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E DITE D BY
DAVID A R A SE
CH INA ’ S R I S E A N D
CH A NG ING O R D E R
IN E A S T A S I A
Politics and Development of Contemporary China

Series Editors

Kevin G. Cai
Renison University College
University of Waterloo
Waterloo, Canada

Guang Pan
Shanghai Center for International Studie
Shanghai Academy of Social Sciences
Shanghai, China

Daniel Lynch
University of Southern California
Los Angeles, California, USA
As China’s power grows, the search has begun in earnest for what super
power status will mean for the People’s Republic of China as a nation as
well as the impact of its new-found influence on the Asia-Pacific region
and the global international order at large. By providing a venue for excit-
ing and ground-breaking titles, the aim of this series is to explore the
domestic and international implications of China’s rise and transforma-
tion through a number of key areas including politics, development and
foreign policy. The series will also give a strong voice to non-western per-
spectives on China’s rise in order to provide a forum that connects and
compares the views of academics from both the east and west reflecting
the truly international nature of the discipline.

More information about this series at

http://www.springer.com/series/14541
 David Arase
Editor

China’s Rise and

Changing Order in
East Asia
Editor
David Arase
Johns Hopkins University
School of Advanced International Studies
Nanjing University
Nanjing, Jiangsu, China

Politics and Development of Contemporary China

ISBN 978-1-352-00022-1    ISBN 978-1-352-00023-8 (eBook)
DOI 10.1057/978-1-352-00023-8

Library of Congress Control Number: 2016959997

© The Editor(s) (if applicable) and The Author(s) 2016

This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights of
translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specific statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
in this book are believed to be true and accurate at the date of publication. Neither the
publisher nor the authors or the editors give a warranty, express or implied, with respect to
the material contained herein or for any errors or omissions that may have been made.

Cover image © Andrew Dernie

Printed on acid-free paper

This Palgrave imprint is published by Springer Nature

The registered company is Nature America Inc.
The registered company address is: 1 New York Plaza, New York, NY 10004, U.S.A.
 Contents

Part I Introduction1

1 The Question of Regional Order in East Asia3

David Arase

Part II China Rising35

2 China and East Asian Cooperation: Fundamental

Bottlenecks, Recent Problems, and New Orientations37
Yinhong Shi and Caizhen Han

3 Remapping Asia’s Geopolitical Landscape:

China’s Rise, US Pivot, and Security Challenges
for a Region in Power Transition49
Jingdong Yuan

4 Sino-US Strategic Convergence and Divergence

in East Asia63
Bin Shi
vi Contents

5 The USA and Challenges to East Asia’s Security Order89

Zongyou Wei

6 How Stable Is China’s Economy?107

Paul Armstrong-Taylor

Part III Northeast Asia123

7 US-China Rivalry and South Korea’s Strategy125

Chaesung Chun

8 Formation of Regional Community in East Asia:

A Japanese Perspective145
Kazuhiko Togo

9 Rebuilding Sino-US Cooperation Over North Korea

Nuclear Issue161
Jishe Fan

10 Pathways to a Northeast Asian Energy Regime173

Gaye Christoffersen

Part IV Southeast Asia197

11 The Meaning of ASEAN in the Regional Security

Architecture199
Quang Minh Pham

12 South China Sea Disputes: Litmus Test for

China’s Peaceful Rise—How US Scholars View
South China Sea Issues217
Li Xue
 Contents  vii

13 The ASEAN-Centred Cooperative Security

Regime in Asia225
Daljit Singh

Part V Indian Ocean Region241

14 The China-India-USA Engagement in the Asia-Pacific:

Security Implications for East Asian Regionalism243
Li Zhang

15 India’s Growing Role in East Asia259

Mahendra Gaur and Sylvia Mishra

Index277
 Note on Contributors

David Arase is resident professor of international politics at the Hopkins-­

Nanjing Center of the Johns Hopkins University—School of Advanced
International Studies. The Hopkins-Nanjing Center is located at Nanjing
University, Nanjing, China.
Paul Armstong-Taylor is resident professor of economics at the
Hopkins-Nanjing Center of the Johns Hopkins University—School of
Advanced International Studies. The Hopkins-Nanjing Center is located
at Nanjing University, Nanjing, China.
Gaye Christoffersen is resident professor of international politics at the
Hopkins-Nanjing Center of the Johns Hopkins University—School of
Advanced International Studies. The Hopkins-Nanjing Center is located
at Nanjing University, Nanjing, China.
Chaesung Chun is professor in the Department of International
Relations at Seoul National University and director of the Asian Security
Initiative at the East Asian Institute in Seoul, South Korea.
Jishe Fan is director of the Division for Strategic Studies and deputy
director of the Center for Arms Control and Non-proliferation Studies at
the Institute of American Studies of the Chinese Academcy of Social
Sciences in Beijing, China.
Mahendra Gaur is director of the Foreign Policy Research Centre in
New Delhi, India.
x Note on Contributors

Caizhen Han is professor in the Department of International Relations

at Renmin University in Beijing, China.
Sylvia Mishra is editor of the Foreign Policy Research Center Journal in
New Delhi, India.
Quang Minh Pham is vice rector of the University of Social Sciences and
Humanities in the National University of Vietnam in Hanoi, Vietnam.
Bin Shi is professor at the Hopkins-Nanjing Center and in the School of
Government at Nanjing University, Nanjing, China.
Yinhong Shi is a member of the State Council of China as well as profes-
sor and director at the Center for American Studies in the Department of
International Relations at Renmin University in Beijing, China.
Daljit Singh is the coordinator of the Regional Strategic and Political
Studies Program in the Yusuf Ishak Institute of Southeast Asian Studies in
Singapore.
Kazuhiko Togo is director of the Institute for World Affairs at Kyoto
Sangyo University in Kyoto, Japan. He is a former ambassador and retired
Japan Ministry of Foreign Affairs official.
Li Xue is director of the Strategic Research Office in the Institute of
World Economy and Politics of the Chinese Academy of Social Sciences in
Beijing, China.
Zongyou Wei is professor and vice dean of the Institute of International
and Diplomatic Affairs at the Shanghai International Studies University in
Shanghai, China.
Jingdong Yuan is associate professor in the Centre for International
Security Studies at the University of Sydney in Sydney, Australia.
Li Zhang is professor in the South Asia Research Institute of Sichuan
University in Chengdu, China.
 List of Figures

