to consider that the overall trends in American global defense
policy have been moving in the opposite direction since 9/11. The nature of
the global threat environment requires the United States to seek strategic
flexibility to respond to multiple potential threats and attempts to utilize
advances in technology and C4I capabilities to its advantage to respond to
such threats, even as fiscal resource constraints emerge as a possible long-
term obstacle to American military preeminence. One result is that while the
importance of bases focused on responding to a single fixed threat has
declined, the United States has diversified access arrangements within Asia
and maintains a rotational presence as evidence of long-standing commitment
to the region’s security. Moreover, as an aggressive North Korea rejects
denuclearization negotiations and develops a nuclear and missile delivery
capacity that could directly threaten the United States, more and more
analysts believe that reunification may be the best means by which to achieve
North Korea’s denuclearization.
The United States has clearly identified North Korea as a top priority for
cooperation with China. China also has a stake in cooperation on North
Korea as part of efforts to force a “new type of relationship between major
countries.” But these efforts are occurring against the backdrop of the US
rebalancing policy toward the Asia-Pacific region that originally was
intended to bolster confidence within Asia regarding US staying power in the
face of a more assertive Chinese policy toward the region.22 But this US
initiative has also ostensibly raised China’s suspicions regarding American
long-term strategic intentions. Despite clear incentives to work together,
renewed Chinese and US government efforts to promote cooperation on
specific problems are occurring in a context of mutual strategic mistrust. The
ability of China and the United States to cooperate in response to North
Korea’s nuclear development could serve as a litmus test for whether such
cooperation can be extended to other security issues.
There is a widening scope for US-China cooperation on North Korea’s
denuclearization, but it occurs against a backdrop of strategic mistrust.23
China remains more sensitive than the United States to the ramifications of
instability on the Korean Peninsula for its core national security interests. The
task for the United States is to convince China that a nuclear North Korea is
inherently destabilizing and that there is no choice between regional stability
and the acceptance of a nuclear North Korea. One way the United States has
underscored to China the negative consequences of North Korea’s
destabilizing actions has been to strengthen alliance-based security
cooperation in response to North Korean destabilizing actions. But China
worries that US allies are using the North Korean threat as a proxy for
preparations to contain China, even as China is motivated to redouble efforts
to restrain North Korea from undertaking further tests.

South Korea
The Republic of Korea is a leading member of the G-20 body that attempts to
promote global financial stability, while North Korea ranks near the bottom
in the world in almost every development category. The tasks of
reconciliation and possible reunification will impose significant burdens on
South Korea as it attempts to close the socioeconomic gap between the two
Koreas. In addition, future strategic orientation, economic capacity, and
resources for protecting a reunified Korean Peninsula within East Asia
remain question marks in the broader context of developments in regional
relations.
South Korea’s primary security dilemma lies in its simultaneous desire to
pursue peace and reconciliation in inter-Korean relations and the need to see
North Korea denuclearize. This means that South Korea must find a way to
link progress in inter-Korean reconciliation with improvements in the broader
regional security environment in ways that lead to support for Seoul’s
position among all of South Korea’s great power neighbors. South Korean
leaders must build the capacities to manage the simultaneous tasks of
promoting Korean reunification and peninsular stability while keeping in
mind regional security concerns and simultaneously providing reassurance to
its neighbors in Japan and China.
South Korean foreign policy strategists have grappled with a second
foreign policy dilemma in recent years as China’s rise has resulted in
intensified economic interdependence between South Korea and China while
it continues to gain security benefits from the United States. The emergence
of this dilemma is a consequence of the rapid growth in Sino–South Korean
economic relations over the first two decades since the two countries
normalized diplomatic relations in 1992. As a result, South Korean economic
dependency on China as a source of economic growth has become a
diplomatic concern as South Korean foreign policy strategists fret over being
placed into a position where South Korea has to make a potentially costly
choice between economic ties with China and security ties with the United
States. Sino–South Korean trade represented over 20 percent of South
Korea’s overall trade at $215 billion in 2012, while South Korea’s trade with
the United States and Japan combined added up to $205 billion.
As South Koreans think about the future of the Korean Peninsula and
prospects for Korean reunification, it is clear that South Korea will need
cooperation from China to achieve that objective. At the same time, South
Koreans worry that China’s political and economic power could potentially
be used to restrain South Korea’s strategic choices and that such pressures at
some point could target their security alliance with the United States. In fact,
the USROK alliance—along with Chinese reticence to completely abandon
North Korea—has already served as an obstacle to the development of a
more comprehensive political partnership with China.
A third security dilemma that is often obscured by the South Korean focus
on Sino-US relations is how to manage the effects of rivalry between China
and Japan, especially as they compete for future influence on the Korean
Peninsula. Despite the fact that Korean unification could become a catalyst
for heightened Sino-Japanese rivalry, the task of how to achieve reunification
on the peninsula absorbs so much time and energy that there is little left for
considering how to manage the possibility of renewed Sino-Japanese rivalry.
Yet South Korea will likely suffer negative effects from rising Sino-Japanese
tensions even if it is not directly involved, and such tensions could make the
Korean Peninsula once again an object of geo-strategic competition for
influence.
Aside from the security challenges posed by North Korea, South Korea’s
new president, Park Geun-hye, came into office focusing on two additional
threats to regional stability: the prospect of an Asian arms race and the failure
of Japan to sufficiently recognize and atone for its historical wrongs. Her
Northeast Asia Peace and Cooperation Initiative (NEAPCI)—also referred to
as the Seoul Process—attempts to promote a gradual process of developing
more institutionalized functional integration and regional cooperation on
many common issues in Northeast Asia. But Park’s vision neglected to
identify Sino-Japanese tensions as a source of instability in the region, and
her vision for peace and cooperation in Northeast Asia will ultimately depend
on good relations with both Japan and China and a stable Sino-Japanese
relationship.
An ongoing diplomatic challenge for South Korea is how to link progress
in inter-Korean reconciliation with improvements in the regional security
environment so as to avoid inadvertent incitement of regional rivalries. Two
primary instruments draw attention among Korean analysts as a vehicle for
managing such a process. First, the Park administration’s Seoul Process
intends to promote functional cooperation to address challenges to regional
stability. Second, Park must grapple with the question of how US-ROK
alliance cooperation will mesh with the formation of a security regime in
Northeast Asia. One early clue to Park’s thinking on this matter came in the
press conference following her first summit meeting with Barack Obama,
during which she suggested that the United States and South Korea might
play the role of “co-architects” in developing regional security cooperation
and suggested that there could be synergy between the US rebalancing policy
and her own initiative for Northeast Asian peace and cooperation.

BEYOND THE KOREAN CONFLICT: RISING GREAT-

POWER RIVALRY?

The steady progress toward establishment of a regional cooperative dialogue

on how to deal with the shared problem of North Korea’s nuclear
development hit a significant roadblock when North Korea reneged on its
commitment in the September 19, 2005, Six-Party Joint Statement to work
toward the objective of abandoning its nuclear weapons. One indicator of the
magnitude of this roadblock is that since North Korea abandoned the
framework in 2009, it has been impossible to reconvene the talks.
Meanwhile, North Korea continues to make slow but steady progress toward
expanding the scope of its WMD threat.
In the meantime, a second challenge to prospects for multilateral
cooperation on security issues in Northeast Asia lies with the prospect that
competition among major powers in the region will increase political tensions
and put at risk the stability that has enabled rapid integration and encouraged
economic interdependence. As political and security tensions among major
powers develop, they could potentially put at risk economic cooperation,
prevent political cooperation to deal with shared challenges such as North
Korea’s nuclear development, or, worse, drag the region into a period of
renewed rivalry and conflict. While these developments underscore the need
for a collective institutionalized body capable of restraining rising tensions
from getting out of hand, they also are a clear factor that explains why the
establishment of such a forum has been so difficult to achieve. Ironically, the
prospect of a sudden change in the current standoff on the Korean Peninsula
may ultimately provide an opening for such cooperation to be established,
even despite the fact that such developments in the short run could feed into
preexisting major power rivalries in an effort to influence the diplomatic
orientation of a new leadership in a reunified Korea.
At the same time, all parties on the peninsula are grappling with
challenges posed by China’s rising influence, especially the seeming
contradiction between growing economic interdependence on the one hand
and rising political tensions on the other. The tension arising from the
coexistence of economic cooperation and diplomatic tension may prove to be
an enduring characteristic of the region’s economic and political future,
making the task of managing economic cooperation against a backdrop of
political tension particularly challenging.

CONCLUSION

The North Korean nuclear crisis has ironically proved to be a very effective
catalyst for the development of regional security cooperation, culminating in
the formal establishment of the Six-Party Talks as a regional framework for
addressing the challenge posed by North Korea’s nuclear development. But
each country continues to face strategic dilemmas that inhibit their
willingness to join security cooperation at the levels necessary to fully
counter North Korea’s drive to become a nuclear power. North Korea’s
decision to abandon denuclearization pledges made in the Six-Party Talks
rather than fulfilling its promises to abandon nuclear weapons has paralyzed
the negotiations even though countries continue to use a Six-Party framework
of consultations among envoys that had been previously charged with the
task of negotiating within the Six-Party process.
The Korean Peninsula remains a strategic security concern and object of
competition for influence in Northeast Asia. The division of the Korean
Peninsula into two separate spheres of influence, one dominated by China,
the other under American domination that serves as an effective surrogate for
ensuring Japan’s security interests, has been a very stable and probably
mutually satisfactory scenario in terms of managing China’s and Japan’s
mutual security concerns in the Cold War context. These concerns will only
be heightened in both Beijing and Tokyo if there is a change in the status quo
on the Korean Peninsula, which has persisted since the armistice brought a
halt to military conflict on the peninsula. Stability between China and Japan
as it relates to the Korean Peninsula has come at a very high price for
Koreans, who have continuously sought national reunification and restoration
of a unified Korean Peninsula as their highest national priority.
The de facto consolidation of power on the peninsula in the hands of
Seoul, combined with North Korea’s continued decline, poses internal
challenges in managing any possible Korean reunification and complicates
regional relations to the extent that the buffer provided by the previous rough
balance between North and South is no longer sustainable. Korean
reunification would likely heighten tensions and exacerbate the security
dilemma between China and Japan. Both parties might compete to preserve
influence on the Korean Peninsula as a means to enhance their own security.
There is a clear need for institutionalized regional security coordination
mechanisms to help manage regional rivalries among great powers. While
ongoing tensions make it difficult to envision the institutionalization of a
regional security structure that can be truly effective in dispelling renewed
rivalry or preventing conflicts, growing economic interdependence at least
gives parties a stake in cooperation, but it is unlikely to forestall tensions
completely. Managing these circumstances will pose a big challenge for the
region’s political leaders, who must choose between domestic political
pandering and international statesmanship as they navigate in increasingly
difficult terrain.

NOTES
1. Paul Evans, “Constructing Multilateralism in an Anti-Region: From Six-Party Talks to a Regional
Security Framework in Northeast Asia?” (paper presented at Stanford University Shorenstein Asia
Pacific Research Center conference on “Crosscurrents: Regionalism and Nationalism in Northeast
Asia,” May 2006).
2. Andrew Mack and Pauline Kerr, “The Evolving Security Discourse in the Asia-Pacific,”
Washington Quarterly 18, no. 1 (1995): 123–40.
3. Roh Tae Woo, “Korea: A Nation Transformed,” in Selected Speeches of President Roh Tae Woo
(Seoul: Presidential Secretariat, 1990).
4. James A. Baker III, “America in Asia: Emerging Architecture for a Pacific Community,” Foreign
Affairs 70, no. 5 (Winter 1991): 1; Don Oberdorfer, “Baker, Roh Criticize N. Korean A-Arms Effort;
Future of Divided Peninsula Discussed,” Washington Post, November 15, 1991, A36.
5. Scott Snyder, The Korean Peninsula Energy Development Organization: Implications for
Northeast Asian Regional Security Cooperation? (Vancouver: University of British Columbia Institute
for Asian Studies Working Paper Series, 2000).
6. Dennis C. Blair and John T. Hanley, “From Wheels to Webs: Reconstructing Asia Pacific
Security Arrangements,” Washington Quarterly 24, no. 1 (Winter 2001): 7.
7. “Press Conference with President George W. Bush,” Federal News Service, March 6, 2003.
8. The text of the Joint Statement of the Fourth Round of Six-Party Talks may be found at
http://www.state.gov/r/pa/prs/ps/2005/53490.htm (accessed May 22, 2007).
9. “DPRK Foreign Ministry’s Spokesman Dismisses U.S. Wrong Assertion,” Korea Central News
Agency, January 17, 2009.
10. United Nations Security Council S/RES/1874 (2009).
11. “Kim Jong Un’s Report and Remarks at KWP Central Committee Meeting 31 March 2013,”
http://nkleadershipwatch.wordpress.com/kim-jong-un/kim-jong-uns-re port-and-remarks-at-kwp-
central-committee-meeting-31-march-2013.
12. The text of the February 13, 2007, implementing agreement may be found at
http://www.state.gov/r/pa/prs/ps/2007/february/80479.htm (accessed September 16, 2007).
13. “DPRK Foreign Ministry Spokesman on Result of DPRK-U.S. Talks,” Korea Central News
Agency, February 29, 2012, http://www.kcna.co.jp/item/2012/201202/news29/20120229-37ee.html;
and Victoria Nuland, “U.S.-DPRK Bilateral Discussions,” February 29, 2012, accessed at
http://www.state.gov/r/pa/prs/ps/2012/02/184869.htm.
14. Dick K. Nanto and Mark E. Manyin, “China-North Korea Relations,” Congressional Research
Service, Washington, DC, December 28, 2010; Audrey Yoo, “Nearly 90 Percent of North Korea’s
Overseas Trade with China, Says Report,” South China Morning Post, September 4, 2013,
http://www.scmp.com/news/asia/article/1303171/nearly-90pc-north-koreas-overseas-trade-china-says-
report.
15. See David Shambaugh, “China and the Korean Peninsula: Playing for the Long Term,”
Washington Quarterly 26, no. 2 (Spring 2003): 43–56.
16. Jaeho Chung, Between Ally and Partner: Korea-China Relations and the United States (New
York: Columbia University Press, 2006).
17. Korea International Trade Association, http://www.kita.net.
18. Travel China Guide, http://www.travelchinaguide.com/tourism/2012statistics/inbound.htm;
Rajeshni Naidu-Ghelani, “China Ends Japan’s Dominance of Korean Tourism Market,” CNBC, August
13, 2013, http://www.cnbc.com/id/100958112.
19. Kiyoshi Takenaka, “Japan Defense Chief: Could Have Preemptive Strike Ability in Future,”
Reuters, February 15, 2013, http://www.reuters.com/article/2013/02/15/us-japan-defence-
idUSBRE91E0DK20130215.
20. Seung-ho Joo, “Russia and the North Korean Nuclear Crisis,” in North Korea’s Second Nuclear
Crisis and Northeast Asian Security, ed. Seung-ho Joo and Tae-hwan Kwak (Oxford: Ashgate, 2007),
133–50.
21. William J. Perry, “Proliferation on the Peninsula: Five North Korean Nuclear Crises,” Annals of
the American Academy of Political and Social Science 607, no. 1 (September 2006): 78–86.
22. “Press Briefing by National Security Advisor Tom Donilon,” Office of the White House Press
Secretary, June 8, 2013, http://www.whitehouse.gov/the-press-office/2013/06/08/press-briefing-
national-security-advisor-tom-donilon.
23. Kenneth Lieberthal and Wang Jisi, Addressing U.S.-China Strategic Distrust, John L. Thornton
China Center Monograph Series 4 (Washington, DC: Brookings Institution, March 2012),
http://www.brookings.edu/
∼/media/research/files/papers/2012/3/30%20us%20china%20lieberthal/0330_china_lieberthal.pdf.
 Part Six
TRANS-REGIONAL LINKAGES AND
DYNAMICS
 Chapter Thirteen
The Asian Regional Economy
EDWARD J. LINCOLN

Asia captures the imagination as a dynamic part of the world, driven in part
by very high growth in Japan for the first three decades after the Second
World War and over thirty years of equally high growth in China since 1980.
Today it is an engine of global growth.
Looking at the region as a whole, this chapter makes four major points.
First, the region is characterized by extreme diversity in economic size and
affluence among the various economies. That diversity makes the process of
policy dialogue and cooperation more difficult (than, for example, in
Europe). Second, while some economies in Asia have been the most dynamic
in the world, economic growth has varied widely across the region. Still,
growth in the region as a whole outpaced the world in the two decades from
1992 to 2012—as a consequence Asia as a whole expanded from 21 to 28
percent of global GDP over that time period. Third, many (but not all)
countries around the region have had strengthening trade linkages with
China. Interestingly, as ties with China have strengthened, those with Japan
have generally weakened. Furthermore, broader trade linkages among the
sub-regions of Asia are quite weak, and even within sub-regions, only East
Asia is characterized by relatively strong intraregional trade ties. Fourth,
regional policy dialogue and cooperation has expanded over the last two
decades, but actual outcomes are generally weak and a plethora of
overlapping dialogues characterizes the region, many of which include
participants from outside the region.

THE ECONOMIC LANDSCAPE

One of the striking characteristics of this region is a huge range in size and
affluence among the various economies. The common measure of economic
output for a country is gross domestic product (GDP), the value of all goods
and services produced in a country during a specific period of time (usually
measured quarterly or annually). Figure 13.1 shows the size of annual GDP
in the dozen largest Asian countries in 2012, with the output of each
converted to US dollars at the average exchange rate between the local
currency and the US dollar during the year. Market exchange rates provide an
imperfect way to compare economies since these rates can sometimes make
prices in a country seem unusually high or low. Nevertheless, market rates
still provide a rough guide to comparing the size of countries in the region.
China has emerged as the economic giant of the region. At $8.3 trillion,
China was the second-largest economy in the world, with a GDP that was 52
percent the size of the United States. China also represented a large 43
percent of the GDP of all of Asia. Japan, which had been the second-largest
economy in the world for several decades, is now third, with a GDP of $6.0
trillion. Fundamentally, Asian GDP consists of the top five countries (China,
Japan, India, South Korea, and Indonesia) and all the rest. For that reason,
figure 13.1 reports the level of GDP for only twelve Asian economies, the
rest ranging in size from $60 billion to only $6 billion. In relative economic
terms, these smaller economies are truly tiny.
 A second economic disparity in Asia is affluence. The region contains
economies with high levels of economic affluence and very poor countries.
The common measure that economists use is GDP divided by the total
population (called GDP per capita), showing the total amount of goods and
services produced in the economy per person. While GDP per capita is a
crude method of measuring affluence (since not all of the output in the
country ends up as household income), it provides at least a rough means of
comparing countries. Figure 13.2 shows GDP per capita at market exchange
rates for East Asian economies. Economists often prefer to use price-adjusted
data (converting data from local currencies to dollars at what are called
purchasing power parity exchange rates). The disparities in figure 13.2 would
be somewhat smaller with this alternative approach, but the basic conclusions
would remain the same.
 Japan began modern economic development well before most other
countries in the region and by the mid-1970s was by far the most affluent
large economy in the region. Since then several other economies in the region
have emerged as centers of affluence, and in 2012 the city-states of Macao
and Singapore actually exceeded the level of GDP per capita in Japan. In
2012 Japan had a GDP per capita measured at market exchange rates of
$46,720, or 94 percent the level of Singapore. At the bottom of the
distribution are Cambodia, Tajikistan, Bangladesh, and Nepal, all below
$1,000, placing them among the poorest nations in the world. China’s GDP
per capita was $6,091, placing it above many of the other countries in Asia.
These disparities matter when considering the possibilities for regional
economic institution building. Economies that are somewhat similar in
overall size or affluence share more common economic interests. Europe
exemplifies a region where the disparities among the nations that originally
formed the European Union were not very large. The very large disparities in
Asia, on the other hand, have been an obstacle to developing institutions or
region-wide economic cooperation. For example, affluent Japan (like all
industrialized nations) protects its inefficient agricultural sector from imports.
One particular source of friction between Japan and its Asian neighbors for
many years has been Japan’s policy of almost complete closure of its rice
market to imports.
The final characteristic of the region is relatively high rates of economic
growth. Economists argue that poor countries are capable of producing very
high rates of economic growth if they can get the fundamentals for a modern
market-based economy in place (along with other supporting factors such as
political stability, strong education policies, and improved public health).
Given the right institutional fundamentals, poor countries can accelerate
growth by importing existing technology from abroad and combining it with
inexpensive domestic labor. This process of “catch-up” can continue until
available technology from abroad has been absorbed and growth has driven
up domestic wages to levels similar to those in the advanced industrial
nations. The experience of some Asian economies has provided the evidence
for the possibilities for “catch-up.”
The story of Asian growth begins with Japan. The process of
industrialization in Japan stretches back to the 1870s, much earlier than most
other economies in Asia. By the time of the Second World War, Japan had
already come a long way, but it lost much of its industrial facilities in a wave
of destruction in the final year of the war. After the Second World War, a
combination of rebuilding from wartime destruction and successful
industrialization strategies resulted in the highest growth rate in the world—
with an average real GDP growth rate (that is, after subtracting inflation) of
almost 10 percent for the period from 1950 to 1973. This prolonged rapid
growth brought Japan into the ranks of the advanced industrial nations, as
noted earlier. Even after the mid-1970s, Japanese economic growth remained
higher than that in the other advanced economies until the end of the 1980s.
Table 13.1 shows economic growth rates since 1980 for a number of
Asian economies. The major story is the very high growth of China
throughout this period, averaging at or close to 10 percent in all three periods
shown in the table. However, since China was so poor when rapid growth
began, it is still far from being an affluent nation, as indicated in the earlier
discussion of GDP per capita. China ought to be able to continue its high
growth for several more decades, although it faces potential constraints from
increasingly dysfunctional air and water pollution, as well as a population
that is now aging rapidly.

Table 13.1. Real GDP Growth Rates (percent)

Growth in Japan, in contrast, has been quite low for much of this period.
As an advanced industrialized nation by the mid-1970s, Japan could no
longer grow at high rates. But a series of problems—a real estate and stock
market price bubble in the late 1980s, poor policy response to the collapses of
the bubble, the 2008 global recession, and the devastating earthquake and
tsunami in 2011—all conspired to keep Japanese growth below its potential
for most of the period since the early 1990s.
India, the other population giant in Asia, has not grown as rapidly as
China. From the 1950s until the mid-1990s, India favored a development
strategy called “import substitution,” in which the government establishes
barriers to imports and to inward investment by foreign firms in order to
stimulate the growth of domestically owned firms. This strategy was not very
successful, as is the case in most developing countries that have tried it.
Rather than promoting domestic growth, this strategy tends to produce very
inefficient domestic firms that actually impede growth beyond a certain point.
Since the mid-1990s, India has lowered import barriers and encouraged
investment by foreign firms. As a result, table 13.1 shows that Indian growth
has accelerated from an average of 5.7 percent in the 1990s to 6.9 percent in
the 2000–12 period. This acceleration is encouraging, though still below the
performance of China.
Growth in the rest of the Asian economies in this table is mixed. On
average, they have grown relatively fast (and faster than the averages in other
parts of the developing world in Latin America, Africa, the Middle East, and
Eastern Europe), but not as fast as China. Some of these countries, and
especially Thailand, Indonesia, and South Korea, were hit by the Asian
financial crisis of 1997, although the negative impact of that crisis was short-
lived. However, average growth in the years from 2000 to the present has
been generally somewhat lower than in the decade prior to the crisis.
Growth in South Asian countries other than India has generally not been
high, due to factors such as the political problems in Pakistan. Bangladesh
has begun to emerge as a major exporter of textiles, and that boosted its
growth to an average of 5.7 percent since 2000. The Central Asian nations
experienced negative growth in the 1990s (probably due to the shock of the
breakup of the Soviet Union) but recovered after 2000 as they developed
exports of raw materials.

Trade Flows
A principal reason people think of Asia as an emerging cohesive region is
rising intraregional trade linkages. However, much of that perception is due
to the rapid rise of China as a trading partner for all other nations in the
region. This shift is due to both China’s rapid economic growth (with an
economy producing more goods to sell to the world, and absorbing more
goods from the rest of the world) and to increased openness to trade as the
ratios of both imports and exports to GDP increased substantially. China’s
rise as a trade partner actually affects many nations in the world, including
the United States and others outside Asia.
While ties with China have risen for many economies around the region,
the rest of the trade story does not suggest that Asia is becoming a more
tightly knit economic bloc. Offsetting the rising importance of China has
been an equally remarkable fall in the relative importance of trade with
Japan. Furthermore, linkages among the several sub-regions of Asia remain
weak. East Asia, for example, has had thin trade ties with South Asia. And
the nations of Central Asia have their major trade ties with Russia and Europe
(and now China), with relatively little trade with East Asia or South Asia.
Even within these sub-regions, intraregional trade ties have been generally
weak except in the case of East Asia.
The pattern of increased relative importance of trade with China is most
evident when looking at Japan. Figure 13.3 shows Japan’s imports. In the
twenty-plus years since 1990, the share of Japan’s imports coming from the
rest of East Asia has steadily increased, from a level of 24 percent to almost
40 percent, a very sizable increase. However, all of that increase is due to
imports from only one country: China. Japan’s imports from East Asia other
than China were no higher as a share of total imports in 2012 than they were
in 1980. Equally important, imports from both South Asia and Central Asia
represent a very low share of Japan’s imports (1 percent for South Asia and
less than 1 percent for Central Asia). The opportunity for expanding
economic ties with India has been a major topic of discussion in Japan for the
past several years, but these data indicate that virtually no change has
occurred in the relative importance of India as a source of imports.
 The picture for Japan’s exports is essentially the same as for imports, as
shown in figure 13.4. Once again, all of East Asia has been an increasingly
important destination for Japanese exports, rising from 20 percent of total
exports in the first half of the 1980s almost 45 percent by 2012. In this case,
East Asia other than China absorbed an increasing share of Japanese exports,
rising from 12 percent to 20 percent from 1980 to 1995, but no increase has
occurred since then. These trends in Japan’s trade help explain why the
Japanese have been leaders in talking about the desirability of dialogue and
cooperation among East Asian governments. The Japanese government has
also expressed increased interest in promoting trade with both India and the
Central Asian nations. However, as figure 13.5 shows clearly, very little of
Japan’s total exports goes to either South Asia or Central Asia. To be sure,
exports to South Asia did increase a bit after 2005, but only from 1 percent of
total exports to 2 percent.
 Figure 13.5 shows ASEAN imports, a sub-region of Asia that has also
experienced rising trade with China. For the sake of brevity, the discussion of
ASEAN, South Asia, and Central Asia will focus on either exports or imports
rather than both as in the case of the discussion above of Japan. Imports from
China were only about 5 percent of total imports from 1980 through the early
1990s, but then began rising rapidly, reaching 18 percent of total imports by
2012. Imports from Japan, in sharp contrast, fell sharply after 1995, dropping
from 26 percent to 13 percent.
Equally interesting is the rise of intraregional trade within ASEAN.
Imports from other ASEAN countries as a share of total imports rose from
roughly 15 percent of total imports in the 1980s to 27 percent by 2012. This
rise is likely due in part to the implementation of the ASEAN Free Trade
Area (AFTA) even though that agreement is generally considered by
economists to be somewhat weak.
In contrast to the linkages with Japan and China, imports from South Asia
are low (only 3 percent of total imports in 2012) while imports from Central
Asia were less than 1 percent. The weakness of trade ties with South Asia is
somewhat surprising given the geographical proximity of at least some
ASEAN members to South Asia.

