The Post Cold War Order in Asia and the Challenge to ASEAN 9789812306418

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Asia & Pacific Lecture Series, no. 4

THE POST COLD WAR ORDER IN ASIA & THE CHALLENGE TO ASEAN

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted problems of stability and security, economic development, and political and social change. The Institute’s research programmes are the Regional Economic Studies Programme (RES including ASEAN and APEC), Regional Strategic and Political Studies Programme (RSPS), and the Regional Social and Cultural Studies Programme (RSCS).

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Michael Yahuda THE POST COLD WAR ORDER IN ASIA & THE CHALLENGE TO ASEAN

INSTITUTE OF SOUTHEAST ASIAN STUDIES

Published in Singapore in 2006 by Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 E-mail: [email protected] Website: http://bookshop.iseas.edu.sg All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2006 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions expressed in this publication rests exclusively with the author, and his interpretations do not necessarily reflect the views or the policy of the Institute or its supporters.

Cataloguing in Publication Data Yahuda, Michael B. The post Cold War order in Asia & the challenge to ASEAN. (Asia-Pacific lecture; no. 4) 1. East Asia—Foreign relations. 2. East Asia—Politics and government. 3. Great powers—Southeast Asia. 4. National security—Southeast Asia. I. Title. DS501 I5992 no. 4 2006 ISBN 981-230-358-8 Typeset by Superskill Graphics Pte Ltd Printed and bound in Singapore by Seng Lee Press Pte Ltd

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CONTENTS

Introduction 1 The Impact of the End of the Cold War in East Asia 3 The Question of Regional Stability 14 The Impact of the Great Powers on Security in Southeast Asia 29 Conclusion 38 About the Author 43

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This paper was delivered by Professor Michael Yahuda, Elliott School for International Affairs, George Washington University, at the Fourth Asia and Pacific Lecture organized by the Institute of Southeast Asian Studies in Singapore on 24 August 2005.

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The Post Cold War Order in Asia and the Challenge to ASEAN

Introduction I shall argue that the current dynamics of the relations between the United States and the regional great powers of East Asia provide Southeast Asia with an external environment of relative stability. The regional great powers are engaged in a complex pattern of competition and cooperation within a framework of security and economic public goods provided largely by the United States. However, the long term durability of this pattern of relationships is open to doubt, both because of considerable uncertainties about the evolution of the domestic order in the major regional powers and because of the potentially disruptive character of SinoJapanese relations. Meanwhile the possibility 1

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of the eruption of a damaging crisis between China and the United States cannot be ruled out either. Regional stability may be seen to be multilateral and multi-tiered. American structural power (which will be explained below) provides the basis on which the major regional powers can focus on economic growth and development even as they both cooperate and compete with each other. That is accompanied by the expansion of regional organizations based on the ASEAN style of consensual and non-legally binding norms. Given the distrust between the major powers and concern about possible American dominance, nominal leadership of these regional associations by default is assumed by ASEAN. Regional security, however, depends not only on the existence of a relatively benign external environment, but it also requires of each of the countries to continue to develop their economies, to practise effective governance and to maintain social stability. These requirements, of course, are not found in all the countries of Southeast Asia and they are threatened by so-called “nontraditional” security such as transnational criminal net-works, terrorism, the risks from 2

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infectious diseases, maritime piracy and so on. I shall argue that the Southeast Asian countries have what might be called a strategic opportunity to work better together to establish their regional economic community and to institutionalize their cooperation in the management of non-traditional security threats. Otherwise the Southeast Asians may be marginalized by the economic rise of both China and India and their security threatened by the disruption of relations between the external major powers. The Impact of the End of the Cold War in East Asia The origins of the new pattern of great power relations in East Asia go back to the ending of the Cold War. In comparison paid with the attention paid to the changes wrought by the end of the Cold War in Europe, the impact of the disintegration of the Soviet Union on East Asia has tended to be overlooked. Perhaps the impact seemed less significant, for unlike their European counterparts, none of the East Asian communist governments fell and again, unlike Europe, the American series of bilateral alliances seemed little changed. However, although the impact of the collapse of the Soviet Union was less immediate and perhaps 3