Fig. 6.1 Growth in credit and shadow banking in China 109

Fig. 6.2 International comparisons of China’s shadow banking system 110
Fig. 6.3 Structure of shadow banking of China 111
Fig. 6.4 Exports to China as percentage of GDP 117
Fig. 6.5 Financial exposure to China 118
 List of Tables

Table 7.1 US-China relationship in different power games 135

 PART I

Introduction
 CHAPTER 1

The Question of Regional Order

in East Asia

David Arase

The New Regional Agenda: Adjusting to China

as a Great Power

Every state in East Asia desires continuing peace and development. But
all of them must deal with conflicts of interest that touch their vital inter-
ests. The successful management of such conflicts has maintained regional
stability and permitted the region to share growth and development. The
key has been a regional order that finds its origin in the post-World War
II era of US hegemonic power. From the start of the Cold War, the USA
constructed a liberal international order for its allies and friends based on
free trade for all within the sphere of US strategic dominance.
China defected from the Soviet block from 1971 and, after setting
out on reform and opening up under Deng Xiaoping, it gained inclusion
into the liberal free trade order. After the Soviet Union collapsed and left
the USA predominant in a unipolar global structure of power, the lib-
eral international order accommodated the former communist states. This
globalized liberal order gave the USA an integral economic and strategic

D. Arase (*)
Hopkins-Nanjing Center for Chinese and American Studies, Nanjing, China

© The Author(s) 2016 3

D. Arase (ed.), China’s Rise and Changing Order in East Asia,
DOI 10.1057/978-1-352-00023-8_1
4 D. ARASE

presence in every world region. Not all states accepted this US-sponsored
global order, but very few chose to directly challenge it.
However, the rise of China to great power status is transforming
the international structure of power from unipolarity to bipolarity, first
of all at the regional level, which is the concern of this book. Some
might argue that China is not yet fully qualified as a global power
(Shambaugh). But there is no denying that China now wants to be
recognized as a great power, and that all of its neighbors already treat it
that way. China’s GDP has already surpassed that of the USA in terms
of real production (measured in purchasing power terms); and though
its growth is now dipping below 7 percent, its growth remains at least
twice as fast as US growth, so its margin of superiority will widen in
the foreseeable future. It is already without doubt the predominant
economic and military power among Asian nations, and not only does it
envision a new regional order, which it calls a “Community of Common
Destiny,” but it also offers to provide public goods to realize it, such as
its One Belt-One Road (OBOR) initiative to build economic corridors
radiating out from China to integrate all of Eurasia with the Chinese
economy; and the Asian Infrastructure Investment Bank designed to
help finance the OBOR.
The new rise in power of China restructures not only the world and
greater East Asia, but also each of East Asia’s subregions, where parties
locked in local conflicts must now adjust their respective strategies. This
kind of change occurring at all levels simultaneously can be destabilizing.
Contributors to this volume look at the effects of China’s rise, examine
the implications for regional order, and assess the future outlook at three
levels, that is, the greater East Asian region; relevant Asian subregions; and
regional institutions. Each contributor is an internationally recognized
expert, and together they present a variety of regional perspectives on
how China’s rise is affecting the prospects for stability.

Region, Regionalism, and Regional Order

in East Asia

We think of the East Asian region as a network of states with interdepen-

dent economic and security relations. At its core are the ten member states
of the Association of Southeast Asian Nations (ASEAN) and the Northeast
Asian states of China, Japan, and the two Koreas. But the network of criti-
cally interdependent relations extends outward to include countries such as
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 5

the USA, Australia, and India, whose strategic and economic links to East
Asia are so deep that any discussion of East Asian security and prosperity
cannot exclude them.
Other names for this network of regional interdependence could be
chosen. For example, Americans prefer to use the term Asia-Pacific to
place themselves as actors in a trans-Pacific framework of interdependent
economic and security relations. India, Australia, Indonesia, and, increas-
ingly, other actors use the term Indo-Pacific to focus on trade and security
relationships that are quickly integrating the Indian Ocean and East Asian
littoral areas into a vast belt of economic growth and development. These
names are not so much mutually exclusive as indicative of different per-
spectives on the same underlying reality, of critically interdependent rela-
tions knitting together states in contiguous geographical space anchored
in geographic East Asia.
Of course, in a globalized world any network of regional relations is
actually part of an integrated globalized system of interdependent rela-
tions. But we can analytically frame and linguistically name a regional
focus in a way that is appropriate to our interests. In this case, our interest
is the impact of China’s rise on regional stability and how this impact will
work itself out through this network of relationships. The rise of China
to great power status will be felt first and foremost in East Asia. No one
doubts the historic significance of China’s rising economic and military
power. It is creating asymmetries in regional relations that empower China
in qualitatively new ways.
Political adjustments are inevitable, and the fundamental question is
whether the norms and values that provide the basis for the existing East
Asian regional order can accommodate changes that China might like to
see. China wants a leadership role in Asia to match its regional power rank-
ing, but the current order has been built under, and is still reliant upon,
US leadership. Almost all regional states belong to the Bretton Woods
institutions and the World Trade Organization (WTO), which provide
global rules for economic interaction. Treaties, conventions, international
organizations, and customary international law provide norms that gov-
ern the relations between states. Regional stability is underwritten by the
hub-and-spoke system of US bilateral military alliances with Japan, South
Korea, the Philippines, Thailand, and Australia. This has allowed the US
Navy to guarantee freedom of navigation in the global commons, which
supports economic dynamism and the growth of trade, which is the func-
tional core of the East Asian region.
6 D. ARASE

Some suggest that China’s “peaceful rise” has been a “neo-Bismarckian”

strategy to promote power accumulation without triggering a competi-
tive, counterbalancing response from actual and potential rivals (Goldstein
2003). Analysts used to say, “The U.S.-China security dilemma is in large
measure a function of the Taiwan question.” (Johnston 2004, p. 81) Today,
however, the security dilemma is becoming rooted in the question of who
will determine the norms that govern the regional order. Yan Xuetong
(2014) argues that it is time for China to openly “strive for achievements”
and compete with the USA for predominance in Asia.
Prior to the rise of a more assertive China, many looked at the
regionalization of East Asian relations, that is, the growing intensity of
intra-regional trade and investment relations centered in East Asia, and
anticipated the growth of regionalism, that is, the effort to construct
regional institutions, whether informal or formal, to consolidate stabil-
ity and manage intensifying regional interdependence (Pempel 2005).
Regionalism is a political process that aims to produce a convergence of
interests and norms among states to gain greater security and prosperity
through mutual accommodation. Thus, regionalism aims at least to pro-
duce stability, and it aspires to produce institutions that permit members
to achieve shared goals. Whether or not regionalism succeeds is the test
of its relevance.

