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Story Publication logo August 14, 2006

China Poised to Dominate Influence in Asia


Media file: china_flag.jpg

Tyler Marshall reports on the prodigious spread of China's geopolitical influence across southeast...


BANGKOK -- The maps spread across the desk of senior Thai Commerce Ministry official Pisanu Rienmahasarn show the progress on a new 1,170-mile-long road project that will run from Kunming in southwestern China through Laos and on to the ports of southern Thailand.

When it opens next year, the road will slash travel time, boost trade, and bind more closely the destinies of China and its neighbors to the south. It's just one example of Southeast Asia's deepening relations with China, explaining why the Thai bureaucrat, a trade specialist with perfect English and an advanced economics degree from Duke University, says he now finds Chinese more useful than English.

With the United States preoccupied with war and nuclear threats in the Middle East, China is emerging as the great new power of 21st century East Asia -- and pulling longtime American allies into its embrace.

While China's influence is growing throughout East Asia, and as far north as Japan and South Korea, Beijing's impact seems particularly strong in the Southeast Asia-Pacific region, including countries such as Thailand, the Philippines, and Australia that gravitationally have been among America's strongest allies.

Some specialists predict that Beijing will eventually develop a position of dominance with the countries of Southeast Asia similar to the US relationship with Latin American states -- a first among equals, the nation whose voice invariably carries the day as much because of its disproportionate size and power as the strength of its argument.

Economically, China is both the fastest-growing trade partner for most countries in the region as well as the one they believe will play the biggest role in their future. Politically, Beijing is weaving a network of regional groups and organizations that will add to its clout in the area. And it is doing so with a newly cooperative tone that is generating a spirit of goodwill.

China is still considered too weak militarily and too preoccupied with the task of completing its internal transformation -- from a centrally planned economy to one of the world's biggest free markets -- to provoke a confrontation with the United States anytime soon.

And many believe it would not be in China's interest to do so anyway, since the changes taking place are not a zero-sum game; the United States won't necessarily have to concede ground as China deepens its relationships with longtime US allies in the region. Indeed, these countries see strong political and economic relationships with both China and the United States as advantageous to all.

Evidence of China's deepening involvement in the region is just about everywhere.

Trade with Southeast Asian nations last year grew by 20 percent, to top $130 billion and holds the prospect of double-digit export growth for years to come. After Spain and Japan dropped out, China stepped in to finance a $1.2 billion rail line in the ramshackle northern suburbs of the Philippines' capital, Manila, and neighboring Bulacan Province that will connect the capital with industrial zones hundreds of miles to the north.

Wu Zhengping, a senior Commerce Ministry official in Beijing, called such development projects in the region ``a priority area" for China.

In May, the first shipment of a $25 billion liquid natural gas deal Beijing forged with Australia arrived in China, part of an economic expansion 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 international political experts talk of a long-term integration of the Australian and Chinese economies that will likely shape the way both countries view their security interests.

Some analysts are nervous that Australia, for example, might be tempted to interpret its treaty obligations with the United States more loosely in a confrontation between the US and China over Taiwan.

A new study on China's ties in Southeast Asia conducted by Australia's prestigious Lowy Institute for International Policy in Sydney concludes: ``We should be aware that countries in the region will increasingly frame their policies in ways that are in tune with China's policies."

Added Nicholas Lardy, a senior fellow at the International Institute of Economics in Washington and one of the world's leading authorities on China's economy: ``I don't think there's a country in the region now that doesn't make a decision on political matters without reference to the fact that China looms increasingly large for their economies."

As these changes unfold, the United States has been focused elsewhere. Pulled by events in Sudan and the Middle East, Secretary of State Condoleezza Rice last July skipped an important meeting of foreign ministers in the region. She delayed by three months a scheduled trip to Australia in January when Israeli premier Ariel Sharon had a stroke, and arrived a day late to the Asia Pacific Economic Cooperation forum in November because of pressing developments in the Middle East.

Rice has made four trips to the East Asia-Pacific since she became secretary a year and a half ago, and Secretary of Defense Donald Rumsfeld has visited the region more frequently in the past year. But politicians and foreign affairs specialists in Southeast Asia -- including those who count themselves among America's closest friends -- say these visits have done little to dilute the broadly held view that the Bush administration is looking elsewhere.

``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, who is widely viewed as pro-American. ``Terrorism is the only effective link we have. On defense, economics, everything else, there isn't much interest."