Consistent with what the data for Japan and ASEAN show, export data for
South Asia show relatively little connection to other parts of Asia. Figure
13.6 shows South Asian exports. East Asia as a whole absorbs a quarter of
South Asian exports, but that share has not expanded over the thirty-plus
years in the figure. Furthermore, neither Japan nor China individually are
major export destinations. Exports to China have risen as a share of total
exports, but not as dramatically as in the case of either Japan or ASEAN
(rising from 5 percent to 10 percent of total exports over the 1980–2012 time
period). Exports to ASEAN behaved very much like those to China, rising
from 5 percent to 10 percent of total exports. The rise in the share of exports
to China and ASEAN is more than fully offset by a drop in exports to Japan
(which fell from a peak of 15 percent in 1990 to only 3 percent by 2012).
Trade among South Asian countries is also low, hovering around 5 percent
of total exports throughout this long time period. The history of political
tensions between India and Pakistan may partially explain this low ratio.
Nonetheless, the contrast between rising intraregional trade within ASEAN
and the lack of such trade within South Asia is quite striking. Finally, South
Asia has virtually no exports to Central Asia, accounting for less than 1
percent of total exports.

Data for Central Asia confirm the lack of a strong connection to most of
the rest of Asia, with the exception of China. In this case, statistical data go
back only to 1992, when the Central Asian nations gained their independence
with the breakup of the Soviet Union. As shown in figure 13.7, exports to
Japan (only 1 percent of total exports in 2012), ASEAN (less than 1 percent),
and South Asia (2 percent) are all very small shares of total exports. As is the
case within South Asia, intraregional trade in Central Asia is also low.
Central Asian exports to other Central Asian countries were only 5 percent of
total exports in 2012, a lower share than in the 1990s.
The one exception to this picture of weak trade linkages with the rest of
Asia is the rapid rise in exports to neighboring China. From a level of 5
percent in the late 1990s, the share of exports to China began rising rapidly
after 2001, reaching 28 percent by 2013. Driving this increase has been
China’s rapidly increasing need for raw materials supplied by these nations
(particularly metals, rare earths, and uranium) over the past decade.

What about China itself? As other nations in the region have experienced
rising trade linkages with China, has the same been true for China’s ties to
the rest of the region? Figure 13.8 shows the pattern of China’s exports.
China is defined as the sum of exports from China, Hong Kong, and Macao,
with the trade among these three deducted from their global exports to avoid
double counting. The principal reason for treating these three together as
China is due to the very large share of trade for Hong Kong and Macao that is
simply transshipment of goods destined ultimately for mainland China or the
rest of the world. The data for China indicate two principal developments: the
share of exports destined for Japan has fallen substantially since 2000, and
the relative size of trade with the rest of Asia has not changed very much. The
shares of exports to ASEAN, South Asia, and Central Asia have all risen
since 2000, but only by one to two percentage points. The very low share of
exports to Central Asia (only 1 percent of China’s exports in 2012) can be
explained partly by the small size of these countries. Thus, while exports
from Central Asia to China have risen sharply as a share of Central Asian
exports, the reverse increase in China’s exports to these countries is small in
the context of total Chinese exports. But it is more difficult to explain the
very low share of exports to South Asia (only 4 percent in 2012). For two
large economies this is a surprisingly low ratio, perhaps indicative of troubled
political relations.

The same flat trend is true for China’s imports, shown in figure 13.9.
Imports from East Asia as a whole have fluctuated in a narrow band of 40 to
45 percent of total exports and were somewhat lower in 2012 than in 1985.
That drop was due to a very sharp downward shift for imports from Japan,
with the share of imports sourced from Japan peaking in 1985 at 37 percent
(a very high ratio) and then falling rather steadily to only 10 percent by 2012.
Imports from ASEAN, on the other hand, rose modestly from 8 percent in
1980 to 13 percent in 2012 (and, while not shown, the share of imports from
South Korea also rose). As with China’s exports, imports from South Asia
and Central Asia have each remained in the range of 1 percent of total
imports.
These trade data for countries and sub-regions of Asia lead to several
conclusions. First, much of what appears to be a rising East Asian bloc is due
to the very rapid rise of China as a trade partner. This, however, is true for all
countries that trade with China, not just those in East Asia. The combination
of very rapid economic growth and the expansion of both exports and imports
as a share of GDP has resulted in this stunning growth of China as a trade
partner. The only partial exception is South Asia, where the rise in the trade
linkage with China was less dramatic.

Second, at the same time that China has become a more important trading
partner, Japan has shrunk in relative importance. The rest of Asia is much
less connected to Japan through trade today than was the case twenty years
earlier. This trend is important because the initial American interest in an
emerging East Asian region was driven by the notion of a region coalescing
around Japan.1 The Japanese certainly saw themselves as de facto informal
leaders in the Asian region as a consequence of their economic size,
affluence, and strong trade ties. That self-perception has diminished. Japan’s
slow economic growth since the early 1990s explains why it has become a
less important export destination for regional exports (relative to the more
rapid growth that has sucked in more imports in China and elsewhere). A
rising value for Japan’s currency (the yen) against other currencies since the
mid-1980s also explains why Japan has declined relatively as a source for
regional imports (as Japanese products have become more expensive due to
the exchange rate movement).
Third, part of what is happening is the result of changing production
location. The relocation of Japanese manufacturing production from high-
cost Japan to lower-cost ASEAN, for example, should explain much of the
decline of Japan as a relative source of China’s imports since 1985 (with
rising imports from Japanese firms producing in ASEAN substituting for
imports directly from Japan). As a result, Japanese firms are still important in
explaining regional trade developments even though Japan as a nation has
become less important as a trade partner.
Fourth, implicit in the trade data is a continuing importance of nations and
regions outside Asia. For the sake of clarity, the figures presented do not
show trade with the United States and Europe. But for much of the region,
both the United States and Europe remain vitally important trade partners. To
provide just one example of this, in 2012, 12 percent of India’s exports went
to the United States, 17 percent to the EU, and 21 percent to the Middle East
and North Africa. These percentages are larger than the share of India’s
exports to any individual country or sub-region of Asia. For the Central Asian
nations, the picture is a bit different, with the United States somewhat less
important, while Russia and Europe are the main trade partners.

Trade Policy
Global trade is loosely governed by the World Trade Organization (WTO),
which presides over global trade negotiations in which all members agree to
mutual reductions in trade barriers. A number of these negotiations have
occurred in the years since 1947 when the organization was originally formed
(then called the General Agreement on Tariffs and Trade). However, the
WTO permits pairs or groups of its members to negotiate so-called free trade
agreements among themselves (not offered to all the other members of the
WTO), as long as they remove substantially all the barriers among
themselves. These agreements have become quite popular around the world
in the past two decades. East Asia is no exception, especially in the years
since 2000.
Some of these agreements have been within the region—the ASEAN Free
Trade Area (AFTA), Japan-Singapore, and others. China, Japan, and India
each have agreements with ASEAN. India has individual agreements with
Japan and South Korea. Those agreements give the image of a region that is
coming closer together as a distinctive economic bloc. Nevertheless, many of
these individual agreements are between governments within the region and
partners outside (South Korea–Chile, India-Chile, Japan-Mexico, Singapore–
United States, and others). The real impact of such agreements in making the
region a more cohesive whole, therefore, is still unclear.
This diversity of intra- and extraregional approaches continues. In 2013,
there were two principal regional free trade negotiations occurring that
involved Asian governments. One was the Trans-Pacific Partnership (TPP)
negotiations, which involved eleven governments (Australia, Brunei, Chile,
Canada, Japan, Malaysia, Mexico, New Zealand, the Philippines, Singapore,
the United States, and Vietnam).2 The other was the Regional Comprehensive
Economic Partnership (RCEP), which involved the ASEAN members,
Australia, China, India, Japan, South Korea, and New Zealand.3 While RCEP
was more clearly centered on governments in Asia, note that it included
Australia and New Zealand, two countries not normally included as part of
Asia. Note also that these two negotiations have a number of overlapping
participants. Of the two negotiations, TPP is more likely to yield an
agreement that will have a significant impact because of strong pressure and
more participants in order for the agreement to be robust, in contrast to a
number of the bilateral and sub-regional agreements worked out within Asia.
The one major lack in TPP is the absence of China, but participants have
been clear to indicate that other nations, including China, are welcome to join
the agreement in the future.
The diversity of intra- and extraregional agreements and negotiations also
reflects the simple reality of the trade data: with the United States, EU, and
other economies outside Asia continuing as major trade partners for nations
within Asia, there is no reason to limit free trade agreements only to partners
within the region. What many countries want is better access to the US
market, and they are aware that negotiations with China or Japan (without the
US government as a participant) are less likely to yield agreements that fully
open markets to their exports.
The same lack of geographical clarity exists for less formal discussions of
economic policy. The oldest group, the Asia-Pacific Economic Cooperation
(APEC) meetings, began in 1989 and includes the United States, Australia,
Canada, and other governments not part of East Asia. APEC members
discuss a number of broad economic issues, but the organization has worked
through a principle of voluntary implementation of decisions (unlike a free
trade area where the agreements are binding on the member countries). Since
1993, APEC has included an annual summit meeting (in addition to the
existing ministerial and working-level meetings), often marking the one time
a year that the American president travels to East Asia.
The ASEAN + 3 group (ASEAN plus Japan, China, and South Korea)
began meeting at the ministerial level in 1995, added a summit meeting in
1997, and was deliberately begun to be a rival or alternative to APEC for East
Asian governments. This purely (East) Asian grouping was motivated in part
by both a general desire to foster a sense of Asian commonality and anger
with the dominance of the United States (particularly over American and
International Monetary Fund reaction to the Asian financial crisis in 1997). In
structure the two groups are quite similar—discussing a number of economic
issues but reaching non-binding decisions. The most substantial decision
emerging from this group was the Chiang Mai Initiative (discussed later in
this chapter).
Even though the ASEAN + 3 group was intended to be an East Asian
alternative to the APEC discussion, it has evolved in a more inclusive
direction. Beginning in 2005, an East Asia Summit meeting has been held
immediately upon the annual ASEAN + 3 discussions. In addition to the
ASEAN + 3 members, the initial East Asia Summit added Australia, New
Zealand, and India. A key motivation for this new organization was the desire
of Japan and some other governments to add another very large country (in
terms of population and GDP) to the discussion to diminish the dominance of
China. However, the membership of the East Asia Summit continued to
expand. Beginning in 2011, both Russia and the United States were invited to
join the group.
 Note that none of these groups includes any governments in South Asia
other than India, nor any of the Central Asian nations. China has its own
dialogue with Central Asia, through the Shanghai Cooperation Organization
(SCO), which also includes Russia as a member. This group began in 1996
(without Uzbekistan and under a different name) and became the SCO in
2001.
All of these groups have a strong focus on economic issues, although all of
them have gained a substantial role in discussing diplomatic and security
issues over the years. None of them have had major accomplishments on the
economic front. The action on trade has been left to the plethora of free trade
negotiations discussed earlier. These groups have mainly been forums for
discussion and information sharing, with some action on trade facilitation
(such as streamlining customs procedures) or development deals (such as
highway construction in Central Asia).
Whether the institutional developments that bring the region together will
proceed, predominantly through a broad approach that includes the United
States, Australia, and others on the Pacific Rim (as in the APEC grouping) or
more narrowly along an Asian format, remains unclear. Nonetheless, the
gradual direction of evolution appears to be to include participants from
outside Asia (such as Australia, New Zealand, the United States, and Russia).
The desire to create organizations just for Asians, partly as a rebuke to
American dominance, that was popular in the late 1980s and 1990s appears to
have faded.

Direct Investment
Trade is not the only way in which economies interact. Foreign direct
investment (FDI) is also important. This form of investment involves
companies owning subsidiaries in other countries (in which they have a
sufficient ownership stake to control the management, with 100 percent
ownership the preferred format but not necessary for control). FDI data,
much like the trade data, show some intraregional activity, but high levels of
involvement by American and European firms as well.
Back in the 1980s and early 1990s, the main development was a new,
large wave of Japanese investment around the region. Particularly after the
yen had risen strongly against the dollar in 1985, Japanese manufacturers
were eager to relocate production to countries with lower labor costs. East
Asian nations were a natural choice (since investing there involved crossing
fewer time zones, easing the task of managing factories abroad). Some
Japanese firms are well known for having established strong regional
production networks, especially in the electronics industry. However, the
Japanese investment wave diminished after the early 1990s (with many firms
facing difficulties at home in Japan due to the collapse of the stock market
and real estate price bubbles and the subsequent period of very low economic
growth). Furthermore, Japanese foreign direct investment within Asia was
almost entirely located in East Asia. Meanwhile, other investors from outside
the region have remained important, and China has now begun to emerge as a
small but growing investor.4
China represents a somewhat exceptional case to the main pattern of
inward investments in the region. Figure 13.10 shows cumulative foreign
direct investment in China for 2011. The main difficulty in evaluating these
data is Hong Kong; it is the source of 45 percent of total investments into
China, but much of that amount represents investments passing through Hong
Kong (including Taiwan, which appears in the figure to be an improbably
small investor in China at only 2 percent of total investments). One can
cautiously conclude, though, that investments from elsewhere in Asia are
important, forming another economic link between the region and China. But
the uncertainty caused by the routing of money through Hong Kong makes it
impossible to say anything about the relative importance of the nationality of
investors.
 Figure 13.11 shows foreign direct investment flows into ASEAN,
comparing 1995–2000, 2001–2005, and 2006–2011. The largest investors in
ASEAN are European firms (19 percent of the total value of foreign direct
investment flowing into ASEAN in the 2006–11 period), followed by Japan
(12 percent) and the United States (9 percent). The relative share of Japanese
firms fell from the level of the 1990s (19 percent of inflows to ASEAN in the
1995–2000 period) and has not recovered to that level of importance.
Whether the creation of the ASEAN Free Trade Area has had an impact on
increased intra-ASEAN investment flows is somewhat unclear (since the
share of investment from within ASEAN fell in the first half of the 2000s but
then rose, reaching 17 percent of total inflows in the 2006–11 period). Most
of the intraregional investment is from Singapore, the affluent member of
ASEAN.
 Investments in India also illustrate the importance of non-Asian sources of
inward direct investment. Figure 13.12 shows the sources of cumulative
direct investment in India. Evaluation is complicated by the fact that the
largest source of investment is Mauritius, and clearly this represents money
simply passing through for tax purposes. With that caveat in mind, the largest
sources of investment in India are Britain (18 percent), the rest of the EU (20
percent), and the United States (17 percent). Japan (6 percent) and Singapore
(5 percent) are the only significant Asian investors in India, and their shares
of the total are far below those of the United States and European investors.
China, South Korea, and Hong Kong are each less than 1 percent of
investments into India.
 This same pattern applies to Central Asia, as illustrated by investments
into Kazakhstan, the largest of the countries in the region. Figure 13.13
shows cumulative foreign direct investment in Kazakhstan as of 2011.
Overall, foreign firms had cumulative investments in Kazakhstan of $96
billion, driven mainly by investments in raw materials (especially uranium).
The big investors in Kazakhstan are from the Netherlands, and the total for all
of Europe is a very high 55 percent. American firms come next at 15 percent.
Although both Chinese and Japanese firms have invested in Kazakhstan
because of their own interest in access to raw materials, neither represented a
substantial share of inward investments.
The overall pattern of foreign direct investment should not be surprising.
Firms of large industrialized countries dominate global direct investments.
Japanese firms certainly fit in that category, and they have been active in
investing, although the bulk of their investments are in other developed
countries and within Asia are concentrated in East Asia. Other than the
special case of China, investments are dominated by American and European
firms. The Chinese have very recently begun to invest abroad, mainly to gain
access to raw materials. The Central Asian countries are an obvious
geographically close source of some raw materials, but Chinese firms have
lagged far behind the dominant European and American investors.

Financial Cooperation
The Asian financial crisis of 1997 resulted in drastic currency devaluations
and a short but sharp recession in some countries (particularly Thailand,
Indonesia, and South Korea). One consequence of that episode was a regional
discussion of currency cooperation. The major outcome of that discussion
was an agreement in 2000 for central banks in participating countries to
expand “swap agreements” with various partners in Asia. A swap agreement
is one in which the central bank of one country agrees that under certain
circumstances it will lend foreign exchange reserves to another country for
the purposes of intervening in foreign exchange markets to defend its
currency. This agreement, called the Chiang Mai Initiative (CMI), meant for
example that Thailand could borrow US dollars from the central bank of
Japan in order to defend the Thai baht in currency markets.5
In the years since 2000, the CMI has expanded in amount and format.
Originally the agreement concerned strictly bilateral swap agreements, but in
2010 the amounts were pooled in a common fund. Thus if Thailand wanted to
borrow it could go to the common fund rather than individually to the central
banks of Japan, China, and South Korea. As of 2013, the total amount in the
pooled fund was $120 billion, of which 80 percent was pledged by China,
Hong Kong, Japan, and South Korea. The other participants in the agreement
are all of the ASEAN countries, whose small pledges make up the other 20
percent of the fund.
Optimists have seen the Chiang Mai Initiative as leading over a period of
several decades to the kind of tight financial integration that characterizes the
European Union, with its common currency.6 A unified currency would
remove currency fluctuations in the region and presumably thereby increase
the flow of trade and investment (since exporters, importers, and investors
would not need to worry about losing profits through an unexpected
movement in exchange rates). However, there are several reasons for viewing
the Chiang Mai Initiative as a very small step in regional cooperation.
First, participation in the CMI includes only some of the countries in Asia,
entirely within East Asia. There has been no discussion of extending
participation in this agreement to either South or Central Asian governments.
Second, the agreement has been entirely symbolic so far. In the thirteen
years since the original CMI agreement was signed, the swap agreements
have never been activated. During the global recession of 2008–9, the South
Korean government asked the Japanese government to activate its bilateral
CMI swap agreement, borrowing dollars from the Bank of Japan to defend a
weakening South Korean won, but the Japanese government refused. Thus,
the agreement stands as a symbol of the ability of Asian governments to
reach an agreement on financial cooperation outside the framework of the
IMF and without the United States, but it has had no real impact.
 Third, as more countries in Asia move to floating (or at least flexible)
exchange rates, the need for such an agreement has diminished. Swap
agreements provide funds for governments to defend a fixed exchange rate
(often unwisely), but in a market where exchange rates respond daily or at
least frequently to market pressures, the usefulness of intervention is reduced.
That is, foreign investors sometimes invest in developing countries with fixed
exchange rates based on the belief that they face zero risk to their investments
from currency fluctuation. They then pull their money out massively if they
believe the fixed-rate guarantee is becoming untenable. But with a floating or
flexible exchange rate, investors know they face currency risk and therefore
behave in a more prudent fashion. The kind of mass exodus of funds from a
developing country as investors suddenly realize that their assumption of a
fixed rate may be incorrect simply does not occur when exchange rates are
continuously changing.
In the longer run, it is also difficult to envision anything resembling the
Eurozone emerging in Asia, for two important reasons. First, the only way to
manage currency unification is through a single central bank (the European
Central Bank in the case of the Eurozone). It is difficult to imagine any of the
governments in Asia ceding control over their domestic monetary policy to a
common Asian central bank. This skepticism applies especially to the
economic giants of the region, particularly to Japan and China, as they would
struggle bitterly over political control of the bank.
Second, even if a common central bank could be created, the extreme
diversity of economic growth rates, inflation, and levels of affluence all make
a common currency virtually impossible. Fast-growing developing nations
(such as China) and slow-growing mature economies (such as Japan) have
very different macroeconomic conditions and needs for interest rates or
inflation. Thus, aside from the purely political struggle over who would
control the bank, the underlying divergent preferences or needs for monetary
policy militate against strong cooperation. The only reasonable conclusion is
that discussion of currency and other forms of financial cooperation in Asia
will remain theoretical—the stuff of international conferences but not policy
action.

CONCLUSION
The economic story of Asia over the past half century has been a remarkable
one. Rapid economic growth, beginning with Japan and then spreading to a
number of other countries in the region, has transformed the lives of hundreds
of millions of people. Japan, of course, is not growing quickly now, but the
main explanation lies in the fact that it is a mature, advanced industrial nation
with a very high level of affluence. China has been the most remarkable
growth story in recent decades, although it faces challenges in the near future
from both environmental problems and an eventual decline in population.
India appears to have shrugged off its economic sluggishness of the past as
economic reforms have taken place and economic growth has accelerated.
Nonetheless, the economic success of Asia should not be exaggerated.
While some economies have had remarkable success, others have not, and the
region continues to have a wide disparity in levels of affluence as well as in
rates of economic growth. In Central Asia, economic performance has
improved over time, as these countries overcame the initial shock of
becoming independent. In Southeast Asia, growth rates declined somewhat
from the high averages that prevailed prior to the Asian financial crisis of
1997. In South Asia, some have shown accelerated growth (Sri Lanka and
Bangladesh) while others have not (Pakistan and Nepal).
In general, those nations that have attained political stability, embraced
reforms supporting market-based economic activity, lowered import barriers,
and accepted inward foreign direct investment have been the most successful.
Barring disruptions from military conflict or some unexpected global
economic crisis, rapid growth should continue in much of the region in the
coming decade. However, a number of countries are now facing adverse
demographic change. In Japan the population is already falling and rapidly
aging (with a very rapid increase in the share of the population aged sixty-
five or above), all driven by a very low birth rate over the past several
decades. South Korea has a similarly low birth rate and faces a shrinking
population in the near future, although it has been more accepting of
immigration than Japan as an offset to the low birth rate. China is the third
country with a low birth rate. The population continues to grow, but the share
of those aged sixty-five and above is rising and total population will peak
within another decade or two.
The picture of regional economic interactions is mixed. In general the
region has become more closely tied to China through trade (although even
this growing interdependence is not characteristic of South Asian nations,
which have quite limited trade ties with China). As trade linkages with China
have risen, those with Japan have fallen. To be sure, Japanese firms have
invested around the region, with local production substituting for trade in
some cases. Nonetheless, the Japanese do not stand out as the dominant
investors around the region, with investors from outside Asia often investing
as much or more than the Japanese. As a developing economy, China has not
played much of a role investing in the rest of the region except for some
activity in Central Asia driven by raw material access. China’s interest in raw
material investments will probably grow in the next decade, but overall its
role as a source of direct investment will not increase substantially until
wages rise to a point where Chinese firms find it advantageous to relocate
production abroad.
The picture of regional institutions and policy coordination is also mixed
at best. Most regional organizations have been more important in fostering
familiarity and discussion than in creating agreements that yield greater
interaction. Even the one agreement that has attracted considerable attention,
the Chiang Mai Initiative, has been entirely symbolic since it has not been
used. To be sure, free trade agreements have proliferated, but many of these
are with partners outside the region. Even with organizations focused on
general discussion, no clearly defined Asian approach has emerged. ASEAN
3 began as a deliberate effort to create an organization that included only East
Asian members, but now the East Asia Summit includes several non-Asian
participants.
Forecasting what will happen to the region over the next decade is
difficult. The demographic challenge certainly implies that Japan will
continue to grow very slowly—perhaps no more than 1 percent per year on
average. China’s growth may slow too somewhat as the economy copes with
aging, pollution problems, and a shift away from the most labor-intensive
industries (as wages continue to increase). Southeast Asia should continue to
grow rapidly, perhaps helped by relocation of some foreign investments away
from China (as wages in Vietnam and some other Southeast nations look
increasingly attractive to investors relative to China). India should continue to
perform well, but its problem in providing sufficient infrastructure to support
economic growth will probably hold growth below the Chinese level in the
coming decade. For South Asia as a whole, an additional key element is
peace or conflict, both within Afghanistan and Pakistan and between Pakistan
and India. The potential gains from expanded intraregional trade in South
Asia should be significant, but they have clearly been held back by conflict in
the region. Central Asia may do well, driven in part by continued inward
direct investments from Europe; the key for these nations is domestic
political stability that encourages continued large inflows of direct investment
from Europe, the United States, and increasingly China.
What should one conclude from all these developments? In its entirety,
Asia has somewhat outperformed other parts of the world economically. But
high growth is not characteristic of the whole region, and wide disparities in
affluence will remain for decades to come. Trade and investment linkages
within Asia, or even within sub-regions of Asia, give little indication of a
region that is coalescing as an economic bloc, largely for the reasons of
extreme diversity in size, affluence, and performance discussed early in this
chapter. The forecast just presented is relatively optimistic. The potential for
continued or accelerated growth in many parts of the region certainly exists.

