How China is Winning the Soft Power Battle Across East Asia

With the United States preoccupied by war, nuclear threats in the Middle East and an array of problems elsewhere, a quiet revolution is underway in East Asia as the region adjusts to the reemergence of a great power: China.

The changes underway signal nothing less than the political equivalent of shifting tectonic plates that, over time, will produce a region far more integrated within itself, far more closely connected with China, and — virtually by definition — more distanced from America. Some say that the way events are headed, Beijing will eventually develop a position of dominance with the countries of Southeast Asia similar to the U.S. relationship with Latin American states — a first among equals, the nation whose voice invariably carries the day as much due to its disproportionate size as the validity of its argument.

Jin Canrong, deputy dean of Renmin University's School of International Studies in Beijing, noted one measure of the changing times. Jin recalled that when, in 1993, Malaysian leader Mohammad Mahathir first raised the idea of an East Asian Economic Caucus, Mahathir consulted with Tokyo, not Beijing. But just over a decade later when Mahathir's successor, Datuk Seri Abdullah Ahmed Badawi, contemplated the idea of a 16-nation summit of Asia-Pacific nations, he consulted first with Beijing, not Tokyo. " China is much more active in regional diplomacy now", Jin said.

Evidence of China's deepening involvement in the East Asia-Pacific region is just about everywhere. It's in the fast-expanding trade ties — ties that last year hit $130 billion with the ten Southeast-Asian nations and carry the prospect of continued off-the-charts export growth for the near and medium term.

It's there in the ramshackle northern suburbs of Manila and neighboring Bulacan Province where the Chinese have cleared land to build a $1.2 billion rail line connecting the capital with industrial zones hundreds of miles to the north.

It's in the jaw-dropping size of a $25-billion liquid-natural-gas deal Beijing has signed with Australia or the overall injection of economic growth Australia has enjoyed thanks to trade with China — a boost strong enough that pundits labeled last year's income-tax reduction, "the China tax cut." Some specialists talk of a long-term integration of the Australian and Chinese economies in ways that can't help but influence the security relationships of both countries. And while Australian politicians continue to insist that there would be no question of where Australia's loyalties would be in any direct showdown that forced a direct choice between Washington and Beijing, there are indications that once-clear lines are beginning to blur.*

And it's written on the face of senior Thai Commerce Ministry official Pisanu Rienamhasarn — a trade specialist with perfect English and an advanced economics degree from Duke — who says he now finds Chinese more useful than English. Spread across Rienamhasarn's desk are maps showing progress of a new 1,170 mile-long road project that, when it opens next year, will run from Kunming in southwestern China through the nations of Indochina all the way to the ports of southern Thailand, slashing travel time, boosting trade and binding more closely the destinies of China and its southern hinterland.

Over late-night coffee at his apartment high above central Bangkok's fashionable Sukhumvit Road, Thai Foreign Minister Kantathi Suphamongkhon talked about his government's efforts to transform the national perception of China from that of a rapacious competitor into a partner. "We felt we have to turn China into a partner, a strategic partner," he said.

He described new provincial-level ties now being formed between individual Chinese and Thai regional governments to promote small business contacts and cultural exchanges. And as the evening grew late, Kantathi sketched his vision for Thailand as a country near the heart of an East Asia free trade area that would include not jut neighboring Southeast Asian countries, but also China, Japan, South Korea and, one day, India. These and other factors make the official Sino-Thai pledge last year to triple annual bilateral trade to $50 billion by decade's end more than just propaganda.

The Kunming-Bangkok highway project is part of a far more ambitious Asian Development Bank (ADB) plan to integrate the Mekong River countries of Thailand, Laos, Cambodia and Vietnam with China's southwestern Yunnan Province and its Guangxi autonomous region and also turn the region into a crossroads by eventually reopening an east-west road connecting China and India.

On parts of the east-west corridor already completed, for example, transit time between Thailand and Vietnam has been cut by up to 75 percent, according to Jean-Pierre Verbiest, the ADB's country director for Thailand. While trade between Asia's two giants — India and China — has already jumped sharply in the past few years, Verbiest said that improved logistics and transportation routes would trigger what he called "formidable new growth" in trade between them.

In June, a 200-strong Chinese trade delegation (headed by Commerce Minister Bo Xilai) visiting Manila laid the groundwork for expanded trade and investment ties, reviewing a list of potential projects valued at $32 billion at the inaugural session of the Philippines-China Economic Partnership Forum in areas ranging from agriculture and fishing to tourism, mining and energy.

The two countries recently closed a $1.2 billion nickel mining venture for a Chinese consortium to work in the Surigao area of northeastern Mindanao, in a deal expected to be the first in a wave of Chinese involvement in the mineral-rich Philippines. "We have a reserve [of gold, copper and nickel] worth $1 trillion," President Gloria Arroyo told her resource-hungry Chinese visitors during a discussion of future areas of cooperation.