East Asia’s Soft Regionalism

East Asian regionalism has taken on “soft” informal institutional forms,
where actors meet regularly to discuss prospects for regional cooperation.
This soft form of regionalism leads to flexible, ad hoc deliberations and
agreements on specific issues where gains through cooperation can be eas-
ily achieved. It was hoped that soft regionalism would produce converging
interests that develop into harder mechanisms with professionally staffed
and legally chartered institutions that have the authority to make binding
decisions and impose sanctions for noncompliance. This would create an
institutionalized basis for regional stability and collective action.
The soft regionalism goes back to the late 1960s, when Japan’s depen-
dence on exports to the USA, Australia’s desire for economic engagement
with North America, and the desire of the USA to consolidate and spread
a free trade order in Asia created a demand for trans-Pacific ­economic
cooperation. The rise of US-Japan trade friction also meant that insti-
tutional mechanisms to manage trade informally would be useful. The
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 7

informal initiatives supplied to meet these demands were the Pacific

Basin Economic Community forum (PBEC) and the Pacific Trade and
Development Conference (PAFTAD). The trans-Pacific economic coop-
eration concept later expanded in 1980 to incorporate developing coun-
tries in the Pacific Economic Cooperation Conference (PECC) forum.
The trans-Pacific PECC proposed the creation of the intergovernmen-
tal Asia Pacific Economic Cooperation (APEC) forum, which became a
reality in 1989. APEC was intended to liberalize Asia-Pacific trade, and
the USA used a prospective Asia-Pacific trade block as leverage to bring
the Uruguay Round to a successful conclusion. In 1990, Malaysian prime
minister, Mahathir bin Mohamed, reacted to the APEC agenda by pro-
posing an exclusively East Asian regional institution. It was called the East
Asian Economic Group and it would be composed of the ASEAN mem-
bers with China, Japan, and South Korea joining the group. The idea was
to focus on trade facilitation and industrial policy coordination rather than
on trade and investment liberalization under uniform and legally binding
treaty obligations. The idea failed when it met with resistance from the
USA. But the idea of an exclusively “Asian” regionalism reemerged after
the Asian Financial Crisis. High-level meetings among the ASEAN mem-
bers, China, Japan, and Korea led these countries to form the ASEAN Plus
Three (APT) summit process in 1999. APT created a nexus of bilateral
currency swaps called the Chiang Mai Initiative that became a formal mul-
tilateral agreement in 2010.
In response to multinational corporations looking to set up regional
production networks in Asia, the ASEAN countries produced the ASEAN
Free Trade Agreement (AFTA) in 1992. This set of binding tariff and
nontariff barrier reduction targets was intended to turn ASEAN into
an integrated production base. In a further bid to boost trade and draw
foreign investment, ASEAN began negotiating individual free trade
agreements (FTAs) with China, Japan, India, Australia, New Zealand,
and South Korea. By 2010, all these FTAs were signed. Then, in 2012,
ASEAN launched formal talks on the Regional Comprehensive Economic
Partnership (RCEP), which would consolidate ASEAN’s bilateral FTAs
with China, Japan, South Korea, Australia, New Zealand, and India into a
single multilateral arrangement. Negotiations were scheduled to finish by
the end of 2015. Thus, we see that ASEAN has been the center of FTA
construction in the region.
Failure to move the trade agenda forward at the global level has led
to new macro-regional trade initiatives currently under negotiation, but
8 D. ARASE

political and institutional differences found within such a wide array of

actors make it uncertain whether any will go much beyond the status
quo. The above-mentioned RCEP is one major example. The other is
the Trans-Pacific Partnership (TPP). In 2008, the USA joined an exist-
ing four-way FTA between Brunei, Chile, New Zealand, and Singapore
called the Trans-Pacific Strategic Economic Partnership Agreement. Since
then, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, and Japan have
followed suit and the name has been simplified to TPP. This has become
a vehicle for the USA to revitalize trans-Pacific trade liberalization.
However, in contrast to APEC’s inclusive soft cooperation that requires
little of participants, TPP members self-select on the basis of their willing-
ness to negotiate legally binding guarantees that go well beyond current
WTO spheres of trade and investment liberalization. The TPP excludes
China because the nature of its socialist economy prevents it from mak-
ing the necessary commitments to deregulate and guarantee new kinds of
property and contractual rights.
East Asia’s soft regionalism was built on economic interdependence,
which in turn relied upon the global stability, freedom of navigation, and
free trade rules provided by the US-sponsored liberal international order.
In this sense, East Asia’s soft institutional arrangements implicitly affirmed
the US hegemonic order (Katzenstein 2005). This is not to minimize East
Asian regionalism, because this process aimed to shift the basis of regional
order to law-based multilateral governance institutions. However, the rise
of an assertive China that questions structural elements of the existing
regional order forces us to remember that East Asian regionalism remains
far from achieving its aspirations. If China, as a newly risen great power,
defects from the existing liberal hegemonic order, it cracks the very foun-
dation on which East Asian soft regionalism is built.