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less thorough-going in Asia it has nevertheless had a profound effect. In ideological terms it spelt the abrupt end of socialism or communism as a rallying cry for either the remaining communist regimes or for opposition parties or groups in East Asia. Similarly the Soviet command economy lost whatever remaining allure it might have had, thereby leaving the ground for capitalism as the only effective economic model. These two developments alone have contributed greatly to the deterioration of relations between China and Japan. As China’s leaders sought to reach out to their people after the Tiananmen disaster they couched their appeals in the early 1990s entirely in the language of patriotism or nationalism. Even the remnants of socialist rhetoric evident in the 1980s had disappeared. The CPC depicted itself as the national saviour of China. It had defeated Japan, the last and the most brutal of the aggressors that had torn China apart during the century of shame and humiliation. The victory in the civil war that had underpinned much of Mao’s claim to legitimacy was no longer mentioned as by this time the CPC leaders were seeking to win over the KMT in Taiwan. The CPC presented itself as the only force that could 4

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complete the unification of China and that could provide the necessary stability to develop the economy so as to make the country rich and powerful once again. The defeat of Japan became central to the CPC’s claim to legitimacy and to its campaign of education in patriotism, especially in 1993– 95.1 In the new national identity that was being forged Japan became the significant “other.” As for Japan, the disintegration of the Soviet Union and all that it stood for resulted in the collapse of the Socialist Party as a major force in Japanese politics. Although condemned for most of its life to permanent opposition, the Socialist Party had played a crucial role in upholding the pacifistic tendency in Japan and in providing opposition to the alliance with the United States and to the capitalist system. It regularly commanded a sufficiently large percentage of voters so as to limit the power of the majority party, the LDP. Shorn of its underpinnings the JSP did not collapse overnight and it finally

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Zhao Suisheng, A Nation State by Construction: Dynamics of Modern Chinese Nationalism (Stanford University Press, 2004) and Joseph Fewsmith, China Since Tianmen (University of Cambridge Press, 2001).

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disappeared as a significant element in Japanese politics after its brief share of power in a coalition government in 1995.2 The death knell of the JSP meant that the mainstream of Japanese politics shifted to the right at a time when Japan too was reshaping its national identity. Henceforth there was no longer support for the so-called “friendship diplomacy” with China according to which Japanese leaders and diplomats displayed acute sensitivity to the sensibilities of their Chinese counterparts in the 1970s and 1980s. Amid rising nationalism in both countries and in response to a series of incidents deemed to be provocative by the other side, whether to do, for example, with Japanese evasion of historic wrongs or Chinese naval incursions into Japanese waters, public perceptions of each other began to harden. In the 1980s opinion polls conducted by the Cabinet Office showed that up to 80 per cent of Japanese had friendly feelings towards China, whereas by 2004 the figure was down to just under 38 per cent. According to polls conducted by

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Gerald L. Curtis, The Logic of Japanese Politics (New York: Columbia Univeristy Press, 2000).

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the Chinese Academy of Social Science only 28.5 per cent claimed to like Japan.3 The fall of the Soviet Union meant the end of the bipolar system and its axis of conflict that had provided the means for linking international politics with those at regional and local levels. As a result international politics became more fluid and more space became available for the development of regionalism and regional institutions. It was surely no coincidence that the proliferation of regional institutions in East Asia began around that time. Similarly, the end of the Cold War removed one of the main barriers to the expansion and intensification of globalization, especially in economics. That was and continues to be of benefit especially to this region as a whole and to China and India in particular. At the same time globalization puts continual pressure on countries to continue to reform their domestic institutions and to adjust their policies to meet the demand of ever changing economic circumstances. It also requires governments sooner or later to respond to

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Japan Times, 20 December 2005; and http://chinadigitaltimes.net/ 2004/11antijapanese_fe.php. Accessed 31 July 2005.