NOTES
1. For an example of this view, see Walter Hatch and Kozo Yamamura, Asia in Japan’s Embrace:
Building a Regional Production Alliance (Cambridge: Cambridge University Press, 1996).
2. Office of the US Trade Representative, “Joint Press Statement TPP Ministerial Meeting Bandar
Seri Begawan, Brunei Darussalam,” http://www.ustr.gov/Joint-Press-Statement-TPP-Ministerial-Brunei
(accessed September 12, 2013).
3. ASEAN Secretariat, “Regional Comprehensive Economic Partnership (RCEP) Joint Statement:
The First Meeting of Trade Negotiating Committee,” http://www.asean.org/news/asean-statement-
communiques/item/regional-comprehensive-economic-partnership-rcep-joint-statement-the-first-
meeting-of-trade-negotiating-committee (accessed September 12, 2013).
4. For further details on foreign direct investment flows in East Asia in the 1980s and 1990s, see
Edward J. Lincoln, East Asian Economic Regionalism (Washington, DC: Brookings Institution Press,
2004), 72–113.
5. For analysis of the political and strategic issues in the early evolution of the Chiang Mai Initiative,
see William W. Grimes, Currency and Contest in East Asia: The Great Power Politics of Financial
Regionalism (Ithaca, NY: Cornell University Press, 2009).
6. For examples of enthusiasm in the early 2000s for eventual currency unification, see C. H. Kwan,
Yen Bloc: Toward Economic Integration in Asia (Washington, DC: Brookings Institution Press, 2001);
or Policy Council of the Japan Forum on International Relations, Economic Globalization and Options
for Asia (Tokyo: Japan Forum on International Relations, 2000).
 Chapter Fourteen
Globalization and International Relations in
Asia
NAYAN CHANDA

There are perhaps as many definitions of globalization as there are Hindu

gods. It is thus imperative to begin with a brief definition used in this chapter.
In my 2007 book on globalization, I argued that it is a long historical process
of growing connections at different levels among societies that has matured
into today’s interdependent world.1 At least four distinct human motivations
have created and continue to shape the interconnected world we know today:
to find a safer, more prosperous, and fulfilling life as expressed in the desire
to profit from trade; the urge to convert fellow human beings to one’s belief;
the desire to explore and enjoy the unknown; and the urge to dominate and
control others.
The same basic motivations drive many more actors in integrating the
world: yesterday’s traders are today’s corporations and businesses, the ranks
of religious preachers have expanded with new secular believers who now
include NGOs and civil society organizations, and the desire to explore and
settle that led adventurers now drives migrants and tourists. What began in
the dawn of history as a leader/warrior’s urge to dominate others and secure
resources spawned kingdoms and empires, laying the foundation of modern
states. Successors of empires have emerged as sovereign states, inheriting the
role of the “warriors” or colonizers as providers of security and law.
Compared to other regions of the world, Asian countries have been shaped
most of all by traders and preachers during much of the modern era. The
region’s openness to trade and foreign contact also gave Asia a prime
position as the shaper of a globalized world. Asia’s early success in
manufacturing— cotton textiles and jewelry in India, silk and porcelain in
China—and the lure of its products, including spices, tea, and pearls, have
invited traders from the Mediterranean world. They traveled the Silk Road
and sailed across the Arabian Sea and Indian Ocean to reach the ultimate
source of luxury in Asia. Indians sipped Italian wine, and the ultimate proof
of wealth in the twelfth century was owning African slaves. Muslim traders
from India and Arabia introduced Islam to Southeast Asia. During the Age of
Exploration in the sixteenth century, those early contacts exploded into large-
scale trade and the introduction of Christianity to large parts of Asia ruled by
traders-turned-colonial-rulers. The Opium Wars and Commodore Perry’s
forcible “opening” of the Japanese “door” were only more recent examples of
traders and warriors shaping Asian history. European presence in the region
also exposed Europeans to Asian philosophy and science.2
Ironically, Taoist philosophy brought from China to France introduced the
concept of laissez-faire, whereas European contact introduced Marxism-
Leninism into Asia—the consequences of which are still being felt long after
colonial rule has crumbled.
In the post–World War II period, traders—more than any other actors—
have come to shape the Asian scene. In recent decades, trade as a percentage
of the GDP has continued to grow—increasing the role of globalization in the
development of the region. The word globalization that has become
increasingly current in Asian vocabulary, however, burst into public
consciousness with the storm of the 1997 Asian financial crisis—the first
major traumatic event on a region-wide scale brought about by foreign
connections. This would be repeated again in 2008 when a financial crisis
unleashed in the United States shook the global economy, and the shockwave
continued to rattle the region in 2013. In the political turmoil that ensued
following the 1997 crisis, one regime (Indonesia) was toppled, two
governments (Thailand and South Korea) had to cede place to the opposition,
and in another (Malaysia) a major crisis split the ruling party. The anti-
globalization movement, sputtering so far among small groups of ecologists
or left-wing Asians, gained wider adherents. As Samuel Kim has noted, given
the extremely trade-dependent character of East Asian countries,
There is no exit from globalization that would not entail major economic, social and political
sacrifices. The strategic choice for East Asian countries is no longer, if it ever was, between exit
and engagement, it is one of constant adaptation to the logic of globalization and quickening
economic, cultural and social product cycles.3
 FINANCIAL GLOBALIZATION: ORDEAL OF FIRE

History is a continuum, and any attempt at periodization is bound to be

artificial and fragmented. Still, several technological and policy
developments in the field of trade and finance came together in the past three
decades to make this period an intensified phase in which globalization
played a critical role. The 1985 Plaza Accord forced Japan to revalue the yen
and begin offshoring its production to low-cost Southeast Asia. The Big Bang
financial reform in Britain (1986) was followed shortly thereafter by other
European countries, and the United States opened its capital markets to the
world (daily transactions in ten stock markets in the world rose from $900
million in 1992 to $1.2 billion in 1995). The beginning of twenty-four-hour
electronic fund transfers and electronic stock trading,4 the start of GATT’s
(General Agreement on Tariffs and Trade) Uruguay Round in 1986 (leading
to the formation of the World Trade Organization in 1995), and the launching
of Deng Xiaoping’s opening of China to international trade and investment
all accelerated globalization in Asia. In 1985 Deng proclaimed that the
principal characteristics of the current era in international relations were
“peace and development” and that China needed a peaceful environment in
which to pursue its economic development.5 In 1991, faced with a financial
crisis, India too began shedding its socialist policies and opening its door to
foreign investment and trade. These were among the more important
developments that boosted all the forces of globalization—most importantly
that of traders with the flow of goods and services, and adventurers, including
tourists and migrants.
Booming trade and investment of the late 1980s and early 1990s, which
produced Asia’s economic miracle, not only resulted in the strengthening of
ties among East Asian countries, but also bred new political confidence—
epitomized in the claim of special “Asian values” that lay behind the region’s
stunning economic success. The economic boom strengthened reformers who
had embraced foreign trade and investment implied by globalization.
However, the 1997 financial crisis that devastated the economies of large
parts of East Asia dealt a severe blow to the idea of globalization as much as
it humbled the proponents of Asian values. Thanks to the volatility
introduced by the region’s growing integration with the rest of the world, it
has been repeatedly marked by economic ups and downs. The economic
troubles, environmental degradation, terrorist threat, and rising civil society
opposition that have marked sixteen years since the 1997 crisis offer
examples of how the relationships among the states of East Asia have been
affected by the actions of the other three actors of globalization, viz.,
preachers, adventurers, and warriors.
Beginning in the 1980s, the openness of East Asian countries allowed
multinational corporations, foreign banks, financial institutions, and domestic
entrepreneurs to play an increasingly dominant role in the economy. While
the state formally controlled the levers of finance, they were increasingly
dealing with the waves created by non-state actors—traders to immigrants,
bloggers, and globally linked NGOs—far from their borders. Ironically, rapid
economic growth brought about by globalization raised people’s living
standards and conferred a degree of legitimacy on the authoritarian regimes.
The patina of economic performance seemed to justify the claim that
authoritarian Asian values were a recipe for stability and prosperity. With its
unique approach based on dialogue, consensus, and non-interference, the
Association of Southeast Asian Nations (ASEAN) was proclaimed to be
leading the global order toward a “Pacific Century.” But the financial crisis
that burst upon Asia with sudden fury on July 2, 1997, and again on
September 15, 2008, not only wrecked that scenario but was also a stark
reminder of the lack of power held by Westphalian states before the forces
released by traders and financiers around the globe. The weakness of states
was on display again in the years since the 2008 collapse of Lehman Brothers
and the ensuing financial storm.
In the 1990s a conjuncture of happy circumstances—from the bull run in
the US stock market to capital flight from post-Soviet Russia—made traders
the most influential players in Asia. With its open economies, trade-friendly
policies, and cheap labor, Asia drew a large part of some $938 billion in
cumulative funds that was invested in 1990–97. Awash with funds, foreign
investors placed their bets on risky high-return projects and stocks. But when
the first sign of trouble came from Thailand, foreign funds—much of it hot
money—quickly fled the region. In 1997 alone the outflow amounted to $16
billion, or 11 percent of the GDP of the affected countries.6 After a timid
attempt to stem the tide of devaluation, currencies of the region fell like
dominoes. Unlike Mexico, it was not large public-sector deficits but lack of
liquidity in the private sector that humbled Asian states. Traders who had
brought unprecedented prosperity were now responsible for the shipwreck.
If globalization in the shape of the outflow of foreign funds bore a major
responsibility for the crisis, the recovery ironically reinforced Asia’s position
in an integrated world. In a dramatic display of the impotence of the nation-
state, affected countries had to accept IMF bailout packages on onerous
conditions that made the suffering even more acute. Any attempt to have
sovereign control over national currencies by pegging them to foreign
currencies was given up in favor of a float. East Asia emerged from the crisis
after being forced to adopt policies and practices that had become global. The
domestic price was heavy. Some 20 million people were pushed back into
poverty, and several million children of jobless parents had to leave school.
Globalization has always been the force behind the region’s development, but
the 1997 crisis can be said to have been the ordeal of fire that forced East
Asia to formally and consciously join the globalized world. Thus even after
the ravages of the 1997 crisis, Asia was not about to recoil from globalization
and retreat into isolation. In practical terms it meant reforming their economy
and governance to match the expectation of foreign investors and partners.
The financial capital that fled in panic during the crisis returned, and
within two years Asia was well on the path to recovery, thanks to FDI
(foreign direct investment) and resuming exports to the world market and
increasingly to China. Modular manufacturing and fragmented production
systems linking different production centers in the region helped create
regional “growth triangles”—such as the Johor-Riau-Singapore triangle in
Southeast Asia and production hubs in Guangzhou. At least some Southeast
Asians believed that the “absence of war” in Southeast Asia in recent years
should be attributed at least in part to the forces of globalization.7 Closer
economic integration of the region into the web of a supply chain serving
China’s global export engine closely tied the region’s fate with that of China.
It also meant they lost their market share to China in major third-country
markets.8 Still, the growing economic ties and concern about social stability
linked to these ties may also have been a factor in maintaining relative peace
in the region. The region’s economic dependence on China helps to explain
its reluctance to openly embrace the United States as a counterforce despite
growing tension with Beijing over the South China Sea. It also enabled China
to isolate the Philippines for its uncompromising stand on the island dispute.
Cambodia, beneficiary of significant Chinese aid and investment, blocked
adoption of a code of conduct implicitly critical of China for its aggressive
behavior over the South China Sea islands.9
Trade dependence has also had some moderating effect on East Asia’s
foreign relations. Japan’s growing dependence on China as a manufacturing
base and source of imports has led Japanese business interests to oppose the
Japanese prime minister’s provocative visits to the Yasukuni Shrine. Even at
the height of tension with China over the Senkaku/Diaoyu Islands when
Chinese navy frigates directed their fire-control radar at a Japanese destroyer,
Japanese response was measured.10 The Japanese restraint, however, was not
always reciprocated by China, which took the unusual step of halting rare
earth exports to Japan because of the spat between the two countries.
Taiwanese businesses, with more than a million of their employees living in
China, have pressured the government to desist from provocative policies.
The interplay of commerce and security in the territorial dispute in East Asia
offers an insight into the respective roles played by private economic interests
(traders) and the state (successors of warriors). An authoritarian state like
China could to a large extent override the interests of its own traders, as seen
in China’s banning of rare earth exports to Japan designed to hurt Japanese
industry. A democratic Japanese state was more mindful of the interests of its
business community, which, of course, ultimately affects the country’s
prosperity and strength.

TRADE REDEFINES SECURITY

The drive by traders, financiers, and consumers in China to “get rich” and
live better has integrated China firmly with the world economy. While it has
generated a record annual growth rate of 9 to 10 percent, the country’s
security depends on forces beyond its border. China’s unprecedented
openness to the world economy—merchandise export and import accounting
for 56.7 percent of its GDP in 2008 and 70 to 80 percent of its foreign
earnings invested in US treasury bonds and dollar assets—has forced China
to alter its Westphalian concept of territorial security. In a remarkably candid
essay in 2004, Wang Zhengyi, a professor at Peking University, pointed out
how China’s dependence on foreign capital has led it to reconceptualize its
notion of national security. Wang wrote, “Globalization and China’s gradual
incorporation into the world economy not only pose risks for the Chinese
domestic market and its market related society. . . . More important is the
diminishing capacity of the state to govern Chinese economic reform and its
changing society.”11
 The truth of that observation was evident in the aftermath of the 2008
financial crisis. With demand from the United States and Europe collapsing,
China was forced to rebalance its export-driven economy by encouraging
domestic consumption—a course that has proved painful and hard to
implement. Although China’s merchandise trade share of GDP recovered
from a precipitous drop in 2009 (44.2 percent from the previous year’s 56.7
percent), it nevertheless amounted to 47 percent in 2012. Not only China, but
the increasing global integration of all of East Asia has left them more
vulnerable to currency speculators, rapid capital flight, and market crashes
than ever before. The ebb and flow of FDI has also created a more wary
dynamic, both interdependent and competitive, between China and its
Southeast Asian neighbors. As ASEAN countries rely on exporting similar
products to the same markets as China, they have a growing fear of losing
their export market and foreign investment to China. In the decade since the
1997 crisis, that fear about FDI materialized, but China has succeeded in
reassuring the region by stepping up its imports from the region and by
integrating its export industry closely with production of components and
parts in Southeast Asia. While direct US imports from non-Chinese Asian
countries have dramatically declined, Chinese imports from them (mostly
intermediate goods) have grown in reverse proportion—reflecting the rise of
China as the regional production center for export to the United States.12
Singapore prime minister Goh Chok Tong was blunt about the problem: “Our
biggest challenge is . . . to secure a niche for ourselves as China swamps the
world with her high-quality but cheaper products. . . . How does Singapore
compete against 10 post-war Japans, all industrializing and exporting at the
same time?”13
China’s skillful diplomacy turned the 1997 crisis into an opportunity to
win the hearts and minds of Southeast Asia. As the region reeled from the
crisis and resented being lectured by the United States on the perils of crony
capitalism and lack of transparency, China presented itself as a sympathetic
neighbor. It kept its pledge to not engage in competitive devaluation of its
currency to maintain market stability. The US Treasury refused to bail out
Thailand at the height of the currency crisis, while China contributed $1
billion to the stabilization fund, earning Bangkok’s gratitude. Four years later
China followed up its charm offensive by proposing the creation of the
ASEAN-China Free Trade Area (ACFTA) which came into effect in 2010.
This move helped China not only to effectively preempt the region’s fear of a
Chinese juggernaut crushing their export-dependent economy but also to
score points against the regional rival Japan, which resisted linking a free
trade area with ASEAN. The honeymoon with China, though, did not last
long as China’s increasingly assertive posture on territorial issues pushed
ASEAN countries to seek American support, albeit discreetly. The Obama
administration responded by announcing an Asian “pivot” (though the term
was later replaced by “rebalancing”)—a new strategic posture increasing its
presence in the region. Under the resurgent leadership of prime minister
Shinzo Abe, Japan too tried to recover lost ground in the region.
However, given the size of China’s economy and its status as the world’s
second-biggest exporter, its trading fortune connects it to the whole world
and, most importantly, to the world’s biggest economy—the United States.
The flip side of China’s massive gain from trade and FDI flow is that its
economic future, social stability, and even its security are increasingly
dependent on its relations with the United States. Referring to the growing
congressional anger at the Chinese trade surplus and its low renminbi, US
Treasury Secretary Henry Paulson bluntly said, “China has become a symbol
for globalization fears” in the United States. While he urged the US Congress
to be patient, he said it was critical “to persuade the Chinese to reform their
own economy more quickly because the health of their economy affects the
health of the global economy.”14 East Asia’s economy has become so
dependent on China that shots fired in a Sino-American trade dispute are
bound to ricochet through the whole region.
That danger became a little bit more real in the aftermath of the 2008
crisis. As David Shambaugh notes in his China Goes Global: The Partial
Power, “Some observers attribute this to China’s growing self-confidence
and hubris in the wake of the post-2008 global financial crisis, which
coincided with rising American self-doubt and uncertainty about its economic
health and global role.” He writes, “Others believe that China has simply
been “‘lying low’ . . . but is now convinced that the United States is
inexorably declining and it is time for China to assert itself more forcefully
on the world stage.”15 China saw confirmation of its suspicion about US
“containment” strategy in the US backing for another Asian trade group
excluding China. A free trade agreement launched in 2005 by Brunei, Chile,
New Zealand, and Singapore has been expanded into the Trans-Pacific
Partnership (TPP)—as a “comprehensive and high-quality” FTA. Given the
kind of openness the partnership requires, China remains suspicious of its
intent. But it is conceivable that just as it reformed itself in order to join the
World Trade Organization (WTO), China will eventually undertake the
necessary openings to join TPP.
Evidence shows that rule-based trading promoted by the WTO has
prevented a trade war in the wake of the Great Recession of 2009. A TPP that
includes China might help to calm the tension over sovereignty issues. In the
earliest paean for globalization (although the word did not exist then), British
economist Norman Angel argued in 1910 that multiple connections among
modern societies and economies had proved so beneficial that war had
become an “economic impossibility.”16 As the outbreak of World War I
shortly afterward proved, the optimism was premature. But the economic
integration of the world has grown thousands-fold since, making the fear of
massive dislocation caused by war a more plausible deterrent. It is fair to
speculate that business interests in Japan and Taiwan play a calming role in
nationalistic conflict with China. Even the Chinese government, despite its
public posturing, cannot but be concerned about the popular resentment that
would result from the economic dislocation and hardship that a conflict with
Taiwan would bring. Despite publicly chastising the United States in 2011
for its “debt addiction,” China continued to invest in US debt instruments
which reached a record holding of $1.3 trillion in July 2013.
Globalization may have in many ways reduced state power, but in other
ways it has also privileged the holders of state power, especially when private
economic interests and state power have become entangled. When in January
2006 the Singapore government’s investment arm, Temasek Holdings,
purchased a controlling stake in Thailand’s dominant phone company, Shin,
owned by Prime Minister Thaksin’s family, for $1.9 billion in a tax-free deal,
protests broke out in Thailand against the sale of the country’s
communications crown jewel. Eventually the uproar set the stage for a
military coup in September that removed Thaksin from power. However, in
2011, under the premiership of Thaksin’s sister, Yingluck Shinawatra,
normal trade and investment relations were restored. Singapore’s interest in
investment opportunities in Thailand and the latter’s concern about its service
and goods exports ensured that the differences would be patched up.

MIGRANTS AND TOURISTS

Uneven development in the region provided both push and pull factors for
migration—both legal and illegal. The migrant workers from Asia’s less
developed economies served as a conduit for region-wide redistribution of
the wealth generated by the global economic boom. In 2012 some 50 million
people from the Asia-Pacific region were migrant workers. Remittances sent
by immigrant workers between 2000 and 2007 more than doubled, to $121
billion. In the aftermath of the global financial crisis the remittances rose to
$177 billion.17
The Philippines, the largest exporter of labor in Asia, received $16.4
billion in remittances, which amounted to 13 percent of GDP.18 While the
remittances from migrants remain a valuable source of foreign exchange and
interdependence among neighbors, their treatment in host countries could
equally be a source of friction. In the wake of large-scale business closures in
1997 and attempts to expel illegal migrants, tension arose among Southeast
Asian neighbors who had once tolerated, even encouraged, illegal migration
in times of economic boom. In particular, Malaysia deported large numbers
of Indonesian workers and deployed naval patrols to block new arrivals.
While new jobs are being created in labor-importing countries, the number of
unemployed in labor-exporting countries is growing faster, leading to
increasing concern. In January 2007 ASEAN leaders signed an agreement to
aid and regulate migrant workers whose treatment could prove to be a source
of tension. The smuggling of migrant Chinese workers and trafficking of
women in Japan, for instance, remain a potential cause for friction.
Tourism was historically driven by individuals. But with the arrival of
wide-body aircraft and economic growth in the region, mass tourism has
emerged as an important source of national income in many countries.
Accordingly, countries with the ability to send tourist dollars have gained
importance. In the late 1990s, with a swelling trade surplus causing
unhappiness among its trade partners, Japan created a program that “aimed”
at doubling Japanese outbound tourism. Japan hoped that the arrival of
thousands of tourists would be interpreted as Japan’s willingness to
redistribute the economic gains from its massive trade surplus and be seen as
evidence of economic fairness. The drive, however, did not last long. While
Japanese golf tourism drew the ire of environmentalists, the 1997 financial
crisis saw a drastic decline in tourism. After the collapse of the Japanese
bubble, it was Japan’s turn to develop a policy to attract foreign tourists. A
rising China has since taken up the slack. Compared to only 4.5 million
Chinese who traveled overseas in 1995, the figure increased to 31 million in
2005, far surpassing Japan.19 Beijing could be seen as bestowing favor on a
country by including it on its list of approved destinations. In 2010 some 70
million Chinese tourists left home, though only 20 million traveled to foreign
countries.20
The growth of tourism and its importance for the national budget of many
countries also makes the countries vulnerable to other unpredictable
outcomes of an integrated world, including environmental threats and the
spread of a pandemic. The SARS crisis that hit China and Southeast Asia was
a classic example of the danger inherent in the growth of mass travel on fast
transports. The SARS virus emerged in South China by the end of 2002,
spread to Hong Kong in early 2003, and then, thanks to busy air travel, within
three months affected thirty countries worldwide, killing some eight hundred
people. Flights in large parts of Asia were grounded, dealing a heavy blow to
trade and tourism. It was a threat for which the Westphalian state system had
no answer other than to simply batten down the hatches. As a global problem,
its solution had to be found by working in close cooperation with a global
institution like the World Health Organization. Deprived of tourist revenue
and suffering heavy losses from business shutdowns and the culling of
poultry stock, regional governments were resentful of the WHO advisory on
grounding flights, yet they had no option but to accept this infringement of
their sovereignty. And the crisis took less of a toll than it could have without
these cooperative measures.

NGOs AS THE NEW PREACHERS

The stepped-up economic development pushed by foreign investment has

caused some concerns about the abuse of labor, human rights, and
environmental degradation—issues that have not been a traditional priority
for East Asian governments. The new secular preachers—non-governmental
organizations and civil society community activists—have sprouted in many
countries to uphold these causes and pressure governments and corporations.
While eager not to discourage foreign investors, governments have often
turned a blind eye to labor or environmental issues on which NGOs have
campaigned and forced governments to redress grievances. To the chagrin of
authoritarian governments, their advocacy of good environmental policy,
transparent governance, and grassroots democracy has promoted liberal
democratic political culture and formation of civil society. With the spread of
the Internet and ease of travel, small local NGOs have gained greater voice as
their overseas backers have often lent their megaphones. The NGOs played
an important role in forcing the hand of the Burmese (Myanmar) military
junta to shelve the large Chinese-funded project of a hydroelectric dam. Their
courageous advocacy of democracy added to the economic pressure that led
Burma to open up the country to Western investment and take its first steps
toward democratic reform.21
Although small NGOs concerned with local welfare and environment
issues have been in existence for a while, growing trade and tourism have
opened the door to linkage with international NGOs for information,
coordination, and sustenance. As the NGOs have geared up to oppose
policies of major international financial institutions—such as the
International Monetary Fund, the World Bank, and the World Trade
Organization—larger support and strategy coordination were made available
from external sources. While governments have tried to control, if not
altogether prevent, such international linkages (Malaysia’s former prime
minister Dr. Mahathir even accused NGOs of being agents of Western neo-
Liberal policy) with national NGOs, under growing public pressure,
especially since the 1997 crisis, the World Bank has accepted the role of the
civil society in policy making. That has not deterred authoritarian
governments from trying to stifle the voice of civil society. In 2013 a
consortium of NGOs gathering in Switzerland called on the governments of
Vietnam, Cambodia, and Thailand “to immediately and unconditionally
release all bloggers, journalists, activists and human rights defenders detained
for peacefully expressing their opinion, and to stop harassment and
intimidation of free voices.”22
Tourism that affects indigenous people’s livelihoods as well as sex
tourism has provoked protests by local activists and international
condemnation, succeeding in bringing change in government policy.23
Foreign investment in Southeast Asia’s extractive industries and forestry has
long worried environ-mentalists. Concern over what has been called “Japan’s
shadow ecology” has united activists around the region, leading to region-
wide campaigns against mining, timber felling, and Japanese golf tourism.24
Japanese environmentalist groups joined ranks in protesting Japanese
corporations’ role in this degradation. Since the late 1990s, however, China
has replaced Japan as the largest importer of agricultural and forestry
products from Southeast Asia, causing a negative environmental impact.
Given the region’s growing dependence on China, though, the expression of
environmentalist concern has been muted. Not so in the case of Japan where
acid rain has been blamed on China’s coal-fired industry, causing strong
public anger. The irony that some of the pollution in China could well be
related to manufacturing of Japanese export goods has been conveniently
ignored. Since 1997, though, the Japanese foreign ministry started offering a
training program and grant of monitoring equipment to measure acid rain.
Some regret that the preeminence given to economic development has
meant that Asian countries “have gone from resisting transnational control to
offering incentives to attract foreign investors. Nationalism no longer is the
glue that melds interests, and more difficult issues of class have become more
central to domestic politics.”25 While rejecting the neo-Liberal recipe for
growth through globalization, the opponents have not yet come up with an
alternative that does not rely on international finance and trans-national
corporations and their mediating institutions.
The state’s efforts to maintain its power amid globalization are challenged
by the instant and constant diffusion of information and the rise of civil
society activism. A case in point was a lawsuit brought by a trans-national
political coalition of local citizens of Aceh and North American activists and
civil rights NGOs against ExxonMobil for bankrolling elements of the
Indonesian armed forces, which used extreme and illegal violence to protect
their gas fields and liquefied natural gas production facilities. As one author
observed, foreign investors’ use of local forces to protect their interest is not
new in globalization, but what is new is the trans-nationalization of universal
legal standards of justice.26
As the Burmese military sought to improve ties with the West, US-and
Europe-based NGOs urged foreign companies to reconsider investing in
Burma until the human rights situation improves. A US-based environmental
NGO, International Rivers, even submitted a petition to shareholders of
China’s Sinohydro Corporation to hold off their giant hydroelectric project in
Burma.27
Vietnam initially tolerated the campaign launched by civil society, backed
by Vietnamese living abroad, to offer justice to wronged individuals, but it
has become increasingly intolerant of criticism as it touched on the
legitimacy of the government.28 It has imposed draconian regulation to
control the Internet and has jailed bloggers. Thailand too has used lèse-
majesté to silence critics.
While targeting foreign multinationals was easy, pollution caused by
greedy businesses of a neighboring country has proved more difficult. In
1994, 1997, and in 2013 forest fires in Indonesia caused by entrepreneurs
clearing land for profitable palm oil plantations sent a thick haze all over
Southeast Asia. It not only caused health problems in neighboring Singapore
and Malaysia, but it also forced their airports to shut down at substantial
financial loss.29 Tempers rose and sharp editorials were written condemning
Indonesia, but little else could be done.
The environmental degradation and pollution that resulted from economic
development and foreign-funded projects nevertheless spawned a vigorous
anti-globalization movement. Over the years, national NGOs in Thailand—
the country with an established tradition of such activism—have had limited
success in opposing foreign-funded projects. Kevin Hewison, who has
studied the case of the Thai anti-globalization protest movement, concluded,
“There is no politically sound nor a viable economic alternative proffered by
the localists.” Thailand’s new populism, he noted, was “reactionary,
romantic, anti-urban,” and chauvinistic.30 In Singapore, China, and Indonesia,
NGOs supporting labor rights and human rights have been accused of being
agents of “cultural imperialism” and “foreign subversion.” Yet the supporters
of global integration admit that emerging international civil society,
concerned with human rights, the environment, and social welfare, may be a
critical antidote to the negative forces of globalization. But, as the Indonesian
example shows and as the Chinese government fears, it may pose a threat to
the power of the state.