The Transformation of Regional Structure

When Deng Xiaoping led China into the era of reform and opening up,
he wanted access to Western markets, capital, and technology on favor-
able terms. China agreed to side with the USA against the Soviet Union
and stop challenging US leadership, and it endeavored to meet WTO,
World Bank, and IMF rules as best as it can, while maintaining “socialism
with Chinese characteristics.” The USA welcomed China and felt confi-
dent that over time, China would drop its distrust of the USA, democ-
ratize, and become fully socialized into the US-led ­liberal ­international
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 9

order. This historic deal, which might be described m ­ etaphorically as

“same bed, different dreams,” was marked by the normalization of
China-US relations in 1979. The world remained bipolar at the global
strategic level until the fall of the Berlin Wall in 1989. But at the East
Asian regional level, East Asia consolidated under the liberal hegemonic
order by 1979.
Today, however, China’s rise to great power status has changed the
structure of regional economic and military power from unipolarity back
to bipolarity, only this time with China as the other great power pole.
One notes that today, the USA no longer has critical military or economic
leverage over China, and other countries will do anything to avoid having
to choose between these two powers.

Hegemonic Order Versus Balance of Power Order

When the world is unipolar, the predominant (hegemonic) power can cre-
ate rules that lesser powers must follow or face possible consequences.
This creates a system-wide, hegemonic order. Lesser powers gain ben-
efits by joining this order, and incur costs by remaining outside of it.
Hegemonic order can be relatively peaceful and cooperative, at least until
another great power arises to challenge the authority of the hegemonic
power (Gilpin 1981).
When the world is multipolar, a balance of power order develops. When
two or more great powers disagree over a matter of vital interest, war is
always an option. Because disagreements over vital interests between great
powers inevitably arise, when the rule of law is absent, insecurity is chronic
and distrust is rational. Therefore, prudence dictates that each great power
should seek an advantage over the other(s). Such prudent behavior in the
military sphere creates an action-reaction cycle of arms acquisition that
leads to more distrust and less security. In the economic sphere, prudence
dictates reduced economic dependence on a rival, if not an avoidance of
trade altogether.
However, in an insecure world lesser powers need the association with
a great power not only for protection from other lesser powers, but also
from other great powers. The result is that competing great powers acquire
followers and divide the world into competing orders (Waltz 1979). We
saw the consequences of this balance of power logic in the Cold War: the
world was divided into two hostile camps.
10 D. ARASE

How Will China’s Rise Affect Regional Order?

The structural transformation of regional order suggests that, other things
being equal, the two great powers will begin to compete in the ways out-
lined above with the worst-case scenario being sharp strategic competition
between China and the USA (Mearsheimer). Nevertheless, great powers
have in the past agreed to limit unbridled competition and avoid war.
One example is the Concert of Europe dated from the Treaty of Versailles
(1815) that stabilized Europe for a century following the Napoleonic
Wars. Another is the peaceful transition of international economic and
naval predominance from Britain to the USA in the 1914–1945 period.
So the question is, Can China and the USA prevent strategic competition
and the polarization of the region into hostile camps?
What is lacking between the USA—a champion of democracy and
human rights—and the Chinese party-state regime, which remains
avowedly illiberal, is agreement on fundamental liberal principles such as
free trade, open global commons, human rights, democracy, and rule of
law that applies impartially and equally to those who make the law. From
this values-oriented perspective, it is difficult to see how a cooperative
regional order can be agreed upon.
Could shared material interests provide an alternative basis for coop-
erative order? Because China “grew up” to achieve great power status
within the liberal international order, it is heavily invested in cooperation
regimes and economic relations with the USA that would be difficult and
incredibly costly to destroy. A liberal institutionalist might argue that, even
after hegemonic decline produces a return to multipolarity, it is theoreti-
cally possible that a self-interested desire to protect existing multilateral
cooperation regimes could negate the logic of great power competition
to maintain the status quo of international order (Keohane, Ikenberry).
So, on the one hand, structural realism predicts a region divided between
competing great powers. On the other hand, liberal institutionalism sug-
gests that an open cooperative regional order can be sustained after the USA
loses its hegemonic power status. With the rise of China ending unipolar
US predominance, we face an empirical test of these competing hypotheses.

US Proposals for Strategic Partnership

The Bush administration proposed a “responsible stakeholder” role to
China. Deputy Secretary of State Robert B. Zoellick explained that, “From
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 11

China’s perspective, it would seem that its national interest would be much
better served by working with us to shape the future international system”
(Zoellick 2005). However, subsequent bilateral discussions were incon-
clusive. Soon after the Obama Administration entered office in 2009, it
offered China “mutual strategic reassurance”—some observers nicknamed
it a G-2 global governance scheme—to cooperatively manage the existing
international order across the full spectrum of issues (Steinberg 2009). It
also began an expanded annual bilateral dialogue, the US-China Strategic
and Economic Dialogue, to work out the details. However, the timing of
this initiative coincided with the global financial crisis that plunged the
USA into negative growth and fiscal crisis, as well as with the start of US
troop withdrawals from Afghanistan and Iraq. The USA did not appear to
be offering strategic partnership from a position of long-term strength. In
contrast, China continued its high GDP growth, almost unaffected by the
economic travails besetting the USA.

China Rejects US Overtures of Strategic Partnership

China’s negative response was implicit in its challenges to the status and
interests of the USA in selected areas. In the midst of US attempts to
coordinate a response to the global financial crisis, Chinese officials openly
called for a new global currency regime to replace the US dollar-centered
system (The Telegraph 2009). And at the 2009 Copenhagen climate
change summit, Premier Wen Jiabao failed to attend a leaders’ meeting to
hear the Western call for shared commitment to cut carbon dioxide (CO2)
emissions. Later during the summit he called a meeting of non-Western
leaders—to which the USA was uninvited—to counter the US agenda
(The Guardian 2009).
At the regional level, China began asserting disputed jurisdictional
claims in surrounding seas. In the South China Sea, China registered
its imprecisely drawn 9-dash line jurisdictional claim with the United
Nations (UN) in 2009. The line was originally drawn by hand by a KMT
official in 1947 to make a notional claim of historical ownership of the
South China Sea. The line is not derived from customary international
legal principles that draw maritime ownership lines carefully projected
from the shoreline of national territory. Because these legal norms make
the claim problematic, China continued to rely on the idea of histori-
cal ownership to justify the shape and extent of the 9-dash line (Gao
and Jia 1998; Jacobs 2014). China also rejected the use of impartial
12 D. ARASE