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the accompanying rapid social change. Much as it underpins the rise of China and India, globalization carries within it the potential for instability and uncertainty. The end of bipolarity also led to a repositioning of the regional great powers in Asia. The United States emerged as the sole superpower with its global predominance enhanced in terms of structural power. In Susan Strange’s terms this meant that the United States was the dominant leader in what she called the structures of security, finance, production and knowledge (i.e., advanced technology etc.).4 Although this was not immediately apparent in the early 1990s amid the talk of American decline and possible withdrawal from East Asia, by 1995 the extent of American dominance had become indisputable. By that point even the Chinese recognized that their aspiration to operate within a multipolar world could no longer be realized in the near future. However, the possession of structural power does not necessarily translate into the capacity to use that power in purposive ways. As one of China’s leading experts on international

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Susan Strange, States and Markets (London: Pinter Publishers, 1988).

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relations has pointed out, American primacy should be distinguished from specific American policies.5 Since the end of the Cold War successive American administrations have been content to act as they see it as a stabilizing force within the region. They have not sought to resolve the various disputes between states, but rather they have been content to contain them. Arguably, the lack of resolution of disputes involving the major regional powers in particular serves the American interest by keeping them divided and less inclined to challenge American preponderance. As for the lesser states American power does not challenge their territorial or security interests, as it is mainly focused on serving America’s larger geopolitical interests. Meanwhile its security presence in the region provides a hedge against major regional powers whose interests may be more threatening.6 Consequently, the so-called “American hegemony” ostensibly opposed by the Chinese may actually serve their interests as it provides a reassurance

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Wang Jisi, “China’s Search for Stability with America”, Foreign Affairs (September/October 2005). 6 Michael Monastando, “Incomplete Hegemony” in Asian Security: Instrumental and Normative Features, ed. Muthiah Alagappa (Stanford University Press, 2003) pp. 152–53.

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that enables Southeast Asian countries to engage China more closely. It is within the context of American primacy that the major regional powers began to reposition themselves in the wake of the demise of the Soviet Union. They differ greatly from each other in terms of their levels of economic development, political systems, military capabilities and their capacity to influence developments in East Asia and Southeast Asia in particular. The four powers, China, Japan, Russia and India have developed over the last fifteen years a pattern of relations in which they both cooperate and compete with each other. Neither collectively nor separately are the four prepared to confront the United States. Despite the rhetoric of opposition to hegemony that Russia and China and occasionally India issue in joint meetings between their leaders, they all recognize that in practice they need to cooperate with the United States if they are to achieve their fundamental goals of economic development. In sum they need the United States more than they need each other and they cannot afford to alienate it. Operating within the framework of American structural power sets limits or constraints on the extent to which potential 10

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rivalry could be developed. For example it militates against the prospect of open warfare between the major powers. The Americans could intervene with decisive effect for one party or the other. Alternatively, the Americans could seek to mediate and thereby enhance its power over both. In either event the parties would risk weakening themselves, damaging their economies and even undermining their own governments to no good purpose. Besides which, it is not in the American interest for major conflict to break out in East Asia and the United States has already taken steps to prevent that from happening. For example, President Bush intervened personally in 2001 to prevent warfare over Kashmir between India and Pakistan and again in December 2003 to prevent Taiwan from taking steps towards formal independence that would unilaterally have altered the status quo across the Taiwan Straits. The end of the Cold War also contributed to the loosening of the American alliances in East Asia, even though steps were taken to renew and enhance them. Since the American alliance system was based on a series of largely separate bilateral treaties, there were no institutional means of 11

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coordinating them and once the disciplinary bonds of bipolarity had been removed the differences between American global concerns and the local interests of the Asian allies began to manifest themselves more clearly. This is true for even such close allies as Australia and Japan. It is not at clear, for example, that Australia would come to America’s aid in the event of conflict in the Taiwan Straits.7 Japan has found that while it is expected to come to the aid of its ally in its conflicts in Afghanistan and even Iraq (which was not even sanctioned by the UN), it cannot look to help from the United States in its dispute with Russia over the so-called “northern territories” and it is a moot point as to whether the United States would help Japan in any conflict with China in the East China Sea. Interestingly, the American Japanese treaty obligates the United States to lend military support to Japan in the event of conflict in territory administered by Japan and it should be noted that Japan claims to administer the Senkaku Islands also claimed by China and Taiwan as the Diaoyu Dao. 7

The Australian Foreign Minister, Alexander Downer, appeared to raise doubts about this in the course of his visit to China in 2004 and the Chinese Foreign Minister specifically warned Australia that if Taiwan were included within the framework of its alliance with the United States China would consider that an infringement on its sovereignty, Xinhua, 8 March 2005.