NEW NON-STATE ACTORS: PREACHERS OF TERROR

Islam arrived in Southeast Asia peacefully with Indian Muslim and Arab
traders in the fifteenth and sixteenth centuries when the faith was mostly
syncretic and moderate, adapted to the region’s existing cultures. Although
Indonesia made periodic attempts to institute a fundamentalist version of the
faith, the country as a whole as well as Malaysia practiced a moderate,
secular kind of Islam.
That, however, began changing in the early 1990s when Suharto’s
authoritarian regime began emphasizing the Islamic nature of the state. In
2001 Malaysian prime minister Dr. Mahathir announced that the country was
an Islamic state. Wider travel, foreign education, and arrival of Saudi Arabian
funding for building mosques and religious schools led to a growing
influence of Middle Eastern Islamic theory and practice, threatening to
transform Southeast Asian Islam from an inclusive, syncretic, and pluralist
religion to an exclusive Arabized form of Islam. Against such a changing
background came the 9/11 terrorist attacks and the subsequent US war on
terror.
The trader-preachers of the sixteenth century who connected Southeast
Asia, where some 30 percent of the world’s Muslims live, with the world of
Islam have now been replaced by new preachers. Aided by global travel and
an unfettered flow of information and arms, these new preachers plot to
violently supplant what they see as Western globalization with a global
Islamic ummah.31 Thailand’s Muslim south has emerged as a hotbed for
militancy where Buddhist officials, teachers, and civilians are being killed in
large numbers (some 5,500 since 2004), and the government is frequently
engaged in bloody, but not so successful, counter-insurgency operations. In
2013 the Thai government floated the idea of limited autonomy for the South
(full autonomy is unthinkable in a Buddhist-majority kingdom), but peace
remains elusive as leaders of the ethnic Malay insurgency want full
independence. The fact that the main insurgent organization, the Patani
United Liberation Organization (PULO), is faction ridden does not help in
reaching an agreement. A similar demand for independence in the Southern
Philippines has embroiled the Christian government in Manila in a prolonged
bloody war. The United States, which listed one of the Filipino groups among
its international terrorist roster, continued to offer military training and advice
to the government. But repeated peace agreements concluded with different
factions of the Islamic insurgents have evaporated in violence.
While a majority of Southeast Asia’s peaceful, moderate Muslims were
troubled by what appeared to be the West’s war on Islam, militant Islamic
sects like Al Ma’unah (Brotherhood of Inner Power) in northern Malaysia
and Abu Sayyaf (Father of the Sword) in southern Mindanao were
emboldened in their violent anti-West campaigns. Hitherto unknown
shadowy groups like Lascar Jihad and Jemaah Islamiyah (JI) with al Qaeda
connections emerged in Southeast Asia to carry out terrorist attacks against
Western targets and launch violent campaigns against Christians. Spates of
bombings from Bali to Jakarta and the killing of Christians in Ambon were
chilling reminders of the new threat. Although the JI has suffered setbacks
with the jailing of its spiritual leader Abu Bakar Ba’aysir and some of its key
operatives captured abroad, the movement continues to recruit and motivate
followers to create an Islamic caliphate. An Australian intelligence report
estimated JI’s membership between 900 and several thousand, spread
throughout Indonesia and neighboring Southeast Asian countries, including
Malaysia, the Philippines, Thailand, and Cambodia. The Australian report
states that most of JI’s funding is derived from member contributions,
charities, and legitimate business activities. But JI has also received funding
from robberies and Middle East–based terrorist financiers in Saudi Arabia
and Yemen.32
With assistance and encouragement from outside, Islam in China’s
Xinjiang region, too, is undergoing a revival. As Dru Gladney notes, China
has become more keenly aware of the importance that foreign Muslim
governments place on its treatment of its Muslim minorities as a factor in
China’s lucrative trade and military agreements. “The increased
transnationalism of China’s Muslims,” he writes, “will be an important factor
in their ethnic expression as well as in their accommodation to Chinese
culture and state authority.”33
While Christian groups in Indonesia are seeking external support in
holding their ground against Islamic attacks, the faith seems to be gaining
new adherents in China by leaps and bounds. According to the Center for the
Study of Global Christianity, there are 10,000 conversions in China every
day, and in their estimate, by 2050 there will be 218 million Christians in
China, or 16 percent of the population—enough to make China the world’s
second-largest Christian nation. Given the Communist Party’s attempt to
retain control of various religious groups, such a growth of Christianity
would be a matter of concern, especially if they get support from churches
outside of China.34

CYBER-SPACE: NEW ARENA OF CONTESTATION

Over the last decade, Asia’s interconnectedness has grown exponentially. The
Internet, which was slow to take off in the early 1990s, accelerated
dramatically during the Silicon Valley boom at the end of the twentieth
century. China’s online users—which numbered 137 million in 2007—were
projected to reach 718 million by 2013.35 With the world’s largest number of
Internet users, China emerged as the home of one of the biggest web retailers
and business-to-business operations. Other Asian countries have opened up
this public space for discourse in addition to providing the network for
businesses to expand beyond territorial borders. The Internet network enabled
Asia to take full advantage of the supply-chain economy and just-in-time
production that revolutionized world trade in manufactured goods.
The most significant impact of the rise of the Internet was the opening of
public forums for criticism and dissidence otherwise unthinkable in one-party
states like China and Vietnam. The Internet also provides a space where
citizens can let off steam, thereby diverting attention from and at least
temporarily absolving the government from action. The impact of the Web on
domestic political stability and relations with neighbors, however, could be
even more far-reaching. It was through surreptitious Internet coordination
that the Falun Gong could hold their daring protest demonstration in the heart
of Beijing in 1999, requiring the government to order a massive crackdown.
The mistaken US bombing of the Chinese embassy in Belgrade in 1999
provoked intense nationalist outrage in China. By setting up websites where
the citizens could vent their anger and thus be heard worldwide, Beijing
authorities could contain the emotions from spilling over. Even then the
emotions raised through the Internet boiled over into violent protests against
the US embassy in Beijing. The government attempt to let Chinese anger at
Japanese prime minister Junichiro Koizumi’s repeated visits to the Yasukuni
Shrine be dissipated through online insult and vitriol did not, however, work
as hoped. The Chinese government had to shut down a number of chat rooms
and bulletin boards.36
The introduction of a Chinese equivalent of Twitter—weibo—had a
dramatic impact on Chinese civil society. China’s microblog site Sina.com,
with its more than 500 million registered accounts and about 54 million daily
users, emerged as noisy critics and disseminators of information and rumor,
often succeeding in breaking the government-imposed wall of silence and
mobilizing public opinion, even bringing about punishment of government
officials.37 The one-party state strikes back.38 It is ironic that closer
integration of the world through technologies of the future could be used to
rake the coals of ancient fires. Relations between Japan and South Korea and
between China and South Korea, too, were affected by acrimony and insults
hurled at each other over the Internet. Uncensored and direct criticism by
nationalists on all sides not only raised public temperature; they made
government efforts to pursue rational policy and solution through quiet
diplomacy more difficult. Web vandalism and shrill criticism on the Internet
over the somewhat esoteric subject of the origins of the Koguryo Kingdom,
nearly 2,000 years old, has soured relations between China and South
Korea.39 However, the most serious cyber-attacks were launched by North
Korea against its Southern rival. In March 2013, around the time tension was
high in the peninsula over Pyongyang’s nuclear test, North Korean cyber-
attacks disrupted South Korean banking and government operation by
disabling 32,000 computers. Again, in June, South Korean government
websites were attacked by North Korean hackers. The Internet, a major gift of
globalization, has become a powerful tool to disrupt an integrated world.
In 2005 a so-called cyber-roots campaign against Japan’s bid for a
permanent seat in the UN Security Council was vigorously adopted by
Chinese Internet users and managed to obtain 22 million signatures. Chinese
nationalists have also used the Internet to call for a boycott of Japanese goods
and tried to change the government’s policies toward Japan. While allowing
opportunity for activists to vent their anger, Beijing remains wary of the
Internet as a double-edged sword. What begins as hyperventilating in
cyberspace could easily spread to the street, and the target of attack could
well be the government that failed to live up to the expectations created by
chat-room rage.40 The public outrage that followed a blogger’s protest about
“erosion of Chinese culture” from Starbucks operating inside Beijing’s
hallowed Forbidden City was a reminder to foreign investors about China’s
nationalist sensitivities.
The public space for discussion also holds the threat of upsetting the
Communist Party’s control. All the while encouraging the spread of the
Internet as a tool of business productivity and communications, the Chinese
government maintains a cyber-police force estimated to be 40,000 strong and
a security apparatus for the surveillance of the Web and enforcing the
government ban on dissemination of undesirable information.41 Beijing has
tracked down writers of politically sensitive e-mails and jailed them. With
government efforts employing sophisticated hardware and software for
filtering and tracking Internet output, combined with activists trying a variety
of techniques to bypass controls, a veritable cat-and-mouse game is on. As
Chinese dissident Liu Xiaobo wrote in an online essay, “The Internet
provides an information channel that the Chinese dictators cannot completely
censor, it allows people to speak and communicate, and it offers a platform
for spontaneous civilian organization.”42

CONCLUSION

In analyzing Asia’s evolving system in the light of China’s rise, in the 2005
study Power Shift: China and Asia’s New Dynamics, volume editor David
Shambaugh posited seven possible models that still provide a useful
framework for pondering the impact of globalization on international
relations in the region. The seven scenarios considered are the China-
dominated hegemonic system; the major power rivalry model involving the
United States and China; an American-centric “hub-and-spokes” model; a
concert-of-powers model involving equally powerful regional countries; a
US-China condominium of power model; a region-wide normative
community model centered on ASEAN, ARF (ASEAN Regional Forum), and
the Shanghai Cooperation Council; and, finally, a complex interdependence
model that rises above state structure to take into account multiple linkages
brought by non-state actors (in his introductory chapter to this volume,
Shambaugh focuses even greater attention on the importance of sub-state
actors in defining international relations in Asia today). In light of the role of
non-state actors surveyed in this chapter, I conclude that his last scenario
offers the most accurate description of the new power equation.
From the brief survey of the non-state actors of globalization—the traders
and entrepreneurs from all over the world, the religious preachers and secular
activists of civil society and NGOs, and the migrants and tourists—it is clear
that empowered by fast transportation and communication, these forces have
been playing an increasingly important role in determining relations between
states. The way the 1997 Asian financial crisis unfolded, bringing about the
fall of the Suharto regime and changes of government in Thailand and South
Korea, was clear evidence of the rise of a new era in which fast-paced
movement of capital, instantaneous communication, and mass movement of
people across territorial borders played a more decisive role in countries’
relations than that played by a hegemon, a concert of regional and
international powers, or even a normative community like ASEAN. As
Shambaugh aptly put it, “The core actor in this [interdependence] model is
not the nation-state, but a plethora of nonstate actors and processes—many of
which are difficult to measure with any precision—that operate at the societal
level.”43
In the emerging new power equation, governance no longer refers
exclusively to the authority exercised by the Westphalian state. It is
increasingly characterized by cooperation among states and non-state actors
as they deal with other non-state actors like terrorists and criminal gangs and
borderless threats like pandemics and pollution. Without going as far as to
claim that states have been rendered powerless, stuck as they are in the
“straightjacket of globalization,” one could say that relationships among
states have become subject to a far more complex set of factors than the
simple security concerns of the past. And in deciding what course to follow,
the Asian states or any states for that matter have far less independence than
they have ever had before. Asia’s aspiring hegemon, China, is well aware of
its contradictions embodied in its desire to be a dominant power and its
reluctance to bear the cost of that policy. As David Shambaugh puts it,
“China possesses multiple international identities and is a conflicted country
in its international persona.”44 He quotes China’s foreign minister Yang
Jiechi as saying, “We know full well that in this interdependent world,
China’s future is closely linked to that of the world. Our own interests and
those of others are best served when we work together to expand common
interests, share responsibilities, and seek win-win outcomes.”
The extent of this interdependence took some time to be revealed. In the
heyday of Asia’s economic boom that followed the 1997 crisis, a theory had
seduced many economists: a “decoupling” of Asia. These economists were
impressed by the economic reform and resiliency of Chinese and Southeast
Asian economies in overcoming the crisis. Closer integration among the
countries and booming trade convinced them that the dynamism of the region
could finally “decouple” it from the swings of US and Western markets and
let it prosper on its own steam. The synchronous fall in worldwide trade
(averaging a 20 percent fall) that followed the Wall Street collapse in 2008,
though, immediately affected Asia. Those who thought they were shielded
because of their close trade ties with China and not the United States realized
that the components they produced for Chinese companies were destined for
American and European markets. As their demand fell the decline was
transmitted immediately through the global supply chain. Other episodes in
which the global supply chain was affected by lead in Chinese-made toys
(2007) or adulterated ingredients like melamine in Chinese milk (2008) or
when flooding in Thailand led to disruption in supply of hard disks (20
percent of the world production is in Thailand) highlighted the interconnected
nature of the globalized world.45
In order to survive and prosper in an increasingly fast and interconnected
world, the states would have to abide by rules and norms that are common to
all.46 Not only international legitimacy and acceptability, but even domestic
legitimacy of governments is now determined by a larger community far
removed from the territorial jurisdiction of the state.
International relations—whether in Asia or in any other region—have to
be understood as part of the processes collectively called globalization.
Globalization encompasses both nations and individual actors, and the whole
is bigger than the sum of its national parts.

NOTES
1. Nayan Chanda, Bound Together: How Traders, Preachers, Adventurers and Warriors Shaped
Globalization (New Haven, CT: Yale University Press, 2007).
2. See Michael Yahuda, “The Sino-European Encounter: Historical Influences on Contemporary
Relations,” in China-Europe Relations: Perceptions, Policies, and Prospects, ed. David Shambaugh,
Eberhard Sandschneider, and Zhou Hong (London: Routledge, 2007).
3. Samuel S. Kim, ed., East Asia and Globalization (Lanham, MD: Rowman & Little-field, 2000),
21.
4. Peter Conradi, “Round-the-Clock Trading Sessions Forging Links with Europe, Asia,” Toronto
Star, September 22, 1987, 7.
5. See David Shambaugh, ed., Power Shift: China and Asia’s New Dynamics (Berkeley: University
of California Press, 2005), 28.
6. Kim, East Asia and Globalization, 40.
7. “Globalization in Asia: Getting the Breeze without the Bugs” (report from the Conference on
Globalization and Regional Security: Asian Perspectives, Honolulu, February 23–25, 1999),
http://www.apcss.org/Publications/Report_Globalization_in_Asia.html (accessed January 24, 2008).
8. Ellen L. Frost, Asia’s New Regionalism (Boulder, CO: Lynne Rienner, 2008), 162.
9. Joshua Kurlantzick, “ASEAN’s Failures on the South China Sea,”
http://blogs.cfr.org/asia/2012/07/17/aseans-failures-on-the-south-china-sea. The problem was
presciently diagnosed by Liselotte Odgaard, “The South China Sea: ASEAN’s Security Concerns about
China,” Security Dialogue 34, no. 1 (March 2003).
10. Martin Fackler, “Japan Says China Aimed Military Radar at Ship,” New York Times, February 5,
2013, http://www.nytimes.com/2013/02/06/world/asia/japan-china-islands-dispute.html (accessed
August 30, 2013).
11. Wang Zhengyi, “Conceptualizing Economic Security and Governance—China Confronts
Globalization,” Pacific Review 17, no. 4 (2004): 523–45.
12. Asian Development Outlook 2007 (Manila: Asian Development Bank, 2007), 66–79.
13. Quoted in Greg B. Felker, “Southeast Asian Industrialization and the Changing Global
Production System,” Third World Quarterly 24, no. 2 (2003): 255–82.
14. Anna Marie Kukec, “Paulson Says Embrace Globalization,” China Daily Herald, September 15,
2007, http://www.dailyherald.com/story/?id=38463 (accessed September 15, 2007).
15. David Shambaugh, China Goes Global: The Partial Power (Oxford and New York: Oxford
University Press, 2013), 61.
16. Norman Angell, The Great Illusion: A Study of the Relation of Military Power in Nations to Their
Economic and Social Advantage (London: Heinemann, 1910), cited by Strobe Talbott, The Great
Experiment: The Story of Ancient Empires, Modern States, and the Quest for a Global Nation (New
York: Simon & Schuster, 2008), 424.
17. The Global Economic and Financial Crisis: Regional Impacts, Responses and Solutions (New
York: United Nations, 2009), 63.
18. Josef T. Yap, Celia M. Reyes, and Janet S. Cuenca, “Impact of the Global Financial and
Economic Crisis on the Philippines” (paper prepared for the United Nations Development Program,
September 26, 2009, Philippine Institute for Development Studies),
http://www.unicef.org/socialpolicy/files/Impact_of_the_Global_Finanical_and_Economic_Crisis_on_the_Philippines.pd
(accessed September 6, 2013).
19. Howard W. French, “Next Wave of Camera-Wielding Tourists Is from China,” New York Times,
May 17, 2006.
20. Shambaugh, China Goes Global, 255.
21. Bertil Lintner, “Burma: Trouble Brewing for China,” YaleGlobal Online, November 5, 2012,
http://yaleglobal.yale.edu/content/burma-trouble-brewing-china (accessed September 5, 2013).
22. Prachatai, “Stifled Southeast Asian Voices: NGOs Unite against Criminalization of Free
Expression on the Internet,” September 13, 2013, http://prachatai.com/english/node/3692?utm_source
feedburner&utm_medium feed&utm_campaign Feed%3A=pra=chataienglish=%28Prachatai=in
English%29 (accessed September 13, 2013).
23. Peggy Teo, “Striking a Balance for Sustainable Tourism: Implications of the Discourse on
Globalization,” Journal of Sustainable Tourism 10, no. 6 (2002): 459–74.
24. Peter J. Katzenstein and Takashi Shiraishi, eds., Beyond Japan: The Dynamics of East Asian
Regionalism (Ithaca, NY: Cornell University Press, 2006), 216.
25. William K. Tabb, “Globalization, Economic Restructuring and the Democratic Implications,” in
Democracy and Civil Society in Asia, vol. 1, Globalization, Democracy and Civil Society in Asia, ed.
Fahimul Quadir and Jayant Lele (London: Palgrave, 2004), 79.
26. Richard Tanter, “Law, Globalisation and the Control of Southeast Asian Military Terror: Civil
Cases Are Combating Corporate Impunity,” Inside Indonesia,
http://www.insideindonesia.org/edit72/Politics%20Tanter.htm (accessed September 15, 2007).
27. William Boot, “As Burma Opens, Critical NGOs Look In,” Asia Sentinel, May 24, 2013,
http://www.asiasentinel.com/index.php?optioncom_content&task=view&id=5443&Itemid=217
(accessed September 5, 2013).
28. Bill Hayron, Vietnam: Rising Dragon (New Haven, CT: Yale University Press, 2010), 120–22;
Huong Nguyen, “Internet Stirs Activism in Vietnam,” YaleGlobal Online, May 11, 2012,
http://yaleglobal.yale.edu/content/internet-stirs-activism-vietnam (accessed September 5, 2013).
29. James Shinn, ed., Fires Across the Water: Transnational Problems in Asia (New York: Council
on Foreign Relations, 1998), 50.
30. Kevin Hewison, “Resisting Globalization: A Study of Localism in Thailand,” Pacific Review 13,
no. 2 (2000): 279–96.
31. Bryan S. Turner, “Islam, Religious Revival and the Sovereign State,” Muslim World 97 (July
2007): 412.
32. Jemaah Islamiyah,
http://www.nationalsecurity.gov.au/agd/WWW/nationalsecurity.nsf/Page/What_Governments_are_doing_Listing_of_Te
hh_Islamiyah (accessed September 5, 2013).
 33. Dru C. Gladney, “Islam in China,” The Oxford Encyclopedia of the Modern Islamic World, ed.
John L. Esposito (Oxford: Oxford University Press, 2007).
34. John L. Allen, “The Uphill Journey of Catholicism in China,” National Catholic Reporter 6, no.
48 (August 3, 2007), http://ncrcafe.org/node/1252 (accessed September 12, 2007).
35. http://www.chinadaily.com.cn/bizchina/2010-07/23/content_11042851.htm (accessed September
3, 2013).
36. Chris Buckley, “Crackdown on Bloggers Is Mounted by China,” New York Times, September 10,
2013, http://www.nytimes.com/2013/09/11/world/asia/china-cracks-down-on-online-opinion-
makers.html?pagewanted=all&_r=0 (accessed September 10, 2013).
37. Mary Kay Magistad, “How Weibo Is Changing China,” YaleGlobal Online, August 9, 2012,
http://yaleglobal.yale.edu/content/how-weibo-changing-china (accessed September 5, 2013).
38. Susan Shirk, China: Fragile Superpower (Oxford: Oxford University Press, 2007), 93.
39. Katzenstein and Shiraishi, Beyond Japan, 12.
40. Paul Mooney, “Internet Fans Flames of Chinese Nationalism,” YaleGlobal Online, April 4, 2005,
http://yaleglobal.yale.edu/display.article?id=5516 (accessed September 12, 2007).
41. Paul Mooney, “China’s ‘Big Mamas’ in a Quandary,” YaleGlobal Online, April 12, 2004,
yaleglobal.yale.edu/display.article?id=3676 (accessed September 12, 2007).
42. Shirk, China: Fragile Superpower, 103.
43. David Shambaugh, “Introduction: The Rise of China and Asia’s New Dynamics,” in Power Shift:
China and Asia’s New Dynamics, ed. David Shambaugh (Berkeley: University of California Press,
2005), 16.
44. Shambaugh, China Goes Global, 35.
45. Pavin Chachavalpongpun, “Global Warming Is Real and Has Consequences,” YaleGlobal Online,
http://yaleglobal.yale.edu/content/global-warming-real-has-consequences-part-ii (accessed September
5, 2013).
46. Mark Beeson, “Sovereignty under Siege: Globalization and the State in Southeast Asia,” Third
World Quarterly 24, no. 2 (2003): 357–74.
 Chapter Fifteen
Security Dynamics in Asia
RALPH A. COSSA

The more things change, the more they remain the same! This is perhaps a
counterintuitive way of describing the seemingly ever-changing security
dynamics in the Asia-Pacific region. In recent years, there has been a spate of
new community-building and multilateral cooperative efforts involving an
ever-widening circle of players and overlapping mechanisms. There have also
been real and perceived rises and declines in hard and soft power among the
region’s major actors, which have affected their respective roles.
For better or for worse, China is casting a larger shadow on the region—
causing some of its neighbors to increasingly “bandwagon” with it, even
while cautiously hedging against it. Japan, long an economic power, is now
becoming more multidimensional as it strives to be a more “normal” nation.
India has adopted a “Look East” policy and has been seeking a more active
role in the Asia-Pacific region consistent with its great power aspirations.
ASEAN—the ten-nation Association of Southeast Asian Nations—is
becoming more institutionalized as it expands its self-proclaimed role as the
“driving force” behind East Asia community building. Meanwhile, the
Korean Peninsula remains the focus of near-term concerns, even as we
ponder the long-term implications for regional security of Korean
reunification or the currently stable but always potentially contentious China-
Taiwan cross-strait situation.
At the end of the day, however, it is the old existing network of US
bilateral security alliances, supplemented by issue-specific “coalitions of the
willing,” that continues to underwrite security in the region. Even as China,
Japan, India, and possibly ASEAN all rise simultaneously, this chapter argues
that the role of the United States as the “outside balancer” is likely to
continue to be a critical element in regional security. The combination of
American soft and hard (including economic) power will continue to be a
primary determinant of how nations in Asia think and behave and align
themselves, even as other actors and mechanisms play an ever-increasing
role.
This chapter will address the changing geopolitical environment and how
it affects the role of the United States and its military alliances in Asia. It will
look at the security challenges and dilemmas that could affect the current
relative equilibrium that has allowed Asia as a whole to rise economically
and politically and will examine the phenomenon of East Asian regionalism
and community building as it relates to developing a post–post–Cold War (or
post-Iraq/Afghanistan) security architecture for the region.

THE GEOPOLITICAL CHALLENGE AND SECURITY

DILEMMAS

China is rising. Japan is rising. India is rising. Even ASEAN appears to be

carving out a more influential role for itself—not as a major power, but
because of its leading role in developing multilateral mechanisms for
political, economic, and security cooperation in the region. None of these
changes is, individually or collectively, either good or bad news per se. Each
phenomenon could potentially be stabilizing or destabilizing, depending on
how the various regional players adjust and successfully strive (or fail) to
maintain regional equilibrium. The rise with the greatest current and potential
long-term impact centers on China, which will draw the greatest level of
attention here, with no intention of demeaning or trivializing the others.