i­nternational adjudication mechanisms to settle maritime boundary

­disputes with other coastal states that have exclusive economic zone
(EEZ) rights in the South China Sea because China believes that its
historical claim is “indisputable” (Foreign Ministry of the PRC 2014).
China challenged international legal norms in its neighboring seas in other
ways. It asserted a right to regulate foreign militaries operating in China’s
EEZ, even though the United Nations Convention on the Law of the Sea
(UNCLOS) states that the EEZ remains the high seas for purposes other
than economic development (Thayer 2011). Finally, China put great effort
into the rapid modernization of Chinese weapons designed to neutralize
naval bases and fleets operating in the Western Pacific. This “area access/area
denial” (A2/AD) capability gave China strategic dominance over neighbor-
ing maritime states, and it challenged the US Navy’s ability to guarantee open
sea-lanes and the security of US friends and allies in East Asia (Cheng 2014).

US Strategic Rebalancing Toward Asia

At the July 2010 ASEAN Regional Forum meeting, Secretary of State
Hillary Clinton indicated that the USA had a “national interest” in main-
taining peace and stability, respect for international legal norms, and free-
dom of navigation (FON) in the South China Sea. She took a neutral
stance among the territorial disputants, and offered to mediate among
the rival claimants. Chinese officials angrily refused to entertain any such
notions (The New York Times 2010).
The Obama administration signaled commitment to regional allies
and international norms threatened by China’s assertiveness with the so-
called strategic “pivot” or “rebalancing” toward Asia. President Obama
used the APEC summit, a visit to Australia, and the East Asia Summit
in late 2011 to announce this initiative. The strategic rebalancing had
six elements: (1) more diplomatic engagement; (2) better relations with
Asia’s rising powers, including China, India, and Indonesia; (3) stron-
ger military deterrence and new security cooperation partners; (4) a
new TPP regional trade and investment initiative; (5) more support for
regional multilateral forums; and (6) continuing support for democracy
and human rights.
Strategic rebalancing promised more of a two-track approach
toward China, that is, more engagement and more strategic hedg-
ing. The ­difference between strategic rebalancing and an effort to
“contain” China is that the USA seeks engagement with China at all
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 13

l­evels and across all issue areas so that differences can be worked out.
Strategic hedging preserves US alliances and reassures allies while
the USA engages China. Nevertheless, commentaries in the Chinese
media about strategic rebalancing accused the USA of trying to “con-
tain” China’s rise.

China Offers a “New Type of Great Power Relationship”

Shortly after Obama announced the strategic rebalancing, Xi Jinping, the
designated successor of Hu Jintao as secretary general of the Communist
Party of China (CPC) and president of China, visited Washington, DC, in
February 2012. He called for “a new type of great power relationship” (
新兴大国关系) (Cui and Pang 2012). This called for mutual respect and
win-win cooperation to avoid strategic competition of the sort that struc-
tural realists predicted. As an Asian great power, China seemed to want
everyone, including the USA, to respect its paramount rights and privi-
leges in Asia, which China indicated would not be unreasonable. Then
in early spring 2012, China initiated a lengthy maritime campaign led
by civilian vessels to gain administrative control of Scarborough Shoal/
Huangyandao in the South China Sea, where the Philippine coastguard
had been protecting claimed EEZ fishing rights.
After succeeding in this effort, China initiated a similar campaign in the
East China Sea to gain control of the Senkaku/Diaoyu islets administered
and claimed by Japan. This campaign peaked just as Defense Secretary
Leon Panetta stopped in Tokyo and headed to Beijing in September 2012
with a message of reassurance for both Japan and China. But China wanted
its claims to disputed territories, even those involving close US allies, to be
respected by the USA.

Xi Jinping Articulates China’s Great Power Agenda

Xi Jinping assumed leadership in November 2012 and immediately
called for the “great rejuvenation of the Chinese nation” (中华民族伟
大复兴) (Xinhuanet 2012). He also repeated his call for a new type of
great power relationship. When Xi met informally with President Obama
at Sunnylands, CA, in July 2013, he sought US respect for China’s core
interests in Asia (Lampton 2013; Li and Xu 2014). China wanted an end
to “Cold war thinking,” code language for US alliances that originated
14 D. ARASE

in the Cold War. “Mutual respect” would avoid the “Thucydides Trap”
of rivalry between a rising power and a declining hegemon that produces
war. Thus, as China rose to replace the USA as the world’s leading power,
it offered a way for both sides to protect their core interests and avoid the
risk of hegemonic war.
Xi Jinping has set an ambitious agenda that aims to realize China’s
great power (qiang guo) status and secure its “core interests,” which are
the continuing rule of the CPC in China; the sovereignty and territorial
integrity of the state; and the continuing development of the economy.
China seeks peace, but the “bottom line” is that it will use any and all
means to defend its core interests. Xi Jinping cultivates a Chinese identity
rooted in memories of past golden eras characterized by Confucian values
and a Sino-centric world order. China wants to recover from the century
of humiliation inaugurated by the Opium War, and it expects the USA to
accommodate its legitimate aspirations.
China began large-scale artificial island construction in several loca-
tions across the middle of the South China Sea from 2013. China denies
the right of foreign navies to operate inside the 9-dash line without
Chinese approval, and it denies “innocent passage,” that is, the right of
foreign warships to transit its territorial waters for peaceful purposes.1
And China appears to claim a territorial limit around its artificial islands
These claims would turn the high seas global commons in the South
China Sea into a Chinese administered possession that blocks the pas-
sage of the US Navy and threatens freedom of navigation (FON), the
right of vessels of all nations to free and unobstructed transit across
the high seas. China’s claims are not based on customary or treaty-
based (UNCLOS) international law, but rather on China’s self-declared
“indisputable sovereignty” over territories that belong to China by his-
torical right. All this indicates how China seeks to redefine regional
norms and the seriousness of China’s desire for Asian predominance.
However, China’s effort to secure its core interests in Asia comes up
against a US determination to preserve its influence and defend interna-
tional norms that maintain the liberal international order. For this reason,
the US Navy began FON patrols through the claimed territorial zones of
the artificial islands in October 2015. Both sides seem to be talking past
one another and the situation seems headed toward spiraling strategic dis-
trust and competition.
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 15

The Open Door Versus the Community of Common

Destiny
It would be useful at this point to indicate how the USA and China cur-
rently view the question of regional order. On the one hand, the USA has
a long-standing vision of regional order that dates back to the Open Door
Notes. On the other hand, China has only begun to articulate a vision of
regional order since Xi Jinping took over, but it has worked quickly to
outline something called the “Community of Common Destiny” (命运共
同体—mingyun gongtongti).