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Additionally, the Japanese found that despite its professed support for Japan’s bid for a permanent seat on the UN Security Council, the United States in effect scuttled the bid by openly opposing the diplomatic course chosen by Japan of working with the other three claimants, Brazil, Germany and India. 8 Differences between the Japanese and American allies may be seen in the diplomacy regarding North Korea: The United States does not share the priority given by their ally to the problem of the abduction of Japanese citizens about whom the North has yet to give a full and satisfactory account. The differences between America and its South Korean ally are even more pronounced, where the local aspiration to engage the North is not shared by their American ally. Indeed the South has indicated that it would refuse to carry out economic sanctions against the North even though the Americans have indicated a preference for that as a means of bringing pressure to bear on the North. Moreover the South Korean government has insisted that American forces based in Korea would not be allowed to be used in the event 8

Japan then announced the withdrawal of its bid for lack of sufficient support within the UN. Straits Times, 22 August 2005.

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of conflict elsewhere in the region. Indeed in both South Korea and Japan there is growing local opposition to the terms on which American forces are based there and even to having the bases stationed in their countries at all. There is no question of the Americans being asked to leave at this point, but local hostility and the broader post Cold War environment indicate that their continued existence cannot be taken for granted. The Question of Regional Stability Notwithstanding the looser character of the American bilateral alliances, its alliance with Japan is regarded as the bedrock of the American strategic presence in East Asia. Indeed its significance is seen in the United States as global and not just regional. The alliance has been strengthened so that once again it is seen by both Washington and Tokyo as the linchpin of the provision of security to the region as a whole. Japan’s Cold War passivity has ended so that it is now able to provide effective logistic and rear services support to American forces engaged in conflict within the region and beyond. Spurred by dissatisfaction with what was deemed to be unsatisfactory support in the first Gulf War in 1991 and in the first Korean crisis of 1993–94 14

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Japan agreed at the prodding of the United States to set new defense guidelines in 1996 and 1997 to replace the out-dated ones from the Cold War. Potential public opposition to the government’s readiness to go beyond the more restrictive interpretations limiting its potential use of its Self Defense Forces (SDF) was reduced by the adverse reaction to the Chinese attempt to intimidate Taiwan by the firing of missiles, some of which landed less than 60 miles from Japanese waters. The steady progression of the passage of new laws to allow more active military support for the United States, especially in the wake of 9/11, had an inherent logic of adjusting the alliance to meet the new circumstances of the post Cold War period, but they also gained support within Japan in reaction to the perceived rising military challenge from China and the new threat from North Korea as exemplified by its firing of a missile into the sea beyond Japan in 1998. This does not mean, however, that Japan has developed what might be called a national security perspective by which foreign policy could be guided by strategic and balance of power priorities. Evidence of this may be seen from the failure of the Japanese government to cultivate better relations with South Korea and with Russia 15

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so as to improve its leverage in managing relations with China. At this point I should consider the growing rivalry between Japan and China that appears to have intensified since the turn of the 21st century. Mention has already been made of how the development of their respective nationalisms in the early 1990s after the demise of the Soviet Union, “the socialist motherland” sharpened their mutual antipathies. History has become the new trigger for their respective nationalisms. It is a history that is highly selective and is designed to serve political purposes. The younger generation in China who are further removed than their elders from the actual realities and complexities of the occupation period appear to be even more intense and focused in their anger against the Japanese.9 It has also been suggested that the antiJapanese demonstrations serve also as a focal point for the socially disaffected who have no other means of registering their discontent. 10 In any event these

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Peter Hayes Gries, China’s New Nationalism (Stanford University Press, 2004). 10 Interview with a senior official of the Japanese Ministry of Foreign Affairs, 10 June 2004.