The Rise of China

Philip Saunders’s chapter in this volume chronicles China’s rise, while
Robert Sutter’s discusses some of the implications for the United States.
Sutter accurately describes Washington’s long-standing engagement strategy,
which seeks to reinforce the positive aspects of China’s rise while also
hedging against more negative outcomes. As discussed in David
Shambaugh’s introductory chapter, there are others who have long believed
that confrontation between Washington and Beijing is inevitable, that China’s
rise cannot be controlled and thus must be contained. There are some who
suspect (and periodically assert) that the Obama administration’s “rebalance”
or “pivot” toward Asia is in truth a containment strategy against China. They
are wrong! As the commander of the US Pacific Command Admiral Samuel
Locklear noted in answering such accusations, “We have a pretty good idea
how to implement a military containment strategy . . . and it would not look
like this.”1 The United States knows how to contain; it did so very effectively
against the Soviet Union. It did not do it by promoting and investing in
Moscow’s economic well-being. A containment policy does not include
welcoming the “enemy” into regional economic and security forums and
giving its adversary a prominent seat at the table.
During their historic “shirtsleeves summit” in Sunnylands, California, in
June 2013, US president Barack Obama and Chinese president Xi Jinping
both clearly rejected the idea that a “clash of civilizations” was inevitable. As
President Xi clearly noted,
President Obama and I both believe that in the age of economic globalization and facing the
objective need of countries sticking together in the face of difficulties, China and the United
States must find a new path—one that is different from the inevitable confrontation and conflict
between the major countries of the past. And that is to say the two sides must work together to
build a new model of major country relationship based on mutual respect and win-win
cooperation for the benefit of the Chinese and American peoples, and people elsewhere in the
world.2

As President Xi told Secretary of State John Kerry during Kerry’s visit to

China, “We should blaze a trail for a new type of relations between major
powers that features equality, mutual trust, tolerance, mutual learning,
cooperation and common prosperity.”3 While he did not fully spell out this
vision, he did note that a central component was “high-level strategic
communications,” such as the California summit. Xi stressed that “there is
enough space on both sides of the vast Pacific Ocean to accommodate China
and the United States.”4 The US “pivot” and China’s growing political,
economic, and military power do not need to put the two nations on a
collision course. The two presidents reinforced this important point during
their summit in stressing a common shared destiny. As President Obama
pointed out at their opening press conference, “There’s a strong recognition
on the part of both President Xi and myself that it is very much in our interest
to work together to meet the global challenges that we face.”5 Washington
and Beijing will not agree on every issue, and the United States will no doubt
continue to be candid in expressing human rights concerns and discussing
areas where the two differ. But disagreements should not prevent cooperation
on issues of mutual interest, because a pragmatic and effective relationship
between the United States and China is essential to address the major
challenges of the twenty-first century.
The desire to engage China and to welcome it as a “responsible stake-
holder”6 dates back to the Nixon administration and has been followed by
every US president since then. Is Washington hedging its bets? Is it
concerned that, efforts to engage and help in the development of China
notwithstanding, Beijing may decide to become more confrontational once it
becomes more powerful? Of course! But no blocs have been formed against
China as part of this “hedging” strategy. All the significant multilateral
organizations in East Asia today have China as a central member, and
America’s bilateral alliances in Asia are not directed against China, and they
are not likely to be focused in that direction unless Beijing takes actions that
directly threaten US national security interests.
US strategy toward a rising China seems based on the premise that China
can, and wants to, play a constructive role in the emerging new world order.
Ideological differences (especially as they pertain to individual freedoms),
territorial disputes between China and US allies (especially Japan and the
Philippines), and the potential for conflict over Taiwan (see below) raise the
possibility of conflict, as does a lack of clarity about how China itself sees its
future role in the region and in the world. Does China see itself as the
Germany of the first half of the twentieth century (which rose twice, each
time with unhappy results), or the Germany (or Japan) of the second half of
the twentieth century, which rose responsibly to become a full partner, with
considerable encouragement and assistance from the United States? A future
leadership, not yet known by us or by most Chinese, will likely make that
determination. US policies, like those of China’s neighbors, are aimed at
encouraging, if not guiding or influencing, the most positive outcome,
without being so naive as to recognize that, like confrontation, full
cooperation is also not inevitable.
Much has been written about China’s impressive military expansion and
modernization efforts.7 But the fact remains that, relative to the United States,
the People’s Liberation Army (PLA) is still several generations behind, and
the gap is not likely to close anytime soon. China’s military may be the
largest in Asia (or in the world, for that matter), but it is not the most capable.
That moniker must go to Japan, at least in terms of self-defense capabilities.8
Japan does not possess offensive weapons systems.9 So observers should
beware of the “Wizard of Oz effect”:10 while China may cast a large shadow,
given its impressive growth and volume, it is rather small (in terms of
capabilities, with no shortage of serious challenges) vis-à-vis the United
States or the European Union, much less the West in general, and its
economic challenges remain large.
The net result of China’s growing shadow has been an increased trend
among China’s neighbors to tread softly around China while also hedging
their bets by drawing themselves more closely to the United States. It is also
not coincidental that ASEAN’s growing interest in improving ties with India
coincided with China’s rise. Given China’s focus on “peaceful development”
through bilateral and regional cooperation,11 there is every reason to believe
that regional equilibrium can be maintained despite China’s rise, as long as
the United States remains engaged in Asia, and no reason to believe that the
United States will do otherwise given its growing economic, political, and
security interests.

Taiwan as a “Core Interest”

Some discussion is in order regarding the main (but not only) bone of
contention between the United States and China—namely Taiwan. Beijing
has a one-China principle, while Washington has a one-China policy. Therein
lies the difference. Beijing claims that “there is only one China in the world.
Both the mainland and Taiwan belong to one China. China’s sovereignty and
territorial integrity brook no division.”12 In Beijing’s eyes, Taiwan is the last
lingering battle of the Chinese civil war, a “renegade province.”
Reunification is the only option; peaceful reunification is much preferred, but
the use of force cannot be ruled out and may be necessary if “possibilities for
a peaceful reunification should be completely exhausted.”13 Washington does
not preclude eventual unification, if it is the will of the people on both sides
of the strait, but can foresee other alternatives as well. It has clearly
announced its opposition to unilateral changes to the status quo by either side
of the Taiwan Strait, even while being careful not to clearly define what
constitutes the status quo.14
Taiwan claims the status quo is that it is an independent, sovereign
country. China claims that it is not, but seems prepared to give Taiwan
“international breathing space” if Taiwan accepts the “One China” principle.
Prior to the presidential victory of the Democratic Progressive Party’s Chen
Shui-bian in 2000, both sides had agreed to “one China, different
interpretations.” This so-called 1992 Consensus allowed cross-strait dialogue
for a number of years but was totally unacceptable to the Chen government in
Taipei.15 With the return to power of the Nationalist Party (Kuomintang) in
2008, cross-strait (relative) harmony has returned.16 Even under Chen Shui-
bian, the one thing both sides had in common with each other and with the
United States is that no side wanted to see conflict across the strait. This
serves no party’s interests. As long as the leadership in Taiwan continues to
assure Beijing that it does not seek, and will not actively pursue, de jure
independence, as Taiwan president Ma Ying-jeou has consistently done since
assuming power, the prospects of conflict will remain low. Ma’s reelection in
2012 has allowed Washington and Beijing to keep this issue on the back
burner. Washington will likely continue its policy of ambiguity or dual
deterrence, aimed at persuading Taipei not to take steps that would be
construed by Beijing as crossing the independence “red line,” while putting
China on notice that the use of force could induce an American military
response.
One event that would dramatically change the geopolitical landscape in
East Asia would be full reunification between Taiwan and the People’s
Republic of China (PRC), including the emplacement of PLA bases and
forces on the island. While this is theoretically possible, few forecast that this
is possible in the near term—Chinese objectives are not aimed at near-term
reunification but at preventing “Taiwan authorities” from precluding this as
an eventual outcome—and fewer and fewer in Taiwan seem to think it
possible (or desirable) at all.
As regards US views, a senior American diplomat said it best off the
record: “Any China that Taiwan would willingly and peacefully join would
be a China that would not be seen as threatening to the United States.”17
Presumably, peaceful reunification requires Beijing’s full embrace of
democracy and ironclad assurances to the people of Taiwan regarding the
preservation of their liberty, culture, and values. This is not likely to happen
anytime soon.
Even if the Taiwan situation is peacefully resolved to everyone’s
satisfaction (and this does not necessarily or even most likely imply full
reunification), there would still be political tensions between Washington and
Beijing, brought about by different political systems and worldviews and the
necessary adjustments required for a rising power and established power to
peacefully coexist. But without the Taiwan question looming—without the
prospects (however remote) of military confrontation—the remaining
challenges become much more manageable.
Since the establishment of diplomatic relations, Washington has followed
a deliberate policy of engaging China and encouraging it to play a
constructive role in the world. While one cannot help but be distressed by
Beijing’s actions in defense of countries like Myanmar, Sudan, or Zimbabwe
in the name of “non-interference,” despite these differences, Sino-US
relations have been and will likely remain on a generally positive track
because both sides understand it is in their respective national interest to keep
it that way.

The Rise of Japan

Japan is coming of age, but not without considerable growing pains. It has
long been a major global economic power, but until recently it had
deliberately been a unidimensional power, forgoing offensive military
capabilities and limiting its international involvement in large part to support
of broader US activities. This may be changing. Japanese officials now
openly discuss the potential utility of power projection forces, although
Tokyo has not yet begun to pursue such weapons systems. More to the point,
Tokyo is becoming more geopolitically active (and proactive). Tokyo has for
years been aggressively seeking a permanent seat on the UN Security Council
(with Washington’s backing). It has put “boots on the ground” in Iraq, albeit
only after active warfare had concluded and in a non-combat role, and
previously provided non-combat maritime support (primarily refueling
services) to coalition forces working to further stabilize Afghanistan.18 The
JMSDF has also established an overseas support base in Djibouti to support
multilateral anti-piracy operations, an action which would have been
unthinkable a decade ago.
As new generations strive to finally put the past behind them, Japan is
poised to become a “normal” country, contributing to security dialogues and
peacekeeping operations. Unfortunately, the “history issue” keeps
complicating matters, and the actions of the Abe administration, especially
regarding visits to the Yasukuni Shrine and the so-called comfort women
issue, created considerable ill will between Japan and its East Asia neighbors,
especially the Koreas and China.19 Japan will never be able to move forward
if it keeps looking backward, trying to reinvent or reinterpret the past, rather
than stressing Japan’s outstanding contributions to peace, stability, and
prosperity over the past sixty years. While many remain suspicious of Abe, it
was he who began moving Sino-Japanese relations in the right direction in
2006 with his “ice-breaking” visit to China during his previous reign as prime
minister.
There is a serious misperception in Asia that Washington encourages or
somehow benefits from or enjoys seeing hostile relations between Tokyo and
Beijing. Nothing could be further from the truth. It is in Washington’s
interest to see Asia’s two primary powers cooperating toward common goals
of peace and prosperity. This complements Washington’s “positive
engagement” strategy and helps to create a Sino-Japanese economic
interdependence that raises both the cost of conflict and the prospects of
future cooperation.20

Korean Peninsula Challenges

While a still-divided Korea is not “rising” in the same sense as its neighbors,
few spots in Asia can have as important an impact on regional security
dynamics as the Korean Peninsula. North Korea has the fourth-largest
military in the world (behind China, the United States, and India and ahead of
Russia),21 and has demonstrated at least a rudimentary nuclear weapons
capability (while claiming much more).22 South Korean forces are somewhat
smaller but still rank sixth in the world and are deemed to be more capable
and ready.23 More importantly, they are complemented by roughly 28,000 US
forces under the world’s most integrated combined forces command.24
It would be foolhardy to try to describe the current dynamics associated
with the attempts by Washington and its Six-Party Talks interlocutors—
North and South Korea, China, Japan, and Russia—to bring about the Korean
Peninsula denuclearization that all agreed to in principle on September 19,
2005 (see chapter 12).25 The Six-Party process itself will be examined below
in addressing “ad hoc multilateralism.” It is important to note here, however,
that the December 2012 election of the incumbent Liberal Democratic Party
candidate Park Geun-hye as South Korea’s new president increases the
prospects of Washington and Seoul continuing to speak with one voice in
dealing with Pyongyang. If nothing else, this should help avoid some of the
tensions that existed between the two allies under more progressive Republic
of Korea (ROK) presidents (as was the case during the Roh Moo Hyun
administration), although Pyongyang’s ability to drive wedges between
Washington and Seoul (or between either and the other Six-Party
participants) should not be underestimated.26
Conventional wisdom is that Korea’s immediate neighbors, especially
Japan and China, are not eager to see Korean reunification, each for its own
specific reasons.27 Tokyo worries that a unified Korea might see Japan as its
“natural enemy.” Beijing worries that a unified Korea, under Seoul’s rule and
with the ROK–US security alliance still intact, would remove its current
buffer and could place a US ally (and potential future US military bases)
closer to its borders. If, however, the choice is between a reunified Korean
peninsula (under Seoul) or a divided peninsula with an increasingly
belligerent and nuclear weapons–equipped Democratic People’s Republic of
Korea (DPRK), the former may be seen as a far more attractive choice,
something that should give Pyongyang cause for pause.
As was the case between Tokyo and Beijing, tensions between Seoul and
Tokyo are likewise disconcerting to Washington. Both alliances—the US-
Japan alliance and the US-ROK alliance—suffer when the third leg of this
important triangle is weak. Conversely, when all three cooperate, the cause of
peace and stability is well served.
New leadership in Beijing, Tokyo, and Seoul contributes to the uncertainty
in the region. But, at the same time, it offers opportunities for new initiatives.
Time will tell if mutual suspicions harden or can be overcome.

The Rise of India

India lies outside East Asia, but its rise has implications for the region and it
has a role to play there. While India has the world’s third-largest military
force, complete with nuclear weapons and power projection forces,28 it is
neither seen, nor attempts to portray itself, as a military power in East Asia.
Its impact is more political and perhaps psychological; it is, after all, “the
world’s largest democracy” and rivals China both in size and in economic
potential (although more so in the former than in the latter).
On the plus side, we see India engaging with ASEAN and its other East
Asia colleagues through the ASEAN Regional Forum (ARF), the ASEAN
Defense Ministers Meeting Plus (ADMM+), and the East Asia Summit
(EAS). On the negative side, it has thus far chosen not to use its limited
influence over Myanmar (Burma) in a way that might promote political
reform in that beleaguered nation.29 New Delhi also seems determined to
have “strategic partnerships” with everyone.30
It is not too much of an exaggeration to observe that on Monday,
Wednesday, and Friday, India seems intent on cooperating with the United
States and on being part of an emerging alliance of democracies, promoting
multilateral cooperation (including defense cooperation) with Japan,
Australia, and the United States—while on Tuesday, Thursday, and Saturday,
New Delhi further enhances its strategic relations with Beijing and Moscow,
aimed at preventing a unipolar world. While others may dream of playing an
“India card” in the East Asia geopolitical game (recall that ASEAN brought
India in as a dialogue partner and ARF member largely as a counterweight to
China), New Delhi does not see itself as a “card” in anyone’s deck.
Nonetheless, a rising India must be factored into the geopolitical equation,
and its rise, along with Japan’s, gives context and perspective to China’s rise.

Does Russia Still Matter?

It would be wrong to totally ignore Russia in the Asian geopolitical equation.
As Russians are quick to remind the world, the two-headed eagle on the
Russian crest points east and west; Russia is an Asian as well as a European
power, even if its focus seems pointed more toward the Atlantic and its own
vulnerable south than East Asia in recent years. Nevertheless, Russia is a
member of the Six-Party Talks (there at Pyongyang’s request) and a
participant in many regional multilateral organizations, including the Asia-
Pacific Economic Cooperation (APEC) “gathering of economies,” the ARF,
ADMM+, and EAS. It also has the world’s fifth-largest military, even if its
Pacific-based forces are a shadow of their former selves.31
Russia has a long-standing “strategic partnership” with China and together
with Beijing helped form the Shanghai Cooperation Organization in 2001.32
The SCO, which brings Russia and China together with four Central Asian
states (Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan), is focused on
promoting confidence and cooperation among its members and neighbors—
Afghanistan, India, Iran, Mongolia, and Pakistan are observers; Belarus,
Turkey, and Sri Lanka are dialogue partners—while fighting “terrorism,
splittism, and extremism” in the region and globally.33 While the SCO held its
first military counter-terrorism exercise in 2007, it is more a political,
economic, and cultural than strictly security organization and should not be
seen as a military alliance in the sense of NATO or any other Western
definition of the term. In addition to promoting trade and development, the
SCO in recent years has additionally focused on “establishing a workable
system of joint struggle against drug trafficking.”34
The SCO also helps mask tensions between Moscow and Beijing over
what the Russians call their “near abroad,” the territory that had been an
integral part of the former Soviet Union and which Moscow would like to
remain in its immediate sphere of influence. The prospects of a twenty-first-
century “Great Game” between Beijing and Moscow for influence in Central
Asia, plus other historical avenues of mistrust and the fact that both Beijing
and Moscow value good relations with Washington at least as much as they
do with one another, provides limit to the utility of this strategic partnership.35

The Rise of ASEAN

The Association of Southeast Asian Nations was established in August 1967
to accelerate economic growth, social progress, and cultural development in
the region and to promote regional peace and stability in the wake of the US
withdrawal from Vietnam.36 In 2007, in marking its fortieth anniversary, it
established its first formal charter, making it a “legal entity” and bringing the
ten states more closely together.37 Even after forty-six years, however, it is
more a political and economic than security-oriented organization. In 2003
ASEAN established an ASEAN Community comprised of three pillars—an
ASEAN Security Community, an ASEAN Economic Community, and an
ASEAN Socio-Cultural Community—but after a decade, this is still in an
embryonic state.38
ASEAN’s real contribution to regional security is in its role as the self-
proclaimed driving force behind East Asia community-building efforts,
largely through ASEAN + 3 (APT, which links the ten ASEAN states with
China, Japan, and South Korea), and behind many of the region’s key
multilateral cooperative mechanisms, especially (in terms of regional
security) the ARF and ADMM+, which will be discussed in more detail
shortly.
 US STRATEGY AND MILITARY ALLIANCES

Having looked at changing dynamics within the region, we turn now to

America’s bilateral security alliances before discussing emerging regional
security arrangements. Robert Sutter’s chapter has already outlined the
specific alliances—with Australia, Japan, South Korea, the Philippines, and
Thailand—and discussed some of the specific challenges Washington faces
in sustaining these relationships. In this section, let us consider the role of
alliances and American security strategy in Asia more broadly.
During the George H. W. Bush and Clinton administrations, the Pentagon
produced a series of East Asia Strategy Reports outlining US security
strategy and the central role of Washington’s alliances in underpinning this
strategy. The George W. Bush and Obama administrations did not continue
this particular series of publications but continued to underscore that the
United States “is a Pacific nation, with extensive interests throughout East
and Southeast Asia.”39 The Bush administration’s National Security Strategy
further stated that “the region’s stability and prosperity depend on our
sustained engagement: maintaining robust partnerships supported by a
forward defense posture, supporting economic integration through expanded
trade and investment, and promoting democracy and human rights.”40
The Obama administration added additional emphasis with its so-called
pivot or rebalance toward Asia. This policy was most definitively spelled out
by then National Security Advisor Tom Donilon in a major address in
November 2012. Donilon noted that President Obama’s decision to travel to
Asia for the East Asia Summit so soon after his reelection “speaks to the
importance that he places on the region and its centrality to so many of our
national security interests and priorities.”41 Donilon pointed out that the
rebalancing toward Asia was the product of a strategic assessment of
America’s global presence and priorities. The administration’s approach was
“grounded in a simple proposition: the United States is a Pacific power
whose interests are inextricably linked with Asia’s economic, security and
political order. America’s success in the 21st century is tied to the success of
Asia.”42
Donilon identified both the overarching objective and the long-term vision
for Asia:
Our overarching objective is to sustain a stable security environment and a regional order rooted
in economic openness, peaceful resolution of disputes, democratic governance, and political
 freedom. This objective stems from our long-term vision of Asia. We aspire to see a region where
the rise of new powers occurs peacefully; where the freedom to access the sea, air, space, and
cyberspace empowers vibrant commerce; where multinational forums help promote shared
interests; and where citizens increasingly have the ability to influence their governments and
universal human rights are upheld. This is the future we seek, in partnership with allies and
friends.43

Donilon’s speech leaves no doubt that the region will continue to be a foreign
policy priority for the Obama administration and beyond.
The focus on Asia enjoys broad political support in America. In their
forward thinking and bipartisan prescription for American “smart power,”
former Bush administration deputy secretary of state Richard Armitage and
former Clinton administration assistant secretary of defense Joseph Nye
identify alliances, along with partnerships and multilateral institutions, as
“the foundation to address global challenges.”44 They described
Washington’s existing alliance network as a “force multiplier” and as one of
the best guarantees against “bandwagoning” against the United States.45
Regardless of which party is in power (and what catchphrase they use to
describe it), the US alliance network will continue to play a central role in
American Asian security strategy. Greater US involvement in, and support
for, regional multilateralism also appears in the cards.

EMERGING MULTILATERAL MECHANISMS AND

ASIAN COMMUNITY-BUILDING EFFORTS

This final section provides a brief review of selected key institutionalized and
ad hoc security-related multilateral mechanisms and how they impact
regional security dynamics.

The ARF: A Useful but Limited Forum

The twenty-six-member ASEAN Regional Forum (ARF) brings regional
foreign ministers together annually for security-oriented discussions.46
Various ARF study groups (called inter-sessional support groups, or ISGs)
have provided a vehicle to move multilateral security cooperation forward in
areas such as preventive diplomacy, enhanced confidence building, counter-
proliferation, and maritime (including search and rescue) cooperation, all of
which help promote greater transparency and military-to-military
cooperation. Since September 11, 2001, the ARF has helped focus regional
attention on, and has served as an important vehicle for practical cooperating
in, fighting terrorism and in countering the proliferation of weapons of mass
destruction (WMD).47
Generally speaking, the ARF seems well suited to serve as the
consolidating and validating instrument behind many security initiatives
proposed by governments and at non-official gatherings. It has become a
useful vehicle in countering terrorism and proliferation and, more recently, in
promoting greater international cooperation in the area of humanitarian
assistance and disaster relief (HADR). But its contribution to the regional
security order remains somewhat constrained. For example, Taiwan has not
been permitted to participate—and Beijing has insisted that “internal Chinese
affairs” not be on the agenda—effectively blocking ARF discussion of cross-
strait tensions despite their obvious broad regional implications. The Chinese
have even been reluctant to address conflicting claims in the South China Sea
at the ARF, insisting instead on separate talks with ASEAN or with the other
claimants on an individual basis.
Few expect the ARF to solve the region’s problems or even to move
rapidly or proactively to undertake that mission. The agreement to “move at a
pace comfortable to all participants”48 was aimed at tempering the desire of
more Western-oriented members for immediate results in favor of the
“evolutionary” approach preferred by the ASEAN states, which all too often
seems to see the process as being as (or more) important as its eventual
substantive products. The Asian preference for “non-interference in internal
affairs” also has traditionally placed some important topics essentially off
limits, although this may be changing (witness ASEAN’s increased
willingness to comment on Myanmar’s domestic politics). Nonetheless, the
evolution of the ARF from a confidence-building measures “talk shop” to a
true preventive diplomacy mechanism (as called for in its 1995 concept
paper) is proving to be a long and difficult one.49

ASEAN + 3 and the East Asia Summit

While Washington focuses on ad hoc initiatives and Asia-Pacific
regionalism, the states of Asia have continued their community-building
efforts. The primary vehicle for East Asia community building is the ASEAN
+ 3 grouping (APT). In December 2005, in an attempt to create a broader,
primarily economic linking, Malaysia convened the first East Asia Summit
(EAS)— involving ASEAN, its Plus 3 partners (China, Japan, and South
Korea), plus Australia, New Zealand, and India. Russian president Vladimir
Putin, in Kuala Lumpur for his first ASEAN-Russia dialogue, was also
invited to meet with, but not to officially join, the other sixteen assembled
leaders at the first annual EAS.50 While Russia was prepared to join then,
ASEAN decided to wait until the United States was also willing, which did
not happen until the Obama administration came into office. The United
States and Russia officially joined the EAS in 2009.
Still undefined eight years later is how the EAS (or the APT, for that
matter) will interact with broader regional organizations such as APEC, the
ARF, or ADMM+. To its credit, the chairman’s statement from the second
EAS “confirmed our view that the EAS complements other existing regional
mechanisms, including the ASEAN dialogue process, the ASEAN + 3
process, the ARF, and APEC in community building efforts.”51 Details as to
how these various efforts will mesh or work together are still lacking,
however.
How the EAS relates to the region’s other multilateral organizations and
initiatives—both institutionalized (like the ARF and APEC) and ad hoc (like
the Six-Party Talks and Proliferation Security Initiative)—will also be a key
factor affecting Washington’s attitude, as will its adoption of global norms,
especially in the areas of counter-terrorism, counter-proliferation, and non-
traditional security concerns such as HADR and environmental issues. Will
the EAS (or ADMM+) reinforce or dilute these efforts? Will it help regional
states more effectively address growing trans-national challenges, or will it
provide another excuse for avoiding such efforts? The answers to these
questions will help determine Washington’s attitude toward the EAS and any
subsequent East Asian community.

ADMM/ADMM + :
A Major Step Forward in Defense Cooperation
Established in 2006, the ASEAN Defense Ministers’ Meeting (ADMM) is
“the highest defense mechanism within ASEAN.” It “facilitates the ASEAN
defense ministers to discuss and exchange views on current defense and
security issues and challenges faced in the region.”52 The ADMM meets
annually. Perhaps the most remarkable thing about the ADMM is that it took
almost forty years after the creation of ASEAN for its defense ministers to
agree to meet regularly. Nonetheless, it has quickly become the premier
organization for defense cooperation in Southeast Asia. The ADMM has
adopted concept papers to advance cooperation on HADR and on non-
traditional security. More importantly from a US and regional defense
perspective, it also forms the core for the ADMM+, established in 2010 as “a
tool to engage ASEAN Dialogue Partners in dialogue and cooperation on
defense and security matters.”53
Then US Secretary of Defense Robert Gates attended the inaugural
ADMM+ meeting in Hanoi in October 2010. At that meeting, the ministers
agreed on five areas of practical cooperation: maritime security, counter-
terrorism, disaster management, peacekeeping operations, and military
medicine.54 Membership mirrors the East Asia Summit: the ten ASEAN
states; Plus Three partners South Korea, Japan, and China; plus Australia,
India, New Zealand, Russia, and the United States. The emphasis is on
practical cooperation.55 The first ADMM + HADR and military medicine
exercise was held in Brunei in June 2013. US Secretary of Defense Chuck
Hagel attended the second ADDM+ meeting in Brunei in August 2013,
where an ADMM+ Expert Working Group on Humanitarian Mine Action
was added to the existing five expert groups.56 The ASEAN defense ministers
also accepted Hagel’s offer to host a US-ASEAN Defense Ministers Meeting
in Honolulu in 2014. This will be the first time the ASEAN defense ministers
will meet as a group outside Southeast Asia and reflects the importance both
sides attach to improved US-ASEAN defense cooperation.57

Mixing Economics and Politics

This section would not be complete without at least a passing reference to
several economic institutions and initiatives that have security implications.

APEC: Security on the Margins

APEC is first and foremost a “gathering of regional economies”—it is not
referred to as a gathering of states or governments due to the presence in its
ranks of Hong Kong and Taiwan.58 While primarily aimed at managing the
effects of growing economic interdependence, APEC has had an important
political and security role as well, especially since the 1993 Seattle meeting
when then US president Bill Clinton invited the APEC heads of state and
government to the first of what have now become regular annual leaders’
meetings designed to elevate the importance of this economic gathering. The
leaders’ meetings have become an important vehicle for fostering political
relations in addition to raising the level of economic dialogue and putting
pressure on the region’s leaders (and especially the host state) to move the
process forward. Attempts to put security issues on the formal agenda have
been generally unsuccessful however, and with other vehicles like the ARF
and ADMM+ becoming more prominent, APEC’s security agenda continues
to fade.
Nevertheless, just bringing heads of state together has security
implications and provides opportunities for deeper cooperation. For example,
APEC 2001 provided an important venue for President Bush to explain
Washington’s war on terror to his Asian colleagues and to garner their
support. The 2001 APEC Leaders’ Statement on Counter-Terrorism was the
first political document to be issued by APEC and ultimately resulted in the
creation of an APEC Counter-Terrorism Task Force.59 This was considered a
real victory for President Bush and no doubt helped to increase APEC’s
relevance in Washington’s eyes.
The APEC Shanghai meeting also provided President Bush with his first
opportunity to meet directly with Chinese president Jiang Zemin, which
helped to end the downward slide in Sino-US relations after the collision
between a US reconnaissance plane and a Chinese jet fighter over the South
China Sea in April 2001.60 More recently, the Obama administration’s
“pivot” to Asia was first unveiled by Secretary of State Hillary Clinton along
the sidelines of the 2011 APEC meeting in Honolulu.61
The US-ASEAN annual summit, instituted by President Obama, also had
its genesis through APEC when President Bush met jointly with the seven
ASEAN members of APEC along the sidelines of the 2005 APEC Leaders’
Meeting. Both sides expressed a desire to make this a regular event, and
President Bush met with the “ASEAN Seven” again at the 2006 and 2007
APEC meetings, setting the stage for its institutionalization by President
Obama.62
Politics and security issues aside, APEC still is, first and foremost, aimed
at promoting free trade and economic cooperation. It will remain more suited
to talking about security problems than to actually helping to implement
solutions. In addition to the usual drawbacks associated with Asian
multilateralism, APEC has the added “problem” of including Taiwan. Rather
than using this venue as a vehicle for incorporating Taiwanese views and
concerns into the regional security debate in a quasi-non-governmental
setting, Beijing has tried to block any substantive security-oriented activities
and to further isolate Taiwan from the dialogue process.