The Open Door

The Open Door refers to the Open Door Notes of 1899 and 1900 that
marked the arrival of a distinctive US vision for the development of the
Asian region. The original Open Door Notes stated the US desire for
nondiscriminatory free trade practices in China, and respect for China’s
sovereignty and territorial integrity. This definition of US interest in China
came to characterize the economic rationale for US engagement with the
rest of the world (Williams 2009; LaFeber 1963).
The US desire to expand its presence in Asia went beyond the material
desire for trade. Given its revolutionary origins as a place where religious,
economic, and political practices overthrew European feudal and monar-
chical traditions and developed a democratic republic, the USA has been
eager to share its vision of religious, economic, and political life with the
rest of the world (Smith and Leone 1995). The USA started its advance
into Asia first of all in the Philippines, which the USA acquired from Spain
after the Spanish-American War in 1898.
The essential aspects of this US vision include a trans-Pacific geographi-
cal dimension that links the USA to Asia; open markets free of govern-
ment regulation that impede business; stability and freedom of navigation
guaranteed by US bilateral alliances and naval power; and the promo-
tion of democracy and human rights. The USA has maintained this liberal
hegemonic vision to this day (Clinton 2011).
The USA has been contemplating the rise of China to peer competi-
tor status since the end of the Cold War. On the one hand, realists sug-
gest that China will seek regional hegemony in Asia, which requires the
removal of US strategic influence there. So the US interest would be to
contain and prevent China’s rise (Mearsheimer 2001; Friedberg 2005,
16 D. ARASE

pp. 90–102). On the other hand, liberal institutionalists suggest that

international cooperation regimes can cause states to desire the preserva-
tion of cooperation and long-term relations of mutual benefit with other
states. So China’s inclusion in the liberal international order and deepen-
ing economic interdependence with the USA will eventually induce China
to support the existing international order (Nye 1995).
The USA decided on a two-track approach to China: engage China to
deepen its stake in the existing liberal order and turn it into a “responsible
stakeholder”; keep US alliances in Asia intact as a hedge against the risk of
China defecting from the liberal order once it grew strong enough to chal-
lenge the USA. Now that China believes that it has achieved great power
status, it is time for China to show its hand.

China’s Community of Common Destiny

China has recently reframed its thinking about regional order. In the
past, China primarily supported the China-ASEAN axis of coopera-
tion. The APT framework of regional cooperation was next in impor-
tance. But now China under Xi Jinping’s leadership has inaugurated a
programmatic effort to construct a so-called Community of Common
Destiny (命运共同体—mingyun gongtongti) in Asia. This phenom-
enon represents a distinctively Chinese model of Asian regionalism,
and it comes in response to a new historical moment, that is, the end-
ing of America’s post-Cold War “unipolar moment” and the transition
back to structural bipolarity in the international system. With China’s
neighbors ever more dependent on China’s trade, capital, and GDP
growth—not to mention China’s strategic behavior—China wants
to craft a China-centric initiative that differs markedly from existing
approaches to Asian regionalism.
The term, “Community of Common Destiny” appeared in the latter half
of Hu Jintao’s reign, when he used it in connection with Taiwan and Shanghai
Cooperation Organization (SCO) members. Xi Jinping used it prominently
during his early October 2013 tour of ASEAN members to reference his desire
for much closer China-ASEAN security and economic relations based on
reciprocity (“win-win”) and mutual benefit (Xinhua 2013a). But during the
October 23–24, 2013 Chinese Communist Party Central Committee’s Work
Forum on Diplomacy toward the Periphery (周边外交工作座谈会) Xi used
the term to express a general vision of China’s future relations with neighbor-
ing countries, and it is often used in this wider sense in the media (Ministry
 THE QUESTION OF REGIONAL ORDER IN EAST ASIA 17

of Foreign Affairs of the People’s Republic of China 2013; Zhao 2013). He

said: “把中国梦同周边各国人民过上美好生活的愿望、同地区发展前景对
接起来,让命运共同体意识在周边国家落地生根,” which roughly translates
as: “Use the China Dream to give the peoples of each neighboring country
the prospect of achieving a beautiful life, link it to the region’s development
prospects, and let the idea of the Community of Common Destiny take root
in surrounding countries” (Xinhua 2013b).
To construct this community, China has advanced the OBOR con-
cept. The “21st Century Maritime Silk Road” builds a string of ports from
Fujian southward into maritime Southeast Asia, the Indian Ocean littoral,
and into the Persian Gulf and Mediterranean Sea. The “New Silk Road
Economic Belt” radiates overland rail, highway, and pipeline transpor-
tation corridors through Central Asia to ports on the Arabian Sea, the
Persian Gulf, the Black Sea, the Mediterranean Sea, the Baltic Sea, and the
Atlantic Ocean. It also sends corridors from Yunnan to India, Myanmar,
Singapore, and Vietnam where they terminate at Chinese-built Silk Road
ports. It envisions thousands of infrastructure projects, each one negoti-
ated between governments on a case-by-case basis.
Beijing’s approach relies on massive infrastructure investment to make
China the economic hub of Eurasia. It uses China’s geographical central-
ity, huge market, and ability to export prodigious quantities of capital,
build physical infrastructure, provide plant and equipment, and depend on
capable diplomacy. Whether or not China will be fully successful in realiz-
ing a Chinese dominated Eurasia, the effort to construct a Community of
Common Destiny has implications for other efforts to build regional order.
The OBOR approach to regionalism differs from the liberal order in
four key ways: it is not multilaterally negotiated, but bilaterally negotiated
between China and each linked state; it is not treaty-based liberalization
that removes legal barriers to economic exchange, but trade facilitation
that boosts economic using infrastructure corridors and state development
policy coordination; membership qualifications and rules are not objective
and nondiscriminatory, but negotiated with China on a case-by-case basis;
and it is not built by free markets and private sector initiative, but by
national development plans and policy coordination between states.