Such high-profile events are a perfect fit for Beijing's soothing diplomatic message, repeated over and over to countries of the region: China's emergence as a regional power is not a zero-sum game. It is a win-win game for China and its neighbors to the south. Wu Zhengping, a senior commerce ministry official in Beijing, called such development projects in the region "a priority area" for China.

And where is the United States in all this? At the highest levels, understandable distracted as more pressing events in the Middle East and elsewhere soak up time and crowd Asia out. Pulled by events in Sudan and the Middle East, Secretary of State Condoleezza Rice last July (2005) skipped the region's most important meeting of foreign ministers. She delayed by three months a scheduled trip to Australia in January when Israeli premier Ariel Sharon had his stroke and arrived a day late to the Asia Pacific Economic Cooperation (APEC) forum in November, again because of pressing developments in the Middle East.

"There's a perception of negligence or indifference on the part of the United States," said Rodolfo Biazon, chairman of the Philippine Senate's National Defense and Security Committee. Biazon, a former marine general who underwent training at Quantico, VA and is widely viewed as pro-American, said he found U.S. officials eager to talk about terror, but that they preferred to skirt an issue that mattered to him: a 12 percent tariff the United States slapped on Philippine canned tuna that he said was crippling the country's industry. "Terrorism is the only effective link we have [with the United States]. Security, economics, everything else, there isn't much interest."

Ifzal Ali, chief economist at the Asian Development Bank, echoed a similar sentiment: "There's only so much a country can focus on at the same time. I think there's a bit of benign neglect" in America's relations with the region. As an example of this detachment, he cited what he termed "the administration's constant berating" of China to revalue its currency, calling the stance the result of "a very myopic view towards the developments in the region."

But five nations of East Asia and the western Pacific — Thailand, the Philippines, South Korea, Japan and Australia — also share another common bond: All are formal treaty allies of the United States. As such, they form key parts of America's security umbrella for the Asia-Pacific.

China wants to avoid conflict with the United States. As Beijing struggles to control the social dislocation that accompanies its historic transformation from a centrally planned Marxist economy to an energetic free enterprise system, it values above all political stability and trade to keep its economic growth going. America's presence in the East Asia region carries real benefits for Beijing. It constrains Japan and Taiwan, two of China's biggest concerns in the region. It keeps international sea lanes open for the trade China needs to grow and it provides a calming effect that allows nations of the region to concentrate on commercial activity, rather than worry about security.

While there's no confrontation between the two giants, a definite wariness exists between them. Beijing's willingness to offer large and generous contracts — mainly for energy resources in countries such as Sudan and Burma, nations with which Washington has refused on human rights grounds to do business — is one source of tension.

China has worked to dilute American power in the region, not just indirectly through its strong trade ties and soft diplomacy, but also through new multilateral groups such as the six-nation Shanghai Cooperation Organization, the ASEAN+3 group (the 10 ASEAN members states plus China, Japan and South Korea) and, just last year, the 16-country East Asia Dialogue. One thread these groups share is that none include the United States.

As Beijing weaves its web of multilateral contacts, the United States is quietly moving forward with its own hedging strategy of strengthening ties with key neighbors of China as part of a so-called "soft containment." This strategy is focused on three historic adversaries of Beijing: Japan to China's east, Vietnam to the south, and India to the west. In June 2006, Secretary of Defense Donald Rumsfeld traveled to Hanoi to wrap up a bilateral agreement to broaden nascent defense ties to include English-language training for Vietnamese officers. The development is one small, yet significant, additional step in the development of relations between the United States and its one-time enemy.

Amid this diplomatic slow dance, China's importance in the region steadily grows.

Beijing 's stress on cooperation, its talk of integrated development and its aid for some of the region's poorest countries under the fourth generation of leadership headed by President Hu Jintao, mark a dramatic turnaround from decades of chilly, often aggressive, conduct toward the neighborhood. Fuelled by ideological zeal, earlier generations of China's Communist leadership financed small, leftist political parties and fomented unrest to destabilize governments in countries they saw as decadent and reactionary. They dealt with territorial disputes by trying to bully neighbors.

Jin said the change — first outlined in 1996 by Fu Ying, a diplomat who went on to become China's lead negotiator at the Six-Party talks on North Korea and is now Beijing's ambassador to Australia — amounted to China's "escaping from the victim psychology." The leadership realized that as China emerged as a major trading nation, it benefited more than it suffered from the global status quo and should therefore not challenge the existing system but join it, he said.

While China's policy reversal remained anchored in vague, ambiguous language (like "mutual trust" and "mutual benefit") reflecting Beijing's sense of uncertainty, an event shook the region and quickly gave China's leadership the chance to assert its new approach: the 1997 financial crisis.