TPP and RCEP

The most recent effort by the United States to broaden engagement with the
region (as part of the economic dimension of the rebalance) is the
TransPacific Partnership (TPP) free trade agreement, which the Obama
administration hopes will set a global gold standard for future trade deals.
The TPP now includes twelve countries—Australia, Brunei, Canada, Chile,
Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States,
and Vietnam—and accounts for about 40 percent of global wealth and a third
of world trade. TPP leaders’ summits will be conducted coincident with the
annual APEC Leaders’ Meeting.63 Its stated objective is set to conclude by
the end of 2013.
The “rival” Asia-Pacific trade negotiation is the ASEAN-driven Regional
Comprehensive Economic Partnership (RCEP). RCEP consists of the ten
ASEAN members, its Plus Three partners (China, Japan, and South Korea),
along with three free trade agreement partners (Australia, India, and New
Zealand). It includes more than 3 billion people, has a combined GDP of
about $17 trillion, and also accounts for about 40 percent of world trade. It is
currently set to conclude at the end of 2015.
The RCEP was launched in November 2012. In contrast to the TPP, the
RCEP explicitly acknowledges the role of “ASEAN centrality” in the
emerging regional economic architecture and notes that it will produce an
agreement that entails “broader and deeper engagement with significant
improvements over the existing ASEAN + 1 FTAs.”64 That isn’t quite a gold
standard, but it is progress nevertheless.
Many seem to believe that the TPP and RCEP are competing economic
models, promoting different versions of an Asian economic order: the TPP is
transpacific with the United States at its core, while the RCEP advances a
more Asian design, one that would put China at its center. Many also believe
that TPP was established as a counter to the China-centered Asian economic
model and represents an attempt to somehow contain China. US protests that
this is not true and that TPP is open to all who qualify and have interest often
fall on deaf ears. More to the point, TPP predates US involvement, and
several countries are in both groups. Nevertheless, the charge that TPP
represents some grand US design to maintain its regional preeminence and
choke off rivals persists.65

Ad Hoc Multilateralism
While Washington’s confidence in institutionalized multilateral mechanisms
is growing, when it wants to get things done, it has demonstrated a clear
preference for ad hoc or tailored multilateralism aimed at a specific task or
objective and comprised of a “coalition of the willing.” The multinational
force assembled for the war in Iraq provides one example, as does the global
Proliferation Security Initiative (PSI) or the regional Six-Party Talks.

Proliferation Security Initiative

The PSI was first launched in a speech by President George W. Bush in May
2003 and formalized at an eleven-nation meeting (involving Australia,
France, Germany, Italy, Japan, the Netherlands, Poland, Portugal, Spain, the
UK, and the United States) in Madrid a month later.66 It is “a global initiative
with global reach,” under which coalition members have agreed “to move
quickly on direct, practical measures to impede the trafficking in weapons of
mass destruction (WMD), missiles, and related items.”67 As such, it is clearly
task-oriented. It represents cooperation for a specific, clearly defined purpose,
as opposed to dialogue for dialogue’s sake or in support of more generic
objectives. In September 2003, in Paris, the eleven core participants agreed
on a Statement of Interdiction Principles “to establish a more coordinated and
effective basis through which to impede and stop [WMD] shipments . . .
consistent with national legal authorities and relevant international law and
frameworks, including the UN Security Council.”68 At the tenth anniversary
meeting of PSI participants in Poland in May 2013, it was noted that over one
hundred nations have now expressed support for these principles.69 When a
country endorses PSI, it commits to establish a more coordinated and
effective basis through which to impede and stop WMD, their delivery
systems, and related items.70
Other major Asia-Pacific participants beyond the initial PSI core group
include Canada, the Philippines, Russia, Singapore, and South Korea. Others,
like China, claim they support the PSI’s objectives but have refrained from
directly participating, in part due to North Korean objections.71 PSI
participants have conducted numerous air, ground, and (mostly) sea
interdiction exercises to develop and demonstrate their capability to prevent
illicit trafficking in nuclear weapons and fissile material. PSI participants are
hesitant to discuss actual interdiction operations, citing security reasons. Its
most widely acknowledged success was the interception of the BBC China en
route to Libya with a shipment of centrifuges, an action that reportedly
convinced Libyan leader Mu’ammar Gadhafi to come clean about his
clandestine nuclear weapons programs.72 While the PSI was a Bush
administration initiative, it has been firmly embraced by President Obama,
who called it “a core element of the international nonproliferation regime,”
and “a testament to what is possible when nations come together to confront a
shared challenge and move toward a safer, more peaceful world.”73

The Six-Party Talks

The best example of task-oriented ad hoc multilateral cooperation in
Northeast Asia is the Six-Party Talks, established by Washington to deal with
the specific issue of denuclearization of the Korean Peninsula. The talks were
also intended, and served, to multilateralize what many initially viewed as a
bilateral US-DPRK problem. This initiative draws from the lessons learned
during the 1993–94 North Korean nuclear crisis, where—despite close
coordination and consultation—Washington was widely perceived as
unilaterally cutting a deal with Pyongyang before sticking Seoul and Tokyo
with the bill. While Pyongyang argued for bilateral consultations (and a
separate USDPRK non-aggression pact), Washington rightfully insisted this
time that participation by Seoul and Tokyo was “essential.” It also
acknowledges the important role that China, and to a lesser extent Russia,
must play if multilateral security guarantees are to be part of the final solution
(as most would agree they are). Both the Bush and Obama administrations
have recognized and tried to work around Pyongyang’s strategy of playing all
sides against one another by presenting different, conflicting messages
depending on the audience.74 Having all participants in the same room and
holding Pyongyang to agreements already made and paid for is part of this
continuing denuclearization effort.
The creation of the Six-Party Talks mechanism provides a framework for
broader Northeast Asia multilateral cooperation in the future. If the talks
eventually succeed, most parties agree that a more formalized mechanism
must evolve in order to implement the agreement, provide necessary security
assurances, and monitor compliance, as well as facilitate whatever aid
packages are associated with the final accord. If the talks fail, some (this
author included) would argue that there will be an even greater need for some
form of institutionalized cooperation in order to manage the danger posed by
a nuclear weapons–equipped North Korea, if the other parties are prepared
for this level of cooperation. If and how the Six-Party mechanism transitions
into a more institutionalized Northeast Asia forum will help determine the
degree of future security cooperation in this Asian sub-region and
Washington’s involvement in it.

CONCLUSION

Regional security dynamics have been, are, and will likely continue to be in a
state of flux, brought about by the simultaneous rise of China and Japan
within East Asia and India along its periphery and by emerging security (and
economic-oriented) multilateral mechanisms that have at least a limited role
to play in promoting peace and security in the region. The United States
welcomes Japan’s and India’s rise and is supporting, while cautiously
observing, China’s reemergence in Asia and globally, hoping for and
counting on the best, even as it hedges against less favorable outcomes. It
also supports regional multilateral efforts such as the ARF, APEC, ADMM+,
and EAS, in which it actively participates, and has voiced no strong objection
to sub-regional gatherings such as the APT and RCEP which geographically
exclude the United States. It also supports, indeed often initiates, ad hoc
multilateral efforts aimed at dealing with specific challenges, such as the PSI
and Six-Party Talks, focused on countering the proliferation of weapons of
mass destruction.
These “coalitions of the willing” supplement the existing network of
American bilateral security alliances. Together, they help to ensure a
continued central role for the United States in preserving peace and stability
in Asia, even as other players and institutions rise to play a more meaningful
support role. Assuming that Washington continues to use its hard and soft
power smartly, the United States appears destined to continue to play a major
role in Asian security, even as it supports and urges the nations of the region
to contribute more, and more effectively, to their own security.

NOTES
1. Admiral Samuel J. Locklear III, Commander US Pacific Command, “A Shared Future for U.S.
China Security Relations” (speech to the National Committee for US China Relations, New York, May
21, 2013).
2. See “Remarks by President Obama and President Xi Jinping of the People’s Republic of China
after Bilateral Meeting,” Sunnylands Retreat, Rancho Mirage, California, White House Office of the
Press Secretary, June 7, 2013.
3. See “President Xi Jinping Meets with U.S. Secretary of State Kerry, Stressing China and the
United States Should Blaze a Trail for New-Type Major Country Relations Featuring Equality, Mutual
Trust, Tolerance, Mutual Learning, Cooperation and Common Prosperity,” Xinhua News Agency,
April 13, 2013.
4. Ibid.
5. See “Remarks by President Obama and President Xi Jinping of the People’s Republic of China
before Bilateral Meeting,” Sunnylands Retreat, Rancho Mirage, California, White House Office of the
Press Secretary, June 7, 2013.
6. As originally introduced by then Deputy Secretary of State Robert Zoellick in a speech on
“Whither China: From Membership to Responsibility” (to the National Committee on US-China
Relations, New York, September 21, 2005), http://www.ncuscr.org/articlesandspeeches/Zoellick.htm.
7. For a comprehensive breakdown of the People’s Liberation Army forces, see The Military
Balance 2013 (London: International Institute for Strategic Studies, 2013), 286–96. Additional details
on Chinese defense expenditures are provided on 255–56.
8. For details about the Japanese Self-Defense Forces, see IISS, The Military Balance 2013, 306–9.
9. The Japanese government under Prime Minister Abe has talked about developing offensive strike
capabilities in order to respond to North Korean missile threats, but this has thus far not materialized.
10. In the Wizard of Oz story, people tremble in fear at the image of the great wizard on the screen
until a look behind the screen reveals a short person casting a large image.
11. For the latest update on China relations with ASEAN and its actions in the South China Sea, see
Robert Sutter and Chin-Hao Huang, “China–Southeast Asia Relations: China’s Toughness on the South
China Sea—Year II,” Comparative Connections 15, no. 2 (September 2013), plus past and future
issues, http://csis.org/program/comparative-connections (accessed September 18, 2013).
12. As spelled out in Article 2 of China’s Anti-Secession Law, adopted at the Third Session of the
Tenth National People’s Congress on March 14, 2005, Xinhua News Agency, March 14, 2005,
http://www.china.org.cn/english/2005lh/122724.htm (accessed September 27, 2013).
13. Article 8, Anti-Secession Law.
14. For background and analysis of US policy vis-à-vis Taiwan, see Shirley A. Kan and Wayne M.
Morrison, “U.S.-Taiwan Relationship: Overview of Policy Issues,” Congressional Research Service
Report, January 4, 2013, http://www.hsdl.org/?view&did=728593 (accessed September 27, 2013).
15. A Chinese explanation of the “1992 Consensus” can be found at “Backgrounder: ‘1992
Consensus’ on ‘One-China’ Principle,” Xinhua News Agency, updated October 13, 2004, on the China
Daily website, http://www.chinadaily.com.cn/english/doc/2004-10/13/content_382076.htm (accessed
September 27, 2013).
16. For continuing coverage of cross-strait relations, see David G. Brown and Kevin Scott, “China-
Taiwan Relations: Bumps along the Road,” http://csis.org/files/publication/1302qchina_taiwan.pdf
(accessed September 27, 2013), and past and future issues of Comparative Connections.
17. The off-the-record comment was made by a senior State Department official at a Pacific Forum
CSIS-hosted workshop focused on cross-strait relations in 2005 but reflects a general attitude that the
United States is prepared to accept any formulation or agreement willingly accepted by both sides of
the strait.
18. The Afghanistan support operations were a point of contention with the reinvigorated opposition
Democratic Party of Japan, which managed to temporarily halt this refueling mission until overruled by
the ruling Liberal Democratic Party. For details, see, for example, Eric Talmadge, “Japan to Resume Its
Mission in Indian Ocean,” Washington Post, January 12, 2008.
19. For background on the tensions caused by Prime Minister Abe’s comments on history issues and
visits by his cabinet to the Yasukuni Shrine, see, for example, James J. Przystup, “Japan-China
Relations: Going Nowhere Slowly,” and David Kang and Jiun Bang, “Japan-Korea Relations: No Signs
of Improvement over the Summer,” Comparative Connections 15, no. 2 (September 2013),
http://csis.org/program/comparative-connections (accessed September 18, 2013).
20. For background information on the impact of the Sino-Japan rivalry on US national interests, see
“Sino-Japan Rivalry: A CNA, IDA, NDU/INSS, and Pacific Forum CSIS Project Report,” Issues and
Insights 7, no. 2 (March 2007), http://csis.org/publication/issues-insights-vol-07-no-02-march-2007
(accessed September 27, 2013).
21. IISS, The Military Balance 2013, 548–54, table 25.
22. See IISS, The Military Balance 2013, 309–12, for force dispositions, and 245 for a discussion of
the DPRK’s nuclear weapons test and suspected capabilities.
23. IISS, The Military Balance 2007, 359–61.
24. Http://www.usfk.mil/usfk/content.mission.of.the.rok.us.combined.forces.command.46 provides a
description of the Combined Forces Command (CFC) and the US military presence in and commitment
to the ROK. As the ROK’s military capabilities increase, the nature of the US-ROK command
relationship has been adjusted. Operational command of ROK forces in wartime is scheduled to shift
from the United States to the ROK in 2015, and the CFC will be replaced by a new joint command
structure. But the overall defense commitment, as outlined in the Mutual Security Treaty, remains firm
and credible.
25. “Joint Statement of the Fourth Round of the Six-Party Talks, Beijing, September 19, 2005,”
http://2001-2009.state.gov/r/pa/prs/ps/2005/53490.htm (accessed September 27, 2013).
26. Ralph A. Cossa and Brad Glosserman, “Regional Overview: Rebalance Continues Despite
Distractions,” and Aidan Foster-Carter, “North Korea–South Korea Relations: Second Chance for
Trustpolitik?,” Comparative Connections, September 2013, http://csis.org/program/comparative-
connections (accessed September 27, 2013), and past and future issues.
27. The same feelings were held about German reunification among its European neighbors, but that
appears to have had a happy ending.
28. IISS, The Military Balance 2013, 297–302.
29. Political reform has slowly and cautiously begun to evolve in Burma, but it has been driven by
other factors, including a realization from its leaders that its self-imposed isolation and overreliance on
China did not serve its national interests.
30. For an update on India’s relations with the nations of East Asia and the United States, see Satu
Limaye, “India–East Asia/US Relations: A Year of Notable Visits and Anniversaries,” Comparative
Connections 14, no. 3 (January 2013), http://csis.org/pro gram/comparative-connections (accessed
September 18, 2013).
 31. IISS, The Military Balance 2013, 225–36.
32. For regular updates on the Sino-Russian relationship, see Yu Bin, “China-Russia Relations:
Summer Heat and Sino-Russian Strategizing,” Comparative Connections 15, no. 2 (September 2013),
http://csis.org/program/comparative-connections (accessed September 18, 2013), and earlier and future
China-Russia Comparative Connections chapters.
33. For details, visit the SCO’s website, http://www.sectsco.org/EN123/(accessed September 16,
2013). The main goals of the SCO are strengthening mutual confidence and good-neighborly relations
among the member countries; promoting effective cooperation in politics, trade and economy, science
and technology, and culture, as well as education, energy, transportation, tourism, environmental
protection, and other fields; making joint efforts to maintain and ensure peace, security, and stability in
the region; and moving toward the establishment of a new, democratic, just, and rational political and
economic international order.
34. As taken from the report on the “Meeting of the Council of Ministers of Foreign Affairs of the
Member States of SCO,” July 13, 2013, http://www.sectsco.org/EN123/show.asp?id=440 (accessed
September 16, 2013).
35. For historic details on the “cracks in the facade” between China and Russia, see Charles E.
Ziegler, “Putin Comes to Shove in Asia,” Far Eastern Economic Review 171, no. 1 (January/February
2008): 20–24.
36. The five original member countries were Indonesia, Malaysia, the Philippines, Singapore, and
Thailand. Brunei Darussalam joined in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and
Cambodia in 1999. Details can be found on the ASEAN website: http://www.asean.org,
http://www.aseansec.org/home.htm (accessed September 18, 2013).
37. For contrasting views on the significance of the charter and on ASEAN’s progress to date, see
Ralph A. Cossa, “ASEAN Charter: One (Very) Small Step Forward,” PacNet, no. 48-07 (November
21, 2007), http://www.csis.org/media/csis/pubs/pac0748.pdf; and Tommy Koh, “ASEAN at 40:
Perception and Reality,” PacNet, no. 48A-07 (November 27, 2007),
http://www.csis.org/media/csis/pubs/pac0748a.pdf (accessed September 25, 2013).
38. For a detailed description of the three communities and their respective objectives and aspirations,
see http://www.aseansec.org/64.htm (accessed January 21, 2008).
39. 2006 National Security Strategy for the United States of America (NSS-2006) (Washington, DC:
White House, 2006), 39.
40. Ibid.
41. Tom Donilon, “President Obama’s Asia Policy and Upcoming Trip to the Region” (speech before
the Center for Strategic and International Studies, Washington, DC, November 15, 2012, transcript by
Federal News Service, Washington, DC),
http://csis.org/files/attachments/121511_Donilon_Statesmens…Forum_TS.pdf (accessed September 27,
2013).
42. Ibid.
43. Ibid.
44. Richard Armitage and Joseph Nye, CSIS Commission on Smart Power (Washington, DC: CSIS
Press, 2007), 27, http://csis.org/files/media/csis/pubs/071106_csissmartpowerreport.pdf (accessed
September 27, 2013). “Smart power,” as described in pages 6–7, is a skillful combination of American
hard power and soft power, the latter being a phrase coined by Nye to describe the attractiveness and
persuasive power of a nation’s values, culture, and ideals.
45. Armitage and Nye, CSIS Commission on Smart Power, 32.
46. Members include the ten ASEAN states plus Australia, Bangladesh, Canada, China, the European
Union, India, Japan, South and North Korea, Mongolia, Pakistan, Papua New Guinea, Russia, Sri
Lanka, Timor-Leste, New Zealand, and the United States.
47. See, for example, the “Statement by the Chairman of the ASEAN Regional Forum (ARF) on the
Terrorist Acts of the 11th September 2001, Bandar Seri Begawan, 4 October 2001,” the “ASEAN
Regional Forum Statement on Strengthening Transport Security against International Terrorism,” and
the “ASEAN Regional Forum Statement on Non-Proliferation,” issued during the July 2, 2004, Jakarta,
Indonesia, ARF meeting and available in the “Library” section of the ASEAN Regional Forum website,
http://aseanregionalforum.asean.org/library.html (accessed September 27, 2013). Such statements have
become regular attachments to ARF chairman statements and are frequently echoed at ASEAN
summits.
48. See “Chairman’s Statement: The First ASEAN Regional Forum, Bangkok, Thailand, July 25,
1994,” http://aseanregionalforum.asean.org/library/arf-chairmans-statements-and-reports/132.html
(accessed September 27, 2013).
49. For more background on the ARF, see “The ASEAN Regional Forum: A Concept Paper,”
Department of State, Bureau of Political-Military Affairs, Washington, DC, July 15, 2002, http://2001-
2009.state.gov/t/pm/rls/fs/12052.htm (accessed September 27, 2013). More current views can be found
in the “Department of State Fact Sheet: US Engagement in the 2013 ASEAN Regional Forum,” July 2,
2013, http://www.state.gov/r/pa/prs/ps/2013/07/211467.htm (accessed September 27, 2013), issued
after Secretary Kerry’s participation for the first time in an ARF ministerial meeting.
50. “Chairman’s Statement of the First East Asia Summit,” Kuala Lumpur, December 14, 2005,
http://www.asean.org/news/item/chairman-s-statement-of-the-first-east-asia-summit-kuala-lumpur-14-
december-2005-2 (accessed September 28, 2013).
51. The EAS was originally scheduled for December 2006 in Cebu but was postponed, ostensibly due
to an incoming typhoon, although there were also press reports about concerns of a terrorist attack
against the assembled leaders. The January 2007 meeting took place under heightened security.
52. For more details on the ADDM and ADMM+, see the ASEAN website:
http://www.asean.org/communities/asean-political-security-community/category/asean-defence-
ministers-meeting-admm (accessed September 16, 2013).
53. As described in the ADMM+ section on the ASEAN ADMM/ADMM web page:
http://www.asean.org/communities/asean-political-security-community/category/asean-defence-
ministers-meeting-admm (accessed September 16, 2013).
54. Ibid.
55. For a comprehensive analysis of the ADMM+, see “Strategic Engagement in the Asia Pacific:
The Future of the ASEAN Defense Ministers’ Meeting-Plus (ADMM-Plus),” RSIS Policy Report,
August 2013, http://www.rsis.edu.sg/publications/policy_report/Strategic-Engagement-in-the-Asia-
Pacific.pdf?utm_sourcegetresponse&utm_medium email&utm_campaign
rsis_publications&utm_content=RSIS+Policy+Report;plon+%22Strategic+Engagement+in+the+Asia+Pacific%3A+The
Plus+%28ADMM-Plus%29%22 (accessed September 19, 2013).
56. See “Chairman’s Statement of the Second ASEAN Defense Ministers’ Meeting Plus,” Bandar
Seri Begawan, Brunei Darussalam, August 29, 2013,
https://admm.asean.org/dmdocuments/2013_Aug_2nd%20ADMM-Plus…
BSB_29%20Aug%202013_Chair
man%27s%20Statement%20of%20the%20Second%20ASEAN%20Defence%20%20Ministers%27%20Meeting%20Plu
(accessed September 28, 2013).
57. For details on Secretary Hagel’s visits to both the Shangri-La Dialogue and ADMM+, see Ralph
A. Cossa and Brad Glosserman, “Regional Overview: Rebalance Continues Despite Distractions,”
Comparative Connections 15, no. 2 (September 2013),
http://csis.org/files/publication/1302qoverview.pdf (accessed September 20, 2013).
58. APEC started out as an informal dialogue group, growing from an original twelve members
(Australia, Brunei, Canada, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the
Philippines, Singapore, Thailand, and the United States) in 1989 to fifteen in 1991 (with the addition of
China, Hong Kong, and “Chinese Taipei”) to its current strength of twenty-one, with the addition of
Mexico and Papua New Guinea (1993); Chile (1994); and Peru, Russia, and Vietnam (1997).
Institutionalization began in February 1993, when the APEC Secretariat was established in Singapore.
For details on this organization, visit the APEC website: http://www.apec.org (accessed September 28,
2013).
59. “APEC Leaders’ Statement on Counter-Terrorism,” Ninth APEC Economic Leaders’ Meeting,
Shanghai, October 21, 2001, http://www.mofa.go.jp/policy/economy/apec/2001/leader.html (accessed
September 28, 2013); and “APEC Counter-Terrorism Task Force Terms of Reference,”
http://publications.apec.org/googlesearch.php?
cx=012092=251120059988616%3Atcuzscmwdta&cof=FORID%3A9&ie=UTF-
8&q=apec+leaders+statement+on+counter-
terrorism&sa=&siteurl=publications.apec.org%2F&ref=www.apec.org%2Fabout-us%2Fapec-
secretariat.aspx&ss=14741j10776089j43(accessed September 28, 2013).
60. The Sino-US interaction and cooperation can be seen in a press release made by President George
W. Bush and President Jiang Zemin, “U.S., China Stand against Terrorism,” Shanghai, October 19,
2001, http://georgewbush-whitehouse.archives.gov/news/releases/2001/10/20011019-4.html (accessed
September 28, 2013).
61. Hillary Rodham Clinton, “America’s Pacific Century,” November 10, 2011,
http://www.state.gov/secretary/rm/2011/11/176999.htm (accessed September 28, 2013).
62. The 2007 meeting was supposed to be the first full US-ASEAN summit, but President Bush
canceled his follow-on trip to Singapore for this meeting due to Iraq-related challenges, so the
“ASEAN 7”—less Cambodia, Laos, and Myanmar, who are not APEC members—took place along the
sidelines of the APEC meeting in Sydney instead (making what would otherwise have been seen as
another significant step forward in US-ASEAN relations appear as a consolation prize instead). This
allowed President Obama to claim credit for having held the first full US-ASEAN summit, even though
the Bush administration had done most of the legwork. For more details on this initiative, see the
“White House Fact Sheet on US-ASEAN Leaders Meeting,” November 19, 2012,
http://www.whitehouse.gov/the-press-office/2012/11/19/fact-sheet-us-asean-leaders-meeting (accessed
September 28, 2013).
63. For details on the TPP, see “Fact Sheet: The United States in the Trans-Pacific Partnership:
Increasing American Exports, Supporting American Jobs,” Office of the US Trade Representative, June
2012, http://www.ustr.gov/about-us/press-office/fact-sheets/2012/june/us-tpp-increasing-american-
exports-supporting-american-jobs (accessed September 28, 2013).
64. As outlined in “Regional Comprehensive Economic Partnership (RCEP) Joint Statement The
First Meeting of Trade Negotiating Committee,” May 10, 2013, http://www.asean.org/news/asean-
statement-communiques/item/regional-comprehensive-economic-partnership-rcep-joint-statement-the-
first-meeting-of-trade-negotiating-committee (accessed September 28, 2013).
65. See, for example, Mark Thomson, “Trade Partnership Competition: TPP vs RCEP,” Strategist
(Australian Strategic Policy Institute blog), April 16, 2013, http://www.aspistrategist.org.au/trade-
partnership-competition-tpp-vs-rcep (accessed September 28, 2013). This debate is also covered by
Cossa and Glosserman in the September 2013 Comparative Connections “Regional Overview,”
http://csis.org/files/publication/1302qoverview.pdf (accessed September 28, 2013).
66. “Remarks by President Bush to the People of Poland,” Wawel Royal Castle, Krakow, May 31,
2003. The first PSI meeting was held on June 12, 2003, in Madrid, Spain, with representatives from all
eleven core participants in attendance.
67. As described in the “Chairman’s Statement, Proliferation Security Initiative Second Meeting,”
Brisbane, Australia, July 9–10, 2003.
68. For more information on PSI, refer to the Department of State website:
http://www.state.gov/t/isn/c10390.htm. The PSI’s “Statement of Interdiction Principles” can be found
at http://www.state.gov/t/isn/c27726.htm (accessed September 16, 2013).
69. See “Proliferation Security Initiative 10th Anniversary High-Level Political Meeting,”
Department of State website: http://www.state.gov/t/isn/c10390.htm (accessed September 16, 2013).
70. Ibid.
 71. For historical background data on the PSI and East Asian attitudes toward this initiative, see
“Countering the Spread of Weapons of Mass Destruction: The Role of the Proliferation Security
Initiative (A Review of the Work of the Council for Security Cooperation in the Asia Pacific
International Working Group on Confidence and Security Building Measures),” Pacific Forum CSIS,
Issues and Insights 4, no. 5 (July 2004).
72. For details, see Andrew C. Winner, “The Proliferation Security Initiative: The New Face of
Interdiction,” Washington Quarterly 28, no. 2 (Spring 2005): 137.
73. Letter from President Barack Obama commemorating the tenth anniversary of the Proliferation
Security Initiative (PSI), May 15, 2013, http://www.state.gov/documents/organization/210348.pdf (last
accessed September 16, 2013).
74. For background information on the Six-Party Talks process, see Scott Snyder, Ralph A. Cossa,
and Brad Glosserman, “The Six-Party Talks: Developing a Roadmap for Future Progress,” Issues and
Insights 5, no. 8 (August 2005), available on the Pacific Forum CSIS website:
http://www.csis.org/media/csis/pubs/issuesinsights_v05n08.pdf (accessed September 28, 2007). Read
the “Regional Overview” and various Korea-related chapters of Comparative Connections,
http://csis.org/program/comparative-connections (accessed September 18, 2013), for regular updates on
the progress (or lack thereof) of the talks.
 Part Seven
CONCLUSION
 Chapter Sixteen
Looking Ahead
A New Asian Order?
MICHAEL YAHUDA

As the preceding chapters have shown, the previous order in Asia is in the
process of complex change. The order that emerged after the end of the Cold
War and the disintegration of the Soviet Union, which was centered on
American predominance, is under profound challenge—in part because of the
problems of accommodating the rise of China and in part because of the
perceived relative decline of the United States. By “order” I mean a situation
in which there is broad agreement among the players (mainly states) about
the basis for conduct among them. The agreement may be the product of a
variety of sources: one state exercising hegemony, a balance of power, a
concert of powers, or a security regime. It also requires, at a minimum, that
there should be agreement about the norms of coexistence between the
different states.1 The United States may still be the primary power, but the
use of that power is increasingly circumscribed—partly by the rise of China,
partly owing to the uncertainties of politics within and among the Asian
states, partly by the distraction caused by US commitments in the Middle
East and in the more general “war against terror,” and partly by the American
capacity to overcome its domestic economic and political constraints in order
to implement the difficult policies of engaging China while simultaneously
hedging against its rise. However, as pointed out by Robert Sutter’s chapter
in this volume, no other great power (not even China) is able to replace the
US in its role as the generator of Asian strategic stability or as the provider of
economic public goods (which have facilitated the remarkable economic
growth of the Asian economies).
 The post–Cold War order is also being challenged by other developments,
including the rise of other powers, the impact of globalization, the
significance of complex economic interdependencies, the salience of non-
traditional security issues, and the important roles played by non-state actors.
Nevertheless, the most important driver of change to the established order has
been and will continue to be the rise of Chinese economic and political
power.
Not all these developments are confined to Asia. More broadly, the
character of international society itself is changing. The processes of
globalization (as described so well in Nayan Chanda’s chapter), which have
made the economies of the region and their ties with the larger world
increasingly interdependent, have made non-traditional security issues more
salient as they threaten the cohesion of societies. These include international
crime networks, terrorism, money laundering, piracy, pandemics, and the
effects of climate change. Non-state actors are also playing more prominent
roles.
However, in looking ahead, I shall focus on the Asian dimension of these
challenges. In order to peer into the future of Asian international relations, I
first sketch out the main characteristics of the current order. Unfortunately,
none of the main theories of international relations by itself can successfully
identify and explain the interactions between the various developments and
characteristics of the current situation in Asia. Therefore I follow an eclectic
approach to examine relations among the great powers, the significance of the
lesser powers, and finally the uncertainties of domestic politics. I conclude by
exploring possible developments in the near- to medium-term future.