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demonstrations and the hatred they manifest have a negative impact in Japan, especially for the generations that have no memories themselves of the war that ended 60 years ago. Ironically the Chinese protests make younger Japanese even more receptive to conservative Japanese who seek to inculcate greater pride in the nation by downplaying responsibility for the war and glossing over the terrible atrocities committed by Japanese soldiers. In constantly demanding apologies and recantations the Chinese government is seen by the Japanese side to be playing politics with the issue. It is not even clear what form of apology would satisfy the Chinese. To this must be added the fact that despite their long history of relations as neighbours across the sea they have never before encountered each other as roughly equal great powers. They lack any historical reference points for managing relations where the one is not regarded as the superior of the other. For most of recorded history China was regarded as the superior to whom Japan ritually deferred as the centre of civilization, even though that was not honoured in practice for most of the last thousand years. Since the defeat of China in 1895 the tables were turned, much to the resentment of most Chinese. By 17

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the time that Tokyo recognized Beijing in 1972 Japan had become the world’s second largest economy, while its military was kept corked in the proverbial bottle by its American ally. Following Chiang Kai-shek’s example nearly 20 years earlier, Mao refused war reparations. Then began a period of what was called “friendship diplomacy” by which the Japanese were highly deferential to Chinese sensitivities and devoted a good proportion of their ODA to China, that many saw as in lieu of reparations. From 1972 the two were more or less aligned with America against the Soviet Union until its demise in 1991. It was not until then that two great powers of East Asia had to face each other as roughly equal great powers. Japan, which lacked domestic institutional arrangements for managing national security issues common to other great powers, certainly lacked the mechanisms for discussing grand strategy with China. In fact neither Japan nor China has identified their precise national security interests in such a way as to acknowledge those of the other. In so far as there is a strategic triangle involving China, the United States and Japan (as attested by many Japanese and American scholars) the line of the triangle connecting Tokyo and Beijing is much less 18

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distinct that the two connecting each with Washington. As far as can be ascertained, there is no strategic dialogue between China and Japan. The meetings that do take place between the two sides to discuss military and related matters appear to be confined to addressing particular issues of dispute arising from specific incidents rather than to the larger strategic picture. Meanwhile both sides profess concern at what they regard as the excessive military spending of the other. Their mutual distrust is also fueled by the sense that their respective trajectories are moving in opposite directions. China is very much the power on the rise and the United States is seen as the main challenger to its ascent to ever greater significance as a regional and global power. In the longer term Japan is seen in Beijing as destined to play a lesser role. A People’s Daily commentary last year expressed the mainstream Chinese view very well, when after a survey of the debate on reforming the constitution and of the new activism of the SDF it concluded that it was in “its own best interest as well as that of the region that Japan continues its pacifist policies.”11 Japan by contrast see itself as the major economic 11

Carried in the China Daily, 18 February 2004.

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power of the region, which has played the key role in encouraging economic development and political stability, that is now in danger of being by-passed by the sudden rise of China. Interestingly, the deterioration of their relations has been accompanied by an expanding and deepening economic interdependence between the two sides. Last year in 2004 China accounted for 20 per cent of Japan’s foreign trade making it its leading trading partner for the first time. The value of their trade had grown at a remarkable rate, according to Chinese figures rising from $12 billion in 1990 to $83 billion in 2000 and then $168 billion in 2004. The value of Japanese FDI in China had reached an accumulated total of $66.6 billion by the end of 2004. Since 1979 the accumulated total of Japanese ODA came to $32–34 billion. Quelling fears of a possible “hollowing out” of the Japanese economy the nationalistically minded Prime Minister Koizumi told the Bo’an Forum in 2002 that his government regarded China’s economic development as a challenge and opportunity and not as a threat. In fact the recent recovery of the Japanese economy after the stagnation of the 1990s has been attributed to the impact of the Chinese economy. 20

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The economic interdependence has also been accompanied by increasing interactions between the two societies. In recent years tourism has grown by leaps and bounds. In 2003 over 2.5 million Japanese visited China and 800, 000 Chinese visited Japan. In 2004 the Japanese figure passed the 3 million mark and the Chinese exceeded 1 million. Educational exchanges have also been significant. The Japanese government issued over 58,000 visas to Chinese students to pursue course of study at the tertiary level and they accounted for some 62 per cent of the total of all foreign students. Some 13,000 Japanese students went to China.12 This interdependence flies in the face of what liberal theory would have expected. No significant business or regional groups have developed on either side of the East China Sea to defend themselves against the loss that might result from the deterioration of political relations. In Japan there has been no equivalent to the various American business pressure groups that have successfully ensured that relations with China

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The statistics are drawn from the official websites of the two foreign ministries and the Japanese Ministry of Education.