Speaking at the opening of a congressional hearing in May in Washington on the implications of the rise of China, the House's International Relations Committee chairman, Henry Hyde, an Illinois Republican, summed up the concerns of many watching developments in the region: ``I fear that a future American generation may awaken from its Pacific slumber to find our influence removed entirely from the Asian mainland."

Beijing's stress on cooperation, its talk of integrated development, and the beginnings of targeted investment as an economic assistance tool for some of the region's poorest countries mark a dramatic turnaround from decades of chilly, often aggressive, conduct toward the neighborhood that characterized China's diplomacy during the 1950s and '60s.

In those Bamboo Curtain years, Communist China did its best to foment unrest in the region, hoping to destabilize governments in countries it saw as decadent and reactionary.

Now, Beijing's influence is driven heavily by its economic muscle, but its growing ties to countries in the region are also expanding into other areas. Student exchanges, for example, have grown -- at least in part because of the tough immigration rules since the Sept. 11, 2001, attacks that have reduced the flow of foreign students into the United States. Chinese scholars unable to enter the United States to study now often choose Australia, while Thai students blocked from access to American colleges instead choose to study in China.

Mandarin Chinese has gained new popularity as a foreign language throughout the region, with the Philippine government requiring state-run schools to offer it as an elective.

Chinese tour groups flood the grounds at the Thai Royal Palace in Bangkok, and Chinese language guides there say the number of groups continues to grow briskly.

Michael Johnson, Australia's first ethnic Chinese member of parliament, remarked on the tourist influx to his country, noting that when he looks up from the floor of the parliamentary chamber at the gallery, ``It's quite often about one-third full of Chinese visitors. Little signs like that reflect increasing links between the two countries."

The changes in a region dominated for decades by American power are unfolding without heavy rhetoric, threats, or violence because neither the United States nor China wants a confrontation and both see benefits for themselves.

American companies and consumers gain from the lower-cost production that helps drive Southeast Asia's growing economic ties with China. Beijing, which desperately needs stability and security for its domestic modernization to succeed, gets both from America's military presence in Asia -- a presence it sees as both a restraint on a resurgent China and an unpredictable Taiwan.

``In all the meetings we've had with the Chinese, they are not attacking or criticizing the United States or trying to ease us away from the US," said Alexander Downer, the Australian foreign minister.

Still, a more subtle wariness exists between China and the United States.

Beijing is negotiating a flurry of free trade agreements with countries of the region and has also embraced an array of new regional multilateral organizations over the past decade, none of which include the United States. At the same time, the United States is beginning to strengthen ties with key neighbors and traditional adversaries of China, including India, Japan and Vietnam. Some of these are still low-key initiatives, such as offering English-language training to Vietnamese military officers.

Amid this diplomatic slow-dance, China's profile in the region continues to grow.

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 an ally.

``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 regional governments in China and Thailand to promote small business contacts and cultural exchanges. Kantathi also sketched his vision for Thailand as part of a free trade area that would include not just neighboring Southeast Asian countries, but also China, Japan, South Korea, and, one day, India.

China's involvement in the Philippines is also growing quickly.

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

The two countries recently closed a $1 billion-plus 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.

In gold, copper, and nickel, ``We have a reserve worth $1 trillion," President Gloria Macapagal Arroyo told her resource-hungry Chinese visitors in June during a discussion of future areas of cooperation.

Such high-profile events are a perfect fit for Beijing's diplomatic message, repeated to countries of the region: China's emergence as a regional power does not have to come at the expense of its neighbors -- or the United States.

``We're trying to create a win-win situation for everyone in this region," said Wu, the Chinese commerce ministry official.

One measure of Beijing's revamped image in the region is the blossoming of pride and confidence within overseas Chinese communities through much of East Asia -- communities that historically have suffered discrimination.

Flaunting their ethnic Chinese roots, both Thai premier Thaksin Shinawatra and former Philippine President Corazon Aquino have made high-profile visits to their ancestral homes during official visits to China.

In Thailand, about two-thirds of the Parliament is of Chinese origin -- as were the last three prime ministers. These developments reflect a dramatic reversal of xenophobic attitudes that prevailed in both countries barely a generation ago.

For area specialists both in China and in the surrounding region, the real questions ahead are: What will Beijing want once its internal reforms are complete, its confidence buoyed and its strength unquestioned? And how well positioned will the United States be to respond to an emboldened China ?

Few of those tracking events in the region have doubts about the overall direction.

``This century of American domination -- it's not coming to an end, but it's fading," said Hal Hill, a Southeast Asia economist at the Australian National University in Canberra. ``That's inevitable with China's growth."

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