China-US Strategic Accommodation?

The first three chapters of this volume express Chinese academic perspec-
tives on the question of China’s rise and the adjustment of China-US
relations. They offer their own formulas for a reconciliation of Chinese
18 D. ARASE

and US interests that will permit a strategic partnership. They bear careful
reading for clues and insights into how China is thinking about this vitally
important question, and what, if any, compromise is possible. Before sum-
marizing them, we first might briefly indicate how Americans tend to view
the same question as of 2015.
Among the American public, recent media reports of cyber disputes,
human rights violations, and South China Sea conflict involving China
have produced a negative trend in US perceptions, with negative senti-
ments expressed by 54 percent of the public, up from 40 percent in 2012.
Favorable views were expressed by 38 percent, down from 40 percent
(Pewglobal.org 2015). There is among US experts today a shared con-
sternation regarding China’s apparent rejection of US overtures for stra-
tegic partnership. But there are different opinions regarding what to do
about it. Optimists such as Lyle Goldstein argue for persistence in coop-
erative engagement, suggesting that more time and effort, better policy
ideas, and the need for Sino-US cooperation to manage global problems
can produce “cooperation spirals” leading to cooperative strategic part-
nership (Goldstein 2015). Pessimists like Michael Pillsbury argue that
engagement was a flawed strategy because Beijing has always intended
to displace US power and influence in the world. Therefore, the USA
has to recognize that China poses a fundamental challenge to its values
and interests (Pillsbury 2015; Friedberg 2011). Pragmatists like Thomas
J. Christensen admit that engagement may not lead Beijing to embrace a
liberal world order, but cooperation must still be pursued to achieve what
positive outcomes it can. At the same time, military deterrence and a reso-
lute defense of US values and interests need to be maintained at acceptable
cost (Christensen 2015; Steinberg and O’Hanlon 2014).
In Chap. 2, Shi Yinhong and Han Caizhen are pessimistic about the pros-
pects for a regional order built on regionalism. They point to five obstacles:
(1) the large number and diversity of states in East Asia makes institution-
building problematic; (2) smaller powers cannot truly lead; while the region’s
big powers cannot agree on which of them should lead; (3) China and the
USA each regard the other as an “outsider” in East Asia; (4) parties to con-
flicts in the Korean peninsula, the Taiwan Strait, or the South China Sea will
not entrust their national security to regional institutions; and (5) growing
nationalism in the region makes existing conflicts more difficult to resolve.
Theoretically, Shi and Han believe that growing economic interdependence
can and should lead to a multilateral cooperative order. Practically speak-
ing, however, progress today is blocked by the above-mentioned obstacles.
Another random document with
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no skin off my tail if you don't accept." Lyf half turned toward the T.V.
set.
"I haven't said I wouldn't," Miss Twilley said.
"Nor have you said you would. Now speak up. My time's valuable."
"Oh—very well," Miss Twilley said sulkily. "I accept."
Lyf smiled, reached under his cloak and produced a long sheet of
paper covered with writing. "You're a hard bargainer, Miss Twilley," he
said. "You extracted every condition you could possibly get on a deal
of this kind. My congratulations. This is a personal contract I had
drawn up. It's in English so you can understand it. All you do is sign
both copies. In transactions like this no witnesses are necessary."
"You don't mind if I read it first?" Miss Twilley said. "Not that I don't
trust you—but this is business."
"Not at all," Lyf said "and please note the escape clause which allows
you a peremptory withdraw if you are not satisfied with the basic
services."