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should not be unduly damaged.13 When the former head of Fuji publicly recommend in 2004 that Koizumi desist from attending the Yasukuni Shrine to minimize the deterioration of relations with China, he was pilloried and received death threats. More recently, senior members of the LDP have advised Koizumi not to visit the Shrine, but he has rebuffed their arguments.14 Similarly in China two well known scholars who advocated in print “new thinking” on Japan also became the objects of public vilification.15 The main effect of the overwhelming importance to both sides of their economic interdependence can be seen from the way in which the two governments are continually engaged to in exercises of damage limitation. Japan has been seeking to assert a more significant role for itself in international affairs since the early 1990s, but there has been no question but that in military terms at least this is being done within the framework of

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For an attempt to explain this failure of liberal theory see my chapter, “The limits of economic interdependence: Sino-Japanese relations”, in New Directions in Chinese Foreign Policy, ed. Alastair Iain Johnston and Robert S. Ross (Stanford University Press, forthcoming). 14 AFP, “Time to stop shrine visits party veteran tells Koizumi”, Straits Times, 13 June 2005. 15 Peter Hays Gries, “China’s New Thinking on Japan”, China Quarterly (forthcoming 2005).

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the security alliance with the United States. There is no immediate prospect of the Japanese being able to project significant power or to be able to acquire an effective nuclear deterrent without significant contributions from the United States. 16 Nevertheless from a Chinese perspective the significance of the new phase of the American Japanese alliance is that it is no longer about keeping the cork in the proverbial bottle of the Japanese military, but about morphing Japan into an active military partner of the United States in East Asia. The Chinese, not surprisingly, were angered by the joint statement of the American and Japanese foreign and defense ministries in February 2005 which listed the desirability of a peaceful settlement of the Taiwan problem among their twelve strategic objectives. However, the Chinese could not have been taken entirely by surprise as they had long claimed to be worried by Japan’s interest in its former colony of Taiwan and by the studied ambiguity of Japan’s stated commitment to contribute to

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Christopher W. Hughes, Japan’s Re-emergence as a “Normal” Military Power, Adelphi Paper 368-9, (Oxford University Press for IISS, London, November 2004).

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the defense of the area around Japan.17 In strictly military terms the openly professed Japanese interest did not really change the balance across the Taiwan Straits. The major problem for China’s military planners remained how to deter an American intervention. Yet the implications of possible Japanese intervention in support of the Americans obviously adds a further complication from Beijing’s perspective and to that extent the “2+2” statement may add a further weight in the balance against a decision to resolve the Taiwan issue by force. At this point it is appropriate to consider briefly the role of China, as its rise is generally regarded as the principal development which is changing the balance of power in East Asia. Indeed the significance of the rise of its economy is already felt throughout the world and within East Asia in particular. China has been a particular beneficiary of the demise of the Soviet Union, even though it was a salutary shock to its communist leaders for whom the most important priority is the maintenance of communist party rule. From a geopolitical point of view, the disintegration 17

See the Chinese official reactions to the new Japanese–American guidelines of 1996 and 1997.