ASIA IN TRANSITION

The international relations of Asia are in a period of rapid and profound

transition. The United States may still be the predominant power that
provides the public goods that have facilitated the rapid economic growth of
most of the Asian states (which has dramatically increased their weight in
international affairs), but in part because of that, American predominance is
being challenged by the rise of other major powers in the region. The
question of America’s relative decline is much debated in Asia and in the
United States itself. In particular, the evolving relations between China and
the United States are raising new questions among Washington’s allies and
friends. As the chapter by Hugh White points out, Australia would prefer to
see the United States adopt a “more modest role” that would not require
Australia to automatically side with the United States against China.
Meanwhile, nationalistic China has used its enhanced naval power in pursuit
of its long-standing territorial claims in the East and South China seas, which
has led to confrontations with Japan and some of the ASEAN states. At the
same time, relations among the Asian great powers—China, Japan, and India
—are developing their own autonomous dynamics as they simultaneously
compete and cooperate with each other. The pattern that emerges from such a
situation approximates what many Chinese scholars used to depict as “one
superpower, many powers” (yi chao, duo qiang). But now as a result of
China’s rapid rise, Asian analysts tend to see greater equality between China
and the United States. Even China’s new leader, Xi Jinping, has called for a
“new model of great power relations,” primarily between China and the
United States.
A further feature of the new emerging Asian order is the significance of
smaller and medium powers, both individually and as part of sub-regional
groupings. The South Korean economy has gone global, and as a self-defined
“middle power” its government is seeking links with other such powers
within and beyond Asia. As the chapter by Martha Brill Olcott on Central
Asia illustrates, it is not only the regional great powers China and Russia that
take initiatives which shape and determine the development and evolution of
this sub-region, but lesser powers such as Kazakhstan can do so as well. In a
different way, as Sheldon Simon’s chapter illustrates, the states of Southeast
Asia have played a significant part in shaping the conduct of international
relations of their sub-region and perhaps of Asia as a whole. Through
ASEAN they have determined the distinctive mode of the operations of the
regional institutions. Its norms of procedure by consensus and
noninterference have not only facilitated China’s participation in regional
multilateral institutions but have formed the basis for the operations of all the
other regional institutions. Moreover, in the absence of trust between the
regional major powers, the lesser powers and ASEAN have filled the void to
address many regional problems.
Finally, it is important to consider the uncertainties caused by the
unpredictable character of the domestic politics in most Asian states. Few
governments can assume the durability of their political systems. The effects
of rapid economic growth and the impact of globalization, which may be
welcomed for their economic benefits, are also potentially destabilizing. Just
as elsewhere in the world, domestic and international developments interact
with each other in new and uncomfortable ways. As the chapter on Japan by
Michael Green demonstrates, even such a highly developed state is still
grappling with problems of asserting an independent identity as it continues
to undergo a process of modernization whose genesis goes back to early
encounters with an imperialistic West. This is still true of most—if not all—
Asian states. Even in the more durable American system, differences about
the role of government have led at times to political gridlock in Washington,
which has had a negative impact on the American capacity to exercise the
kind of leadership in Asia to which its government aspires.

RELATIONS AMONG THE GREAT POWERS

American Primacy
Major-power relations in Asia revolve around the United States, China,
Japan, India, and occasionally Russia (and sometimes Europe as a fifth
power). It is true that the United States has been weakened by its wars in Iraq
and Afghanistan and by the decline in its prestige, but as Robert Sutter has
argued in his chapter, the United States remains “the most important power in
the [Asian] region,” and there is no other power or organization in the region
that is “remotely able, much less willing,” to provide the security guarantee
and economic public goods that underpin what Sutter calls “US leadership in
the region.” The United States also has the advantage of being the only major
power that does not have territorial disputes with others in the region.
Attempts to establish some kind of counterbalance to American primacy
have failed to materialize—at least to date. Russia and China, with or without
India, have—from time to time—suggested that they may work together to
counter what they regard as American “hegemony.” This has been most
visible in the UN Security Council, where China and Russia have combined
to thwart many of Washington’s endeavors. In Asia this has applied mainly to
weakening proposed resolutions to sanction North Korea. But the
effectiveness of their opposition to the United States is limited because the
importance of the ties to America for both Russia and China far exceeds the
significance of their bilateral relations.
 Nevertheless, American primacy is constrained by the growing political
significance of China’s economic ties with the countries of the region and by
its growing capacity to project military power. Even as the United States has
taken steps to upgrade its alliances and to strengthen its military relations
with strategic partners in the region, it is finding that its relations with its
regional allies are becoming more complex and conditional. For example, the
United States could not necessarily rely on the support of its allies in the
event of a confrontation with China. As the chapters in this volume on Korea,
Japan, and Australia all indicate, America’s allies do not want to be placed in
a position where they have to “choose” between the United States and China.
Yet the United States remains the “indispensable” power, in both soft and
hard power. The tsunami disasters of 2005 and 2011 and the Philippines
typhoon of 2013, demonstrated that America alone had the necessary
maritime resources to provide needed assistance to the affected countries. In
terms of hard power, it is American military power and diplomacy that
ensures that the incipient conflicts of this region do not break out into
military clashes. For example, it is the American alliance with Japan that
assures Japan against possible military conflict with China on the one hand,
while on the other hand simultaneously reassuring China against the prospect
that Japan may once again become an independent military power able to
threaten China. Likewise it is the “insurance” provided by American naval
power that has facilitated the engagement of China by Southeast Asian states;
as a consequence they are less fearful of being embraced too tightly by
Beijing.
None of the major Asian powers is openly challenging the United States—
not even China. Since the late 1990s China’s diplomacy has deliberately
sought to avoid open confrontations with the United States. Even when China
began to demonstrate its superior naval power to its maritime neighbors and
more general regional “assertiveness” in 2009–10, Beijing drew back
somewhat when faced with American “rebalancing” in 2011.
There nonetheless exists, however, the perception in Asia that America is
in decline and that its prestige and influence have waned. This perception is
empirically difficult to assess. There have been many previous occasions
when this has been said of American power in Asia—only to witness a
reaffirmation of continuing American predominance. For example, the
American withdrawal from Vietnam in 1975, and the challenge of Japan in
the late 1980s until 1991, were both (incorrectly) seen at the time as
heralding an American regional decline. This does not mean, however, that
America may not be in relative decline. Clearly the experience of the George
W. Bush administration showed the limits of American power worldwide and
of its need to pursue a policy of multilateralism rather than unilateralism.
Further, there is no question that the continuing rapid growth of the Asian
economies, especially that of China and to a lesser extent India, is changing
the balance of economic power in the region. It goes beyond the question of
the relative size of respective GNPs, because it affects economic relationships
and how governments calculate their respective national interests. We have
already seen this in the case of Australia, but the fact that China’s trade with
each of America’s major allies and partners in Northeast Asia (Japan, South
Korea, and Taiwan) began to exceed the value of their trade with the United
States in the early years of the twenty-first century is not without its political
consequences, especially as the trade deficits continue to increase.
American primacy rests on several pillars, among others: the dynamism of
its society and cultural influence (soft power), its scientific inventiveness and
technological resourcefulness, its universities, the prowess of its economy,
and the superior capabilities of its military. Hence the question of US decline
cannot be measured by simple projections of current economic trends.
Despite these enduring American strengths, there remains the question of
whether American military force can prevail in local conflicts in Asia where
the costs of victory may be too high—such as with North Korea—or where it
may face insurgencies (as in Afghanistan), or where the commitment of
protagonists in pursuit of what they regard as core interests may be more
intense than that of the United States and where proximity may favor the
adversary. Taiwan, for example, might be such a case.
American predominance therefore must rest on more than raw economic
and military power. It requires astute diplomacy that seeks to encourage
others (China especially) that it is in their interests to play by the rules of the
existing order that has served them so well. America can play the role of what
has been called the “offshore balancer.” But this requires Washington to pay
heed to the interests and concerns of others—both great and small—even as it
seeks to manage relations with them.

Relations among the Great Asian Powers

The major Asian powers—China, Japan, India, and Russia—have not
combined to balance the power of the United States (as Realist theory
suggests) for at least three reasons. First, they separately need America more
than they need each other and cannot risk alienating Washington. Second,
they distrust each other too much to put their faith in a strategic collaboration
of this magnitude. And third, they have all benefited from the current order.
Putin’s Russia may be considered a partial exception as it is less dependent
on access to the American economy and because it sees the United States as
its main antagonist in its attempted resurgence. Thus Russia has been
unhappy with America’s active encouragement of the former Soviet republics
(Russia’s “near abroad”) to democratize and deepen links with the West. That
is perhaps why Russia has been more visibly active in seeking to persuade
China and India to join it in resisting “hegemonism” (i.e., the United States).
As David Shambaugh’s introductory chapter notes, in practice the
relationships between the major powers may be characterized as a mixture of
cooperation and competition. This is particularly true of China’s relationships
with Japan and India and to a lesser extent with Russia. China is seen as the
main rising power that is increasing its political influence alongside its
growing economic interactions and the rapid modernization of its armed
forces. Ostensibly, other Asian states, both large and small, welcome their
deepening relations with China—but, as noted elsewhere in this volume,
some also seek to hedge against it.
The key relationship is between China and Japan, the two greatest powers
of East Asia. For the first time, the two may be said to be roughly equal
independent great powers at the same time. Neither has experience of
managing such a situation. Following the Western armed intrusion into Asia
in the nineteenth century and the Meiji Restoration of 1868, Japan saw itself
as superior to China—first in military terms until its defeat in 1945, and then
in economic terms from the 1960s to the early 1990s. But the bursting of the
economic bubble in 1991, followed by ten years of economic stagnation,
undermined Japan’s economic model and its claim to provide economic
leadership to the rest of Asia. At the same time, China was rising amid an
explosion of anti-Japanese sentiment at home, boosted by official
encouragement of a patriotism that made much of Japanese atrocities during
the 1937–45 Pacific War. Since one of the main pillars supporting the
legitimacy of the Chinese Communist Party is a nationalism that has been
systematically promoted by China’s leaders, it is difficult to see how the
widespread deep antagonism toward Japan can be modified, let alone set
aside.
As a result of its military modernization, China’s naval ships began to
press against Japanese territorial waters at the beginning of the twenty-first
century and went on to physically challenge Japanese administration of the
Senkaku/Diaoyu Islands. It was against this background that Japanese leaders
in the 1990s began to claim that their country should adopt a more assertive
or “normal” international role, epitomized by the desire to have a permanent
seat on the UN Security Council, which was formally proposed in 2005. No
country opposed the Japanese aspiration more than China. For its part, Japan
has expressed misgivings about the growth of the Chinese military and its
relative lack of transparency. Neither country appears to have considered or
taken into account what might be the legitimate national security interests of
the other. They are currently engaged in a dangerous confrontation between
their respective Coast Guard ships near the unoccupied Senkaku/Diaoyu
Islands. Yet, at the same time, they are economically interdependent—
involving complex chains of production and distribution—as China has
become Japan’s leading trade partner and Japan the leading foreign investor
in China.
The two appear to be facing a “security dilemma” as each raises objections
to the other’s attempts to modernize its military. Not only do they criticize
each other’s military spending, but they also raise objections to the other
side’s deployments of advanced weaponry. China objects to Japan’s
development of theater missile defense systems on the grounds that these
could degrade its strategic deterrent, while Japan is critical of China’s missile
deployments against Taiwan on the grounds that some of these could hit parts
of Japan. Underlying Beijing’s concern is that, in the event of hostilities,
Japan could block much of China’s access to the Pacific Ocean (as most of
the relevant international straits pass through Japanese islands), while Japan
is concerned by the prospect of its maritime trade lifelines coming under
threat.
The competition between the two is evident in their diplomacy in the
region. Japan resisted Chinese attempts in 2005 to restrict a proposed East
Asia Summit and putative community to the ASEAN Ten plus the three
Northeast Asian states of China, South Korea, and Japan, where it was
thought Chinese influence might prevail. Instead Tokyo proposed that
Australia, New Zealand, and India should also participate. In the end, the
Japanese initiative, openly supported by Singapore, was accepted. Japan has
also established a triangular defense relationship with Australia and the
United States, and it has proposed a political partnership with the
democracies of Australia, India, and the United States—both of which
exclude China and are suspected by Beijing as being aimed against it. The
two also compete for economic influence in Southeast Asia.
The United States, which maintains good working relations with both
China and Japan, is in effect the guarantor of strategic stability in the
competition between the two major powers of the region. Neither can be said
to be fully confident in the role of the United States. As the chapter by
Michael Green points out, Japan fears both abandonment and entrapment in
that it worries that Washington could place greater emphasis upon reaching
an understanding with China (its main challenger) about the management of
security affairs in the Asia-Pacific, thereby abandoning Japan, or
alternatively, the United States could be engaged in conflict with China and
trap Japan in a deteriorating relationship with its neighbor that was not in its
interest. For its part, China is afraid that the US alliance with Japan may not
act as a constraint on the latter but rather may lead to a strengthening of Japan
so that the two can better contain China. In the absence of the development of
a deeper strategic understanding and trust between China and Japan, it falls to
the United States to manage this delicate relationship.
India’s size, culture (as one of the formative civilizations in world
history), and fierce tradition of pursuing an independent foreign policy all
indicate that it is highly unlikely to join in a coalition designed to contain
China. Despite continuing concerns about relations with China and a degree
of rivalry with China within Asia (such as over influence in Myanmar), or for
access to energy resources elsewhere in the world, India has been careful to
avoid being seen to gang up on China. New Delhi’s newfound relationship
with the United States may be crucial for India’s continued resurgence as an
economic, political, and military power, but there is little sign of an Indian
willingness to be seen as a partner in American strategic hedging against
China. By the same token, India has turned down Russian attempts to direct
their trilateral relationship with China into a vehicle against American
“hegemony.”
At the same time, India and China have been engaged in confidence-
building measures between their militaries in disputed border areas and are
carrying out relatively small joint military maneuvers (such as sea rescues
and anti-terror exercises). Although they do not compare in scope or military
significance to those conducted with the United States, these exercises with
China are significant if only for symbolizing the intent to develop amicable
relations. Moreover, Sino-Indian trade has picked up from a low level of $2
billion in 2000 to nearly $73 billion in 2012 with a joint target to reach $100
billion by 2015—making China India’s largest trade partner.
It is one thing, however, to improve bilateral relations, and it is quite
another to agree on how to accommodate their respective great power
aspirations. China has refused to support India’s aspiration to a permanent
seat in the UN Security Council, and it has publicly expressed reservations
about Indian interest in acquiring ballistic missile defense systems and about
the civil nuclear agreement between India and the United States. For its part,
India may be regarded as engaging in competitive relations with China in
Southeast Asia, while its newly developing relations with Japan and the
United States also have the effect of limiting China’s ability to emerge as the
dominant power in Asia.

The Role of Lesser Powers

The distrust between the major powers and their attempts to hedge against
each other have paradoxically both circumscribed and enlarged the space
within which the small and middle-sized powers operate.
The leadership role assigned to ASEAN among the main regional
associations arises less from the inherent qualities of ASEAN itself than from
the failure of the major powers to agree among themselves how to handle the
regional leadership issue. Clearly it stretches credulity to accept that ASEAN
states, separately or collectively, could exercise effective leadership over the
major powers in the ASEAN Regional Forum (ARF, which includes all the
great powers) or even the ASEAN + 3 format (which includes China, Japan,
and South Korea). Yet ASEAN has set the terms for the way in which the
regional associations conduct their affairs. As pointed out in the chapters of
both Amitav Acharya and Sheldon Simon, the ASEAN modus operandi (the
“ASEAN Way”) has set the norms, ideas, and even an identity that in
Constructivist terms are giving a particular character to international relations
in Asia. It has provided the forum, for example, for the expansion of China’s
diplomacy in Asia and for the operation of the Shanghai Cooperation
Organization, which China was instrumental in establishing.
The ASEAN framework provided the forum through the ARF for the
induction of China into multilateralism in Asia. Rather than following their
traditional diplomacy of bilateralism in dealing with neighbors, where
Chinese superiority could be used to advantage and where opportunities
could be found to exploit differences between them, the Chinese found it to
their advantage from 1995 onward to deal with the ASEAN countries on a
multilateral basis. This was extended to negotiations on several aspects of
issues concerning the South China Sea, although the Chinese have continued
to argue that territorial disputes should be dealt with on a bilateral basis.
China was the first external power to sign up to ASEAN’s Treaty of Amity
and Cooperation (TAC), which formally sets out the terms of conduct for
relations in Southeast Asia. Within the framework of ASEAN’s approach,
China has thus developed initiatives in multilateral regional diplomacy.
Asian multilateralism—which puts so much stress on process rather than
reaching binding agreements—as distinct from Western international
institutions, has only recently gained a favorable response in the United
States. For example, during the George W. Bush administration there was a
tendency to dismiss these regional associations as little more than “talk
shops.” The Obama administration, however, took the Asian institutions, and
ASEAN in particular, more seriously—seeing them as a meaningful way of
enhancing American influence in the region. The ASEAN states have
welcomed the growth of American interest in large part as a balance against a
resurgent China that has been seeking to enforce its territorial claims in the
South China Sea by use of its superior military power.
In Northeast Asia, as the chapter by Scott Snyder makes clear, the nuclear
crisis with North Korea, and especially the prospects for its resolution, have
brought to the fore new security dilemmas for all six of the parties. My
concern is less to explore further the security problems of the sub-region than
to draw attention to the relative freedom of maneuver the lesser powers have
been able to develop in this context.
The conflicts of interest between the major powers, especially between
Japan and China, but also involving the United States and to a lesser extent
Russia, have contributed to allowing space for both North and South Korea to
follow their own interests to a certain extent. In view of the threat to regime
survival posed by continued confrontation or by exposing the country to the
international economy or indeed by a full opening to the South, despite its
evident weaknesses the North has so far been able to exploit the divisions
within and between the other main parties to the talks to buy time and exploit
its bargaining position. The South, which should be regarded perhaps as a
medium rather than a minor power, has developed an independent approach
to the problem by seeking reconciliation with the North through economic
engagement, often to the chagrin of its key ally the United States. Moreover,
now that its economy has acquired a global reach, South Korea is seeking to
forge relations with other medium powers beyond the confines of its region.
Similarly, as the chapter by Martha Brill Olcott on Central Asia shows, the
competition between China and Russia has allowed Kazakhstan to assert a
leading role in the sub-region, as perhaps befits the largest country with the
most successful economy. As elsewhere in Asia, a driving source of change
has been the rapid expansion of Chinese economic penetration, making China
a more important partner than the EU and Russia. Although the Shanghai
Cooperation Organization may suffer from some of the same defects as
ASEAN as a programmatic organization, it too has been able to assert an
independent identity of a kind. Despite the distrust between its members, in
the words of Olcott, “The SCO does play an important role as a forum for
permitting the states of the region to discuss shared problems and possible
solutions to them.”
In sum, the different security objectives and the competition between the
major Asian powers has allowed space for the lesser powers in the region to
hedge against the major powers and to pursue independent policies,
sometimes to the annoyance of the great powers. The distrust between the
major powers has also enabled the lesser powers in Southeast Asia and to a
certain extent in Central Asia to develop their own regional collective
identities that in turn have shaped the conduct of the great powers.

THE UNCERTAINTIES ARISING FROM DOMESTIC

POLITICS

Any consideration of regional order in Asia must take account of the

domestic as well as the international bases of the evolving regional order.
Asia, unlike Europe, is characterized by many divisions between the
character of the political systems of states and the qualities of governance, as
well as by the well-known ones of geographical size, religion, levels of
economic development, ethnicity, values, and so forth. The Asian states are
also relatively recent creations, or even in the case of old ones (such as China
and Japan), have totally new political systems which were established in the
late 1940s or early 1950s. None of them take independent statehood for
granted, and few if any can be said to have stable political systems. Their
senses of vulnerability derive from these essentially domestic concerns. Most
Asian governments pursue rapid economic growth and economic
development not only for economic and social reasons, but also to strengthen
domestic political stability and hence the security of the state as they see it.
The end of the Cold War and the growing significance of globalization
have brought about a paradoxical result with regard to interactions between
the domestic and the international. On the one hand, the process of
globalization has led to extending the reach of international influences further
than ever before into the domestic economies, societies, and politics of states.
At the same time, in the absence of an overarching international axis of
conflict—as between the former Soviet Union and the United States—the
conduct of domestic politics has been more detached from international
politics.
The domestic politics of Asian states are no longer constrained as much by
the external choices that were incumbent upon them as a result of the Cold
War. In some cases, the end of the Cold War had profound effects on their
domestic political systems. In Japan, for example, the end of what was called
the “San Francisco System” brought about fundamental change in its politics.
Moreover, domestic divisions and political conflicts no longer automatically
attract the attentions of competing superpowers, with the attendant risk of
intervention. Intervention may still take place, because of perceived threats of
terrorism and the proliferation of weapons of mass destruction (WMD), or on
humanitarian grounds. But unlike the Cold War period, intervention no
longer takes place to alter or to uphold a balance of power between
competing superpowers and their respective systems and ideologies.
Nevertheless, changes and uncertainties in domestic politics can have
important consequences for the international domain. Eight changes of prime
ministers in Japan from 2006 to 2012 had an impact on Tokyo’s relations
with China and the United States. Similarly, electoral changes in South Korea
and Taiwan, which were largely determined by domestic issues, have had
important repercussions in shaping the conduct of the major powers involved
in managing the potential conflicts in their sub-regions. The changes of
leadership in the great powers, China and America, have likewise had
important consequences, especially as their political systems have come
under stress. In Beijing concerns about the durability of Communist Party
rule are never far below the surface, and in Washington the slow economic
recovery amid political gridlock is limiting the government’s capacity to
exercise the kind of leadership it seeks to exercise in Asia, as elsewhere.
Consider also the role of nationalism. One of the ways of consolidating
statehood and mending social divisions is by encouraging nationalist
sentiments. Rapid economic growth necessarily leads to rapid social change
and the breakdown of traditional communities, which in turn provides a
social basis for enhancing what one of the keenest observers of Asian
nationalism, Benedict Anderson, has called “imagined communities.” This
nationalism builds on the remnants of anti-colonial or anti-Western
nationalism to develop a new nationalism to meet contemporary needs.
Although in some parts of Asia nationalist sentiments continue to be
targeted against the United States, a good deal is targeted at Asian neighbors.
The nationalism of American allies often incorporates a degree of resentment
against perceived limits on their independence and their cultural identity.
This has been true of South Korea, Japan, the Philippines, and even Australia,
despite the continuation of basic support for maintaining the respective
alliances. South Korean nationalism is directed at Japan and China too,
especially after the latter claimed in 2005 that the ancient kingdom of
Koguryo had historically been a part of China, as opposed to the Koreans of
both North and South who had long seen it as one of the founders of Korea.
Chinese nationalism took on more of an anti-Japanese character in the 1980s
and 1990s, and it has made the maritime territorial disputes between China
and Japan more intractable. As the chapter by Sheldon Simon demonstrates,
many of the Southeast Asian states not only distrust each other, but their
nationalism is often directed at each other as well. Nationalist sentiments also
make it more difficult to manage the burgeoning security dilemmas discussed
in Scott Snyder’s chapter on Northeast Asian stability. This is particularly
true of Sino-Japanese relations, but also between South Korea and Japan.
Nationalism also accentuates the difficulties in reconciling the aspirations
of each of the Asian major powers to play greater roles in international and
regional affairs. Although domestic politics may be influenced by external
sources, they necessarily reflect their own social and political divisions, and
their dynamics are largely self-generated. But because of the greater
interconnectedness of our globalizing world, domestic political developments
often impact on international politics in unforeseen ways, creating new
sources of uncertainty.