Miss Twilley eyed the paper, skipping over the legal jargon, but
carefully reading the specific provisions. It was deceptively simple
and completely binding. But it didn't vary from Lyf's proposals. She
would have ten years of health, wealth and beauty, in return for which
she would surrender her body to Lyf, mardak of Gnoth, to employ as
he saw fit—within certain limits provided by the exceptions. She
sighed. It was fair enough, she supposed. There were a few
exceptions like the suicide clause that allowed Lyf to take immediate
possession if she tried to kill herself, and the war clause which
permitted him to remove her to a safe place for the duration of the
conflict. She shrugged. There didn't seem to be anything wrong with it
except the tone. Somehow it managed to convey the impression of a
property rather than a personal transaction.
"It's always best to keep these things impersonal," the Devi said. "You
sign on the bottom line underneath my cartouche."
Miss Twilley signed.
"And now," Lyf said briskly "there are a few formalities. Not that I don't
trust you, of course, but business is business. Will you please
disrobe?"
"Must I?"
Lyf nodded. "You must. I realize that this is embarrassing for you, but
it would be infinitely more embarrassing if I placed my mark upon you
while you were clothed."
Miss Twilley shivered a little as she reached for the zipper of her skirt.
But she had expected something like this.
Lyf looked at her critically. "You're worse than I thought," he said.
"However, your skeleton seems structurally sound and well
proportioned. Now please turn around."
Miss Twilley had hardly turned her back when a lance of numbing
cold struck her in the base of the spine. She jumped involuntarily as
Lyf's voice came to her ears.
"There—that does it." He walked past her and turned off the T.V. The
black hole winked out, leaving a shattered picture tube where it had
been. "Now that you're a sixth order focal point we can dispense with
this monstrosity," he said. "The automatics on Hel will generate a new
gateway shortly."
"Now what?" Miss Twilley asked. She wasn't sure that she liked the
idea of being a sixth order focus.
"The mark leaves a small red lesion," Lyf said, "but it won't bother
you. However, I should warn you not to attempt to have it removed.
That could be quite painful and perhaps fatal." He moved in front of
her. "I expect that we'd better start therapy right away. That tumor
isn't going to be easy to remove." His eyes were level with her own,
twin pools of clear bottomless green with the darker spots of his
pupils sharply demarcated from the surrounding iris. With mild
surprise she realized that they were oval rather than round, and that
their ellipses were growing—and encompassing her in their inner
darkness.
Lyf eyed her solicitously from a chair next to her bed. There was a
faint proprietory glint in his eyes but his voice was as soft as ever. "It's
all done Enid," he said. "How do you like it?"
Miss Twilley didn't like the use of her first name. It sounded entirely
too familiar, but she supposed that there was little she could do about
it. After all he did have certain rights, even though their full exercise
was some years hence. She stirred sleepily. She was in her own
bedroom and the bed that she had slept in these past eighteen years
was familiar and comforting. Except for the Devi sitting beside her
everything was normal down to the last fold of the flannel nightgown
that covered her.
She felt oddly alive, and somehow different. There was a fullness to
her body and a heaviness to her chest. She looked down and gasped
with surprise and pleasure at the jutting rise of the nightgown. She
had changed!
"That was the biggest part of the specifications," Lyf said with the
faintest hint of amusement in his voice. "Your mental patterns were
extraordinarily precise about some things. About others I had to use
my own judgment. I hope the overall effect meets with your approval."
Miss Twilley felt as excited as an adolescent on her first date. She
slipped out of bed and padded on bare feet over to the vanity in the
corner. Eagerly she eyed herself in the big mirror. Even in the
nightgown she looked good. Her face was still her own but it had
been subtly changed, the features smoothed and rearranged. Her
pale blue eyes were now a smoky gray, and her plain mouse-brown
hair had reddish glints in it and was much thicker than before. It was
a very satisfactory face, smooth and beautiful, and years younger.
Why—she looked barely twenty five!
With a quick movement she bent, grasped the hem of her gown, and
pulled it over her head.
And gasped!
She had never dreamed of looking like this, even in her wildest flights
of fancy!
"Like it?" Lyf asked from his seat in the corner.
"Like it!" she chortled. "I adore it! How on Earth did you do it? You've
not only made me beautiful, you've made me young!"
"I didn't do it on Earth," Lyf admitted. "I took you to Hel where there's
some decent equipment. It wasn't much," he added vaguely, "merely
the application of some rather simple cellular biology—mostly a
rearrangement of DNA molecules and a bit of sarcoplasty. Actually it
wasn't too difficult. The removal of your tumor was much harder.
You'll find that two weeks have gone from your life, but they've been
well spent."
"I should say they have!" Miss Twilley said as she pirouetted slowly
before the glass. Her brows knit in a tiny frown as she saw her only
blemish, a bright red spot at the base of her spine.
"The mark can't be helped," Lyf said, "but it doesn't detract at all. And
it won't show even in a bikini."
"Forty, twenty-four, thirty-six." Miss Twilley breathed. "Lyf—I could
kiss you!"
"I'd rather you wouldn't," Lyf said. "There is, after all, a certain species
incompatibility between yours and mine. Incidentally, you have
perfect health. You'll never know a sick day for the rest of your life
which should be quite long. And I gave you a fine singing voice, and a
mental attitude that will let you use it."
"Thank you," Miss Twilley murmured as she stared at her reflection.
"I've left instructions for your financial operations on your dresser.
Follow them and you'll be financially independent. I think that does it.
Everything is satisfactory, I trust."
"Completely," Miss Twilley breathed, never removing her eyes from
the mirror.
"Then I shall be leaving."
Miss Twilley drew in a deep breath and observed the results with utter
fascination. "Don't you think I'm beautiful?" she asked.
Lyf smiled. "Different worlds, different standards," he said. "Beautiful
isn't quite the word I would use."
"What word would you use?"
"Useful," Lyf said.
"Useful? Hmm. What do you mean?"
"It should be obvious," Lyf said. "But I suppose it isn't. You humans
are a strange lot. You assume. You don't reason. And it always
shocks you to find that your assumptions are wrong."
Miss Twilley looked at him with wide eyes. A cold chill ran down her
spine and poked tingling rootlets of ice into her viscera. "What have I
assumed?"
"Do I have to answer that?"
Miss Twilley blushed. The effect was far more startling this time.
Lyf smiled with an air that would have been infuriating in a human but
was somehow appropriate for a Devi. Miss Twilley sighed. At least
that worry was removed.
"Perhaps I should give you a short synopsis of Devian society," Lyf
said. "It's not like yours. Millennia ago our culture and technology
evolved to the point where individual needs could be satisfied
effortlessly. As a result we were compelled to consider group desires.
Modern society on Hel is composed of enclaves with a community of
interest plus certain ancillary groups that support them. The task of
satisfying the desires of an enclave is infinitely more complex than
satisfying an individual, which gives our civilization the necessary
stimulus to progress.
"One of the reasons we deal with your world is to provide us with
things impractical to produce upon our own. Another reason is
amusement. If only you humans were not so savage we could
perhaps arrange tours of Earth to observe you in your native haunts."
"Is that why—" Miss Twilley began.
He shook his head. "No—the importation of humans for ethnological
studies has long since become a matter of interest only to highly
specialized enclaves. That subject has been exhausted for popular
satisfaction. We have tried to import other species, but they do not
thrive on Hel, and it takes a great deal of trouble merely to keep them
alive. However, your race adapts so readily that even your cultural
variations disappear in a few decades.
"It was this early importation and your ability to survive that has
placed your race in such demand. It is unfortunate, perhaps, that your
species cannot reproduce on our world, but the inhibitors we use to
regulate our numbers also affect yours. Naturally, we can't risk a
population explosion merely to reproduce your race. So we obtain
more of you when necessary."
"Why?"
"Consider for a moment what might be valuable in a civilization that
has no basic needs."
"Luxuries?"
"Precisely. As an ancillary system operator, I supply a luxury item to
my fellow citizens. One that cannot be readily produced by our
techniques. I said I was a mardak, but you never asked what it
meant. You assumed it was a title. It is, but it's professional, not
social. There are no classes on Hel, merely occupations."
"All right," Miss Twilley said reluctantly, "What is a mardak?"
"The closest analogy in your society," Lyf said, "is a dairyman."

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