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of the Soviet Union freed China for the first time in more than 150 years of the possible threat of invasion from the north. China gained the tranquil international environment that its post Mao leaders had long sought so as to enable the country to better focus on the principal goal of developing the economy in pursuit of the wealth and power that would restore China to the greatness its people thought it deserved and that would justify communist party rule. Unlike contemporary Japan, China has long had the political outlook and the institutional means to coordinate the different strands of foreign relations so as to pursue a purposive and focused foreign policy based on defined strategic objectives. Hence it was possible for the Chinese to develop fairly rapidly a sophisticated regional diplomacy that led to the resolution or diffusion of long standing border disputes with Russia, India and Vietnam and, which enabled China to utilize its fast growing economic influence among its neighbours to serve its political goals.18 China’s leaders claim that the post 18

For accounts of this diplomacy, see Evan Medeiros and M. Taylor Travel, “China’s New Diplomacy”, Foreign Affairs (November/ December 2003) and Avery Goldstein, “The Diplomatic Face of China’s Grand Strategy”, China Quarterly no. 168 (December 2001), pp. 835–64.

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Cold War environment provides their country with a strategic opportunity to develop its economy and expand its comprehensive strength in the next twenty to thirty years. Nevertheless for China too, nationalism or patriotism has proved a mixed blessing in the conduct of its foreign relations. Having persuaded themselves and the Chinese people that the patriotic enterprise is incomplete without unification with Taiwan, China’s communist party leaders have created a huge obstacle for the attainment of their major goals. Although it has been the trigger for the modernization of their armed forces and in that sense contributed to the emergence of their country as a major power, the Taiwan issue also pits China against America and alarms its immediate neighbours. As China’s leaders see it they have to mobilize sufficient military force not only to deter the Taiwanese from proceeding towards formal independence, but also to deter American forces that might come to their aid. Additionally their readiness to use force if necessary to prevent the separation of Taiwan from the Mainland must be sufficiently credible to persuade all concerned that the leaders are prepared to risk the enormous damage to their economy and society that 26

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might accrue. Given the American commitment to Taiwan many in China believe that the American goal is to keep their country divided and thereby curtail China’s rise to the global great power status it craves. The stakes involved are high and although none of the parties seeks military conflict the courses of domestic politics on both sides of the Straits could easily unsettle the status quo and lead to conflict by misadventure. Whereas the Chinese position regarding the North Korea nuclear problem — the other major crisis point in East Asia, provides a telling difference. The emotional dimensions of nationalism and unification do not arise and as a consequence China’s leaders have been able to handle the problem with great diplomatic skill. The Americans credit the Chinese side with playing a major part in preventing open military conflict in 1993–94, prior to the ill-fated Framework Agreement and then again in convening the Six Party Talks since 2003. There is little need to dwell here on the significance of the other two major powers, Russia and India. Russia’s role as a major power is more tangential in East Asia, but it is not without significance as a major arms 27

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supplier, that has contributed greatly to the modernization of the Chinese military and in changing the balance of military power across the Taiwan Strait. It is also a major factor in balancing oil politics between China and Japan in Northeast Asia and of course it is a key player in the politics of Central Asia. The military exercises conducted with China in June 2005 indicate a potential to contribute to Chinese aims of balancing against American power. However previous Chinese experience of their strategic partnership with Russia should prove salutary. Earlier in the 1990s the partnership with Russia stressed common opposition to the American policy of developing a ballistic missile defense system as symbolized by the refusal to abrogate the 1972 Anti-Ballistic Missile (ABM) Treaty came to nothing when the Russians recognized that the cost of continued opposition to America was too great. In 2001 the Russian side acquiesced in the American abrogation of the ABM Treaty in the context of reaching an agreement with the Americans designed to reduce their respective stockpiles of nuclear ballistic missiles. Moscow left its “strategic partner” to manage as best it could by itself in discussions with the Americans about ballistic missile defense. More generally, however, 28

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Russia’s relative economic weakness prevents it from being as significant a player in Southeast Asia. India’s domestic and international orientations were completely revamped after the dissolution of its main strategic partner the Soviet Union. It has embraced economic reform at home and sought to integrate itself into the international economy and it has sustained economic growth rates of 6 to 7 per cent for well over a decade so that it is now freely regarded as a rising economic power along the lines of China, even though its GNP is now calculated at $690 billion as opposed to China’s $1.6 trillion. Unlike Russia, it is a player of growing economic importance in Southeast Asia. More recently, it has signed defence agreements with the United States. At the same time it enjoys good working relations with China. As one of the major regional great powers it may be seen typifying the politics of cooperation and competition with the other great powers. The Impact of the Great Powers on Security in Southeast Asia The broader picture of great power cooperation and competition outlined for the region as a whole, is evident in Southeast 29