TOWARD A NEW ORDER IN ASIA

From an economic point of view, Asia is increasingly regarded as the most

important region in the world. Indeed it is widely thought to be the next most
important focal point of the world economy that may soon replace the United
States as the main engine of global economic growth. The Asian economies,
as the chapter by Edward Lincoln points out, are far from integrated, yet the
regional production chains have made them economically interdependent.
The extent to which Asia may act as a collective entity in the international
economy will depend very much on politics rather than economics.
Politically, Asia is not as coherent a region as Europe. It is not
characterized by common values, common institutions, or a willingness to
pool sovereignty. On the contrary, the Asian states—old and new alike—seek
to protect their sovereignty and enhance their independence. They are highly
diverse, and—unlike Europe—they do not share a history of interactions
prior to the modern era. The Asian states do not trust each other, most have
territorial disputes with their neighbors, and most are engaged in building up
their respective military forces. Yet since the end of the Cold War, Asian
states have established new regional institutions aimed at building mutual
confidence, enhancing cooperation, and working toward the establishment of
an Asian identity.
The attempt to create an Asian identity is entirely a modern enterprise.
The very concept of Asia as a geographical or cultural entity is European in
origin. Asia, in the shape of Persia, was seen by the ancient Greeks as
autocratic in contrast to democratic Europe as epitomized by Greece. Some
2,000 years later Karl Marx also differentiated between what he called the
“Asiatic mode of production,” as distinguished from European “feudalism.”
It was only in the late nineteenth century that nationalists, first in India and
Japan, began to speak of Asia as a coherent political entity in the struggle for
independence and equality. As Samuel Kim points out in his chapter, the first
attempt to create a self-conscious Asian regional system was the “East Asian
Co-Prosperity Sphere” scheme promoted by imperial Japan from the late
1930s to its defeat in 1945.
The cohesiveness of Asia and its various sub-divisions had yet to develop.
The concept of Southeast Asia as a regional or sub-regional entity was, in
fact, the product of Anglo-American division of territorial responsibilities
during the Pacific War. The first major attempt by newly independent Asian
states to establish a separate alignment between the two Cold War blocs came
at the Bandung Conference in 1955. Significantly, it was not confined to Asia
but included Africa as well. In any event, such solidarity as was manifested in
Bandung was soon shattered by open warfare between Asian states. It was
not until the end of the Cold War that a new Asian consciousness could be
said to have emerged.
The Western influence on contemporary Asia still runs very deep. As
David Shambaugh notes in his chapter, international relations in Asia have
arisen in large part out of complex processes of modernization introduced by
the West. The very concept of statehood as denoting territorial integrity based
on internationally recognized borders, with sovereign equality between states,
now so tenaciously rooted in the region, is wholly derived from Europe.
Further, Asian international relations have been and continue to be very
much a part of the global international system. Asia too was subject to the
bipolar division of the Cold War. In the nearly two decades since its end,
international relations in the region are still shaped to a considerable extent
by the only truly global power—the United States. That is still true for the
economic sphere as well. As the chapters by Robert Sutter and Edward
Lincoln demonstrate, even as far as economic performance is concerned,
where arguably China alone is beginning to challenge the United States, the
American market, American investment, and American technology transfers
still play crucial roles in the development of the Asian economies, including
that of China. Moreover, it is America that continues to provide the public
goods that underpin the Asian trade and security patterns. It is not possible,
therefore, to identify an Asian regional order that is geographically exclusive.
Nevertheless, the United States is less dominant than it once was, and not
only in the economic sphere. It faces difficult challenges in Asia, and not just
because of the distraction arising from the consequences of the long, drawn-
out wars in Iraq and Afghanistan, coupled with upheavals associated with the
so-called Arab Spring in the Middle East. Newfound problems have emerged
in the handling of “hot spots” such as Taiwan and North Korea, not least
because of differences with allies. More broadly, the United States is
challenged by how best to manage the rise of China and the different patterns
of cooperation and competition between the Asian great powers. Meanwhile,
Asian states have been developing regional patterns of international relations
in Southeast and Central Asia largely independently of the United States.
Clearly there is no settled pattern of order in Asia. All the major powers
are in processes of transition as they continue to grow and develop their
economies and as they seek to play more prominent roles in international
affairs. In the coming years much will depend on how successfully India, and
especially China, can manage the stresses and strains of the changes brought
about by rapid economic growth, and whether they can carry out necessary
political reforms to meet the needs of an increasingly complex economy and
society. The need for domestic structural reforms, and uncertainties about
how best to assert a more active international and regional role, are evident in
Japan.
Although both India and Japan are seeking to enhance their international
roles and Russia is trying to recapture something of the international and
regional stature of the former Soviet Union, it is the rise of China that is
contributing most to the dynamics of change in Asia and beyond. China’s
process of rapid economic growth began earlier than that of India, and its
impact on the Asian and international economy far exceeds that of India.
Combined with deft diplomacy, China’s political weight has increased, and
unless something drastic should occur, that influence is bound to continue to
increase. China has also been rapidly modernizing its military forces, which
is beginning to trouble its neighbors and is seen as a potential challenge to
America’s ability to deter China from using force to realize its claim to
Taiwan. Further, if China’s other maritime territorial claims (whatever their
intrinsic merits) were to be realized, China in effect would challenge the
existing distribution of power in the region. China would emerge as the
dominant power in Northeast Asia, and by virtue of its control of the Spratly
Islands it would reach down into the heart of Southeast Asia, transforming
the South China Sea into something of a Chinese lake.
However, successive Chinese leaders have given their main priority to
tackling pressing domestic issues. To this end, they have largely pursued
foreign policies designed to promote a peaceful international environment
within their own neighborhood. China’s leaders found out from the pursuit of
their more aggressive posture in 2009–10, which severely aggravated
relations with several of its neighbors, that they all now look to the United
States for support. China’s new leaders have responded with a dual-track
approach of seeking to cultivate better relations with the United States in
accordance with President Xi Jinping’s advocacy of a “model of great power
relations” and of cultivating relations with ASEAN countries through offers
of greater trade and massive investment in infrastructure.
A resurgence of Chinese nationalism, sparked perhaps by social disorder
or by a sudden change in the favorable international economic environment
and/or perceived hostile policies by other powers, especially the United
States, could transform China’s relatively benign foreign policies into
something more hostile and intransigent, as appeared to happen in the years
2009 and 2010. However, China’s new leaders recognize that the economic
model based on exports and massive investment in infrastructure has run its
course and major reform has become necessary if the economy is to move up
the technological ladder. The rate of economic growth may slow down from
the double-digit percentage of growth of the previous two or three decades.
That could lead to two very different foreign policy approaches by China: On
the one hand, China could become more accommodating in order to facilitate
the difficult transition to a new model of economic development. On the
other hand, should the transition bring about significant social disturbances,
China’s leaders could call for national unity by emphasizing nationalism and
adopting more confrontational policies toward its neighbors and the outside
world. Despite the uncertainty, Asian states recognize that they have no
alternative but to live with a China that is rising in both economic and
military terms and hope to benefit from the former and to hedge against the
latter. The hedging takes two forms: first, to socialize China by integrating it
into the norms and processes of Asian international relations as epitomized
by the various regional multilateral groupings, and second, by relying on the
countervailing power of the United States.
In the final analysis, the current order in Asia still depends on American
power and Washington’s willingness to continue to provide the public goods
that have facilitated the rise of the Asian economies. However, America’s
relative economic strength is declining in the region and perhaps in the world
as a whole. As China continues to rise, the United States finds that it
simultaneously needs to work with China to address a range of vital issues of
both regional and international significance while also needing to hedge
against it in cooperation with other Asian states. In this situation, Asian states
seek to maintain and develop good relations with both the United States and
China and do not want to be placed in a situation where they have to
“choose” between them.
 The development of the New Asian order in the immediate future—say
until 2020—is likely to continue to be a transitional one with marked
continuities with the present. Domestic politics throughout the region will
remain an additional source of uncertainty, though. Assuming that nothing
drastic happens to derail the Chinese juggernaut, China’s influence in Asia
will continue to grow along present lines, balanced to a certain extent by
India and Japan with whom it will continue to both cooperate and compete.
At the same time, the United States will continue to be the “indispensable”
country even though its primacy will be challenged by the rise of China.
Meanwhile, it will fall to the United States to manage the regional major
power triangle involving itself, China, and Japan.

Pathways to the Future

Two scenarios suggest themselves as the likely basis for a new Asian order in
the immediate future. The first is the continuation of the current order with all
its stresses and strains, basically moderated by American primacy. The
second would be the beginnings of a multipolar system, with China and the
United States recognized as the major powers, but others including India,
Japan, and perhaps South Korea also being involved. Each of the great
powers would have its own attributes as they competed with each other.
The first scenario of continuing American primacy would be based on its
massive regional military superiority (despite its commitments elsewhere in
the world). But primacy would also require an economic recovery by the
United States from low growth with huge foreign indebtedness amid large
budgetary and trade deficits and a weak currency. An economic recovery
would be needed not so much in order to compete with the Chinese economy,
but rather to reestablish confidence in its capacity to provide leadership. If
current economic trends should continue, the impression of American
economic decline would be strengthened to the point where doubts would
intensify about the American capacity to provide effective leadership.
Although America might still be the ultimate guarantor of security and of the
sea lanes of communication, confidence in its capacity and willingness to
continue to play the role of the regional policeman would erode. At issue
would be less the reality of relative economic decline (however that might be
measured) and more the perception of it.
The first scenario would also call for deft American management of the
rise of China and of the competitive relations between the regional powers. If
Washington is to provide leadership, it will also have to pay more attention to
the concerns of regional states and to involve itself more in regional
multilateralism. Otherwise the United States will be seen to be marginalizing
itself. The United States should also seek to provide active leadership to
address the many dimensions of non-traditional security, using its maritime
capacities and advanced technologies for the general good as it did during the
tsunami disasters of 2005 and 2011.
The second scenario of emerging multipolarity would follow from a
deepening of America’s relative economic decline and a failure to provide
leadership of the kind suggested above. America’s allies and friends would
draw closer to Beijing, and China’s influence in the region would grow.
China’s economic development and military capabilities would still be
largely insufficient to allow it to supplant the United States as the provider of
security and public goods in the region, so that America would remain the
most powerful of the major powers, but it would lose the primacy or evident
preeminence that it currently enjoys. Instead, the United States would become
the most powerful of a handful of major powers, each with its own
particularities, strengths, and weaknesses. At issue would be whether the
United States, China, Japan, India, and Russia could establish a concert of
powers, perhaps along the relatively loose lines of cooperative security of the
ASEAN Regional Forum. The alternative would be a shifting—and perhaps
dangerous—series of coalitions in attempts to establish a balance of power.
The main determinant of the evolution of Asian international relations in
the immediate future (up to 2020) will be the relative strength and endurance
of the United States. China can be expected to continue to rise and to increase
its influence, but the key question will be how the United States will respond
and how the other Asian states will appraise that response.

NOTE
1. For further discussion of the evolving Asian order, see Evelyn Goh, The Struggle for Order:
Hegemony, Hierarchy, and Transition in Post–Cold War East Asia (Oxford: Oxford University Press,
2013).
 About the Contributors

David Shambaugh is professor of political science and international affairs

and founding director of the China Policy Program in the Elliott School of
International Affairs at The George Washington University. He is also a non-
resident senior fellow in the Foreign Policy Studies Program at The
Brookings Institution, and a consultant to the US government and a number
of corporations and NGOs. He previously served as editor of The China
Quarterly, reader in Chinese politics at the University of London School of
Oriental and African Studies (SOAS), and (acting) director of the Asia
Program at the Woodrow Wilson International Center for Scholars. He serves
on the editorial boards of numerous scholarly journals and is a member of the
International Institute for Strategic Studies, the National Committee on US-
China Relations (board of directors), the Council on Foreign Relations, the
Pacific Council on International Policy, and the Asia Society. He has
published widely on Chinese domestic and foreign affairs, as well as the
international relations of Asia. His recent books include China Goes Global:
The Partial Power (2013); Tangled Titans: The United States and China (ed.,
2012); Charting China’s Future: Domestic and International Challenges
(ed., 2011); China Watching: Perspectives from Europe, Japan and the
United States (co-ed., 2011); China’s Communist Party: Atrophy and
Adaptation (2008); China-Europe Relations: Perceptions, Policies and
Prospects (coed., 2008); Power Shift: China and Asia’s New Dynamics (ed.,
2005); and The Odyssey of China’s Imperial Art Treasures (co-author 2005).

Michael Yahuda is professor emeritus in international relations at the

London School of Economics and Political Science, University of London,
where he taught from 1973 to 2003. He is currently a visiting scholar and
adjunct professor of international affairs at the Sigur Center for Asian Studies
of the Elliott School of International Affairs at The George Washington
University. He has been a fellow at the Woodrow Wilson International
Center for Scholars, the Fairbank Center for East Asian Research at Harvard,
the National University of Singapore Institute of Southeast Asian Studies,
Australian National University, the University of Adelaide, and the
University of Michigan. He has been an adviser to the British Foreign and
Commonwealth Office and a consultant to non-governmental organizations.
His main fields of interest are China’s foreign relations and the international
politics of the Asia-Pacific. He has published seven books and more than two
hundred articles and book chapters. His textbook The International Politics of
the Asia-Pacific since 1945 is now in its third edition, and his latest book is
Sino-Japanese Relations after the Cold War: Two Tigers Sharing a Mountain
(2013).

Amitav Acharya is professor of international relations and the UNESCO

Chair in Transnational Challenges and Governance at the School of
International Service, American University, Washington, D.C. His books
include Whose Ideas Matter? (2009); The Making of Southeast Asia (2013);
and Constructing a Security Community in Southeast Asia: ASEAN and the
Problem of Regional Order (2001, 2009, 2014). Professor Acharya is
president-elect of the International Studies Association (ISA), assuming the
presidency during 2014–15, and the joint series editor of the “Studies in
Asian Security” series published by Stanford University Press. He has
published articles in many leading journals in international relations and area
studies, including International Organization, International Security,
International Studies Quarterly, Journal of Asian Studies, Journal of Peace
Research, and World Politics.

Sebastian Bersick is associate professor at the School of International

Relations and Public Affairs (SIRPA) at Fudan University, Shanghai, where
he heads the Centre for China-EU Relations (CCER). He is also associate
fellow at the German Council on Foreign Relations (DGAP) in the China and
Asia-Pacific Program. Before joining Fudan University he lectured and
worked at the National University of Ireland in Cork, the German Institute for
International and Security Affairs (SWP) in Berlin, and the European
Institute for Asian Studies (EIAS) in Brussels, where he was head of the
Research Unit on EU-Asia Inter-Regionalism and New Regionalism in Asia.
His latest publications include East Asia’s Role in the New Global Economic
Governance (ed., 2013); Asia in the Eyes of Europe: Images of a Rising
Giant (ed., 2012); and ASEAN, EAS, APEC: Regional Cooperation in Asia-
Pacific (in German, 2012). His books on Asia-Europe relations include
Towards a New World Order? On the Politics of Interregional Relations; the
Example of the ASEM Process (in German, 2004), for which he received the
Ernst Reuter Prize for outstanding doctoral dissertation at the Free University
in Berlin.

Nayan Chanda is editor-in-chief of YaleGlobal Online. He was formerly

associated with the Hong Kong–based Far Eastern Economic Review, as its
reporter, diplomatic correspondent, and editor. Since 2003 he has been a non-
resident senior fellow of The Brookings Institution and a member of the
Advisory Council for The Brookings Center for East Asian Policy Studies.
He is a member of the editorial boards of Global Asia and New Global
Studies Journal, writes a regular column on globalization in BusinessWorld,
and is the recipient of the 2005 Shorenstein Award for Journalism, presented
jointly by the Walter H. Shorenstein Forum for Asia Pacific Studies at
Stanford University and the Shorenstein Center on the Press, Politics and
Public Policy at Harvard University. He is the author of Brother Enemy: The
War after the War (1986) and co-author of over a dozen books on Asian
politics, security, and foreign policy. His most recent book, Bound Together:
How Traders, Preachers, Adventurers, and Warriors Shaped Globalization
(2007), has been translated into Korean, Chinese, Japanese, and Italian. He is
coeditor (with Strobe Talbott) of The Age of Terror: America and the World
after September 11 (2002) and co-editor (with Bruce Mazlish and Kenneth
Weisbrode) of The Paradox of a Global USA (2007).

Ralph A. Cossa is president of the Pacific Forum CSIS in Honolulu, a

nonprofit foreign policy research institute affiliated with the Center for
Strategic and International Studies (CSIS) in Washington, D.C. He is senior
editor of the forum’s quarterly electronic journal, Comparative Connections.
Mr. Cossa is a member of the ASEAN Regional Forum (ARF) Experts and
Eminent Persons Group, a founding member of the Steering Committee of
the Council for Security Cooperation in the Asia Pacific (CSCAP), co-chair
of the CSCAP study group aimed at halting the proliferation of weapons of
mass destruction in the Asia-Pacific region, and executive director of the US
Member Committee (USCSCAP). He also sits on the board of the Council on
US-Korean Security Studies and is a member of the National Committee on
US-China Relations and the International Institute for Strategic Studies. He is
a frequent contributor to regional newspapers, including the Japan Times,
Korea Times, and International Herald Tribune. His most recent book is An
East Asian Community and the United States (ed. with Akihiko Tanaka,
2007).

Michael J. Green is associate professor of international relations at the

Edmund A. Walsh School of Foreign Service at Georgetown University and
senior vice president and Japan Chair at the Center for Strategic and
International Studies in Washington, D.C. He served as special assistant to
the president for national security affairs and as senior director for Asian
affairs on the National Security Council staff during the administration of
George W. Bush, and before that as a fellow at the Council on Foreign
Relations and a faculty member at the Johns Hopkins University School of
Advanced International Studies. His previous publications on Japan include
Japan’s Reluctant Realism (2000) and Arming Japan (1995), in addition to
numerous journal articles in Foreign Affairs, the National Interest, and other
periodicals.

Samuel S. Kim is senior research scholar at Columbia University’s Weather-

head East Asian Institute. He previously taught at the College of Foreign
Affairs (Beijing, China), Princeton University, and Columbia University. He
is the author or editor of twenty-two books on East Asian international
relations, Chinese and Korean foreign relations, and world order studies—
including China, the United Nations, and World Order (1979); The War
System: An Interdisciplinary Approach (co-ed., 1980); The Quest for a Just
World Order (1984); China and the World (ed., 1984, 1989, 1994, 1998);
North Korean Foreign Relations in the Post–Cold War Era (ed., 1998);
Korea’s Globalization (ed., 2000); East Asia and Globalization (ed., 2000);
Korea’s Democratization (ed., 2003); The International Relations of
Northeast Asia (ed., 2004); and The Two Koreas and the Great Powers
(2006). He has published more than 160 articles in edited volumes and
leading international relations journals, including the American Journal of
International Law, China Quarterly, International Organization, Journal of
Chinese Law, Journal of East Asian Studies, Journal of Peace Research,
World Policy Journal, and World Politics.

Edward J. Lincoln is an adjunct professor at Columbia University, where he

teaches a course on the Japanese economy. In addition, he is a professorial
lecturer at The George Washington University’s Elliott School of
International Affairs, where he teaches a course on the East Asian economies.
From 2006 to 2011, he was director of the Center for Japan-US Business and
Economic Studies and professor of economics at the Stern School of
Business, New York University. Prior to NYU, Professor Lincoln was a
senior fellow at the Council on Foreign Relations, and earlier a senior fellow
in the Foreign Policy Studies Program at The Brookings Institution. In the
mid-1990s he served as special economic adviser to Ambassador Walter
Mondale at the American Embassy in Tokyo. His latest book, on the
underappreciated importance of economic issues in international relations and
American foreign policy, is Winners without Losers: Why Americans Should
Care More about Global Economic Policy (2007). He is the author of eight
other books and monographs, including East Asian Economic Regionalism
(2004), Arthritic Japan: The Slow Pace of Economic Reform (2001), and
Troubled Times: U.S.-Japan Trade Relations in the 1990s (1998). He has
also published numerous articles and op-ed pieces on Japan, US-Japan
economic relations, and broader East Asian economic issues.

Martha Brill Olcott is a senior associate with the Russia and Eurasia
Program at the Carnegie Endowment for International Peace in Washington,
D.C. She specializes in the problems of transitions in Central Asia and the
Caucasus, as well as the security challenges in the Caspian region more
generally. She has followed interethnic relations in Russia and the states of
the former Soviet Union for more than twenty-five years and has traveled
extensively in these countries and in South Asia. In addition to her work in
Washington, Olcott co-directs the Carnegie Moscow Center Program on
Religion, Society, and Security in the former Soviet Union and the al-Farabi
Carnegie Program on Central Asia in Almaty, Kazakhstan. She is professor
emeritus at Colgate University, having taught political science there from
1974 to 2002. She also teaches at the James Madison College of the
Michigan State University. Olcott served for five years as a director of the
Central Asian American Enterprise Fund. Prior to her work at the Carnegie
Endowment, Olcott served as a special consultant to former secretary of state
Lawrence Eagleburger. Her most recent books include Tajikistan’s Difficult
Development Path (2012), In the Whirlwind of Jihad (2012), Central Asia’s
Second Chance (2005), Kazakhstan: Unfulfilled Promise (2002), and Getting
It Wrong: Regional Cooperation and the Commonwealth of Independent
States (1999).

T. V. Paul is James McGill Professor of International Relations in the

Department of Political Science at McGill University in Montreal, Canada.
He is a leading scholar of international security, regional security, and South
Asia. He was founding director of the McGill/University of Montreal Center
for International Peace and Security Studies (CIPSS) during 2009–12. His
fifteen books include: The Warrior State: Pakistan in the Contemporary
World (2014), Status in World Politics (co-ed., 2014), Globalization and the
National Security State (co-author, 2010), The Tradition of Non-Use of
Nuclear Weapons (2009), India in the World Order: Searching for Major
Power Status (co-author, 2002), The India-Pakistan Conflict: An Enduring
Rivalry (2005), and South Asia’s Weak States: Understanding the Regional
Insecurity Predicament (2010).

Phillip C. Saunders is director of the Center for the Study of Chinese

Military Affairs and a distinguished research fellow at the National Defense
University’s Institute for National Strategic Studies (INSS). He also served as
director of studies for the INSS Center for Strategic Research, supervising the
center’s research on regional, global, and functional security issues. He
previously worked at the Monterey Institute of International Studies, where
he was director of the East Asia Nonproliferation Program at the Center for
Nonproliferation Studies from 1999 to 2004 and taught courses on Chinese
politics, Chinese foreign policy, and East Asian security. Dr. Saunders holds
a PhD in international relations from the Woodrow Wilson School at
Princeton University. From 1989 to 1993, he served as a US Air Force officer
working on Asia policy issues. Dr. Saunders is co-author with David
Gompert of The Paradox of Power: Sino-American Strategic Restraint in an
Era of Vulnerability (2011) and has edited books on China-Taiwan cross-
strait relations, the Chinese navy, and the Chinese air force. He is also co-
editor of a forthcoming book on the PLA role in national security decision
making. He has published numerous book chapters and articles on China and
Asian security in journals including International Security, China Quarterly,
International Studies Quarterly, the China Journal, Survival, Asian Survey,
and Joint Forces Quarterly.
Sheldon W. Simon is professor in the School of Politics and Global Studies
at Arizona State University and faculty affiliate of ASU’s Center for Asian
Research, where he has been a faculty member since 1975. Professor Simon
is also senior adviser to the National Bureau of Asian Research and a
consultant to the US Departments of State and Defense, as well as an
academic associate of the National Intelligence Council and a member of the
US Council for Security Cooperation in the Asia Pacific (CSCAP). He is the
author or editor of ten books and approximately two hundred scholarly
articles and book chapters. His most recent books are Religion and Conflict in
South and Southeast Asia: Disrupting Violence (ed. with Linell E. Cady,
2007), and China, the United States, and Southeast Asia: Contending
Perspectives on Politics, Security, and Economics. Professor Simon also
writes the “U.S.-Southeast Asia” chapters for the quarterly e-journal
Comparative Connections, published by CSIS/Pacific Forum.

Scott Snyder is senior fellow for Korea studies and director of the Program
on US-Korea Policy at the Council on Foreign Relations (CFR), where he
served as an adjunct fellow from 2008 to 2011. Prior to joining CFR, Mr.
Snyder was a senior associate in the International Relations Program of the
Asia Foundation, where he founded and directed the Center for US-Korea
Policy and served as the Asia Foundation’s representative in Korea (2000–4).
He is also a senior associate at Pacific Forum CSIS. Mr. Snyder has worked
as an Asia specialist in the research and studies program of the US Institute
of Peace and as acting director of Asia Society’s contemporary affairs
program. He was a Pantech visiting fellow at Stanford University’s
Shorenstein Asia-Pacific Research Center during 2005–6 and received an
Abe Fellowship, administered by the Social Sciences Research Council, in
1998–99. Snyder is a co-editor of North Korea in Transition: Politics,
Economy, and Society (2013); editor of The U.S.-South Korea Alliance:
Meeting New Security Challenges (2012); and author of China’s Rise and the
Two Koreas: Politics, Economics, Security (2009). Snyder received a BA
from Rice University and an MA from the regional studies East Asia
Program at Harvard University and was a Thomas G. Watson fellow at
Yonsei University in South Korea. He currently writes for the blog “Asia
Unbound.”

Robert Sutter has been professor of practice of international affairs at the

Elliott School of The George Washington University since 2011, where he
also serves as director of the Program of Bachelor of Arts in International
Affairs. A PhD in History and East Asian Languages from Harvard
University, Sutter taught full time for ten years at Georgetown University and
part time for thirty years at Georgetown, The George Washington, and The
Johns Hopkins universities, and at the University of Virginia. He has
published twenty books, over two hundred articles and chapters, and several
hundred government reports dealing with contemporary East Asian and
Pacific countries and their relations with the United States. His most recent
book is Foreign Relations of the PRC: The Legacies and Constraints of
China’s International Politics since 1949 (2013).

Hugh White is professor of strategic studies at the Strategic and Defense

Studies Centre of the Australian National University. He has worked on
Australian and regional strategic, defense, and foreign policy issues since
1980. He has been an intelligence analyst, journalist, ministerial adviser,
departmental official, think-tanker, and academic. In the 1990s he served as
international relations adviser to Prime Minister Bob Hawke and as deputy
secretary of defense for strategy and intelligence. He was the principal author
of Australia’s 2000 defense white paper. His recent publications include
Power Shift: Australia’s Future between Washington and Beijing (2010) and
The China Choice: Why America Should Share Power (2012, 2013). The
China Choice has also been published in Chinese and Japanese. In the 1970s,
Hugh White studied philosophy at Melbourne and Oxford universities.