Traumatic at the time, politicians and specialists today look back at the 1997 crisis as a political watershed for the region. As panic spread across Southeast Asia and speculators fled from an overexposed Thai bhat, Indonesia's financial system wobbled and efforts to defend South Korea's won had virtually depleted that country's foreign exchange reserves, China resisted the chance to devalue its own currency — a move that would have brought in a short-term bonanza for Beijing, but also would have brought several of its neighbors' to their knees. Today, that decision is repeatedly held up in the region as proof that Beijing's approach to its neighbors had changed (in substance as well as in rhetoric) and was driven more by enlightened self-interest than ideology. "I think that was a good reflection of how they have been pursing their policies," Kantathi said. "They've been looking at [the region] as a community and seeing their interdependence with Southeast Asia. That's very encouraging."

By contrast, Asians recall a sense of abandonment by the United States during the scariest days of the crisis. The Clinton Administration's initial reaction was judged both sluggish and cool, as it assessed developments as a regional, not a global, crisis. Later, the administration was viewed as influential in shaping the tough conditions the International Monetary Fund attached to its multi-billion dollar emergency loan packages. People here still remark on a photograph of IMFManaging Director Michael Camdessus standing, seemingly all-powerful, behind a diminished Indonesian president as Suharto signed the loan agreement in Jakarta.

The financial crisis of 1997 was in many ways a psychological turning point for the region — a point where decision-makers recalibrated their views of both the United States and China, and where Beijing saw an opening for a new kind of diplomacy and went for it, helping launch the ASEAN+3 forum just months later. Kevin Rudd, the opposition Labor Party's shadow minister for foreign affairs, trade and security in the Australian parliament, said that APECs failure to address effectively the fallout from the crisis enabled Beijing to launch an alternative forum without either the Australians or Americans. More recently, he said China's success in helping get last December's East Asia Summit of 16 regional countries off the ground resulted in part because "the Bush Administration and the [Australian] government had their eye off the ball."

For many, it's a sign of the times that President Arroyo declared the country's first Filipino-Chinese Friendship Day four years ago and has since ordered the country's universities to offer Mandarin as an alternative foreign language. Although there remains a considerable reservoir of goodwill toward the United States — a long-time ally that ruled the Philippines for the first half of the last century — these moves reflect the arrival of a new power in the region.

Opinion polls conducted in the region consistently find China with a better image than the United States. Even in Anglo-Saxon Australia, arguably America's closest and truest ally anywhere, a survey conducted last year by the respected Lowy Institute found twice as many Australians who considered U.S. policies as a potential threat as those who considered the rise of China a threat. A recent British Broadcasting Corp. survey found that in twenty of thirty countries, a majority of those questioned held a mainly positive image of China, with the highest majorities registered in Asian nations. The same poll found that in only 13 of 31 nations did a majority of participants have a positive image of the United States.

Even the much-heralded American help in the wake of the December 2004 tsunami appears to have done little to revive the U.S. image. A poll released by the Pew Research Center in mid-June on global attitudes found that the number of those holding a favorable opinion of the United States dropped from 38 percent to 30 percent in Indonesia. As recently as 2000, the figure was 75 percent.

In this environment, it's hardly surprising that Beijing has increased its political clout throughout the region. So far, signs of this new influence are hard to spot, mainly because China's leadership isn't asking for much other than political stability and mutually beneficial trading relationships needed to fuel its all-consuming domestic transformation.

Every Southeast Asian country now recognizes China as a "market economy" within the World Trade Organization, a classification Beijing has sought (and the United States has so far refused to grant) in order to help ward off anti-dumping actions. Activities of groups opposed to Beijing's leadership, such as the Falun Gong, have been quietly discouraged in several countries of the region, the Dalai Lama doesn't show up much these days in the region, and there are reports that India and Nepal have started to restrict the activities of Tibetan refugees. In the grand scheme of geopolitics, these are small concessions, mainly tied to Beijing's own domestic agenda. They are made with little political cost for countries of the region, but they are important for Beijing's current number one priority: maintaining domestic stability as it drives ahead with its disruptive internal transformation.

For area specialists both in China and in the surrounding region, the impossible question is what Beijing may want once its internal reforms are complete, its confidence is buoyed and its strength unquestioned. While there are no clear answers to that question today, what remains clear is the shifting power in the region.

"This century of American domination [of Asia]--it's not coming to an end, but it's fading," noted Hal Hill, a Southeast Asia economist at the Australian National University in Canberra. "That's inevitable with China's growth." The ADB's Ali echoed Hill's assessment: "Given the size of the United States, it will remain a dominant trading partner," Ali said, "but the dominance of the U.S. will gradually recede."

* Senior officials in Canberra confirmed in interviews that Australia declined to participate in the initial sessions of a small, informal group of countries (that included Britain, the United States and New Zealand), convened in the wake of Hong Kong's return to China to discuss changes in the East Asia-Pacific region, in part because the forum gave the impression of "ganging up" against China. It has since joined the group, which Australian officials said has never met above the level of political directors.