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Asia too. The regional great powers, primarily China, Japan and more recently, India, vie with each other for influence without openly challenging the preponderant power of the United States. To some extent the competition and perhaps rivalry for influence is tempered by the cooperative mechanisms of the various regional associations whose modus operandi are modeled on those of ASEAN with its emphasis on process and the building of trust rather than on legally binding agreements of the European model. For its part, the United States remains at one remove from the competition for influence as it concerns itself primarily with ensuring that the important sea lanes connecting the Pacific and Indian Oceans remain open and, since 9/11, with what it has called the “second front” in the war against terror. To these ends the United States has reinvigorated its alliances in the region and reached agreements with other littoral states about having access to pre-positioned supply points and it has agreed a more thorough going use of naval facilities in Singapore. In addition to supplying up to 2,500 troops to help the Philippines to combat Al-Qaeda linked terrorism and also in trying top assist Indonesia, the United States has also 30

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encouraged more coordination within Southeast Asia to address related issues of non-traditional security. These include seeking to improve the exchange of intelligence and cooperation between security organizations, establishing better security in ports, including the container security initiative, as well as more determined attempts to counter money laundering, piracy and drug smuggling. The American focus on the issue of terror was seen by many in Southeast Asia as too narrow. Moreover, the United States faces difficulties in gaining the full hearted support of countries with Muslim majorities, notably Malaysia and Indonesia, because of public distaste for the American invasion of Iraq and its broader policies in the Middle East. However, the United States won some ground back after it used the rapid mobility of its forces to bring immediate relief to the areas devastated by the Tsunami on 26 December 2004. Nevertheless, as will be discussed further below, there are many indigenous obstacles that obstruct the development of effective region-wide coordination to deal with non-traditional security threats. Thus with its structural power and its global concerns that do not include the acquisition of territory or exclusive spheres 31

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of influence in the region, the United States is a stabilizing strategic influence in the region. That provides sufficient reassurance to enable the Southeast Asian states to engage China and to encourage the active participation of Japan and India. The engagement of all three provides opportunities to prevent undue dependence on the rising Chinese economy and to balance or to hedge against China’s growing political influence. That is to say, that as they engage China and seek to enmesh it in the region and its norms, Southeast Asian states also try to ensure that the United States retains its security interests and commitments to the region and they encourage the other major powers to deepen their stake in the economy and stability of the region.19 It is also important to bear in mind that despite all the attention given to the rapid growth of Chinese economic relations with ASEAN countries China’s actual share of the ASEAN economies is still relatively modest. According to the most recent ASEAN Statistical yearbook, in 2003 China together with Hong Kong was the source for just under 10 per cent of ASEAN’s imports, the United 19

Evelyn Goh, Meeting the China Challenge: The US in Southeast Asian Regional Security Strategies, Policy Studies, No. 16 (East West Center, Washington DC, 2005).

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States accounted for 14 per cent and Japan 16.3 per cent. China and Hong Kong were slightly more important as markets for exports from ASEAN, accounting for 13 per cent as opposed to Japan’s 12 per cent and the 14 per cent of the United States. As for direct investment in the ASEAN economies the relevant shares for the period 1995–2003 were China — 0.29 per cent, Japan — 12.9 per cent and the United States — 16.47 per cent. Clearly China is only a negligible player as far as FDI is involved and although its share of ASEAN trade may be rising it still falls below that of Japan and the United States.20 Arguably the competition or rivalry between the great powers in Southeast Asia rebounds to the benefit of the ASEAN countries. In terms of economics it ensures that China and Japan in particular pay considerable attention to cultivating the local economies. Japan has been active even in the countries of mainland Southeast Asia, especially the less developed ones, Vietnam, Laos, Cambodia and Myanmar, where China may be said to have advantages of geography, a common interest in developing the economies of both sides of their respective 20

ASEAN Statistical Yearbook, pp. 80–81 and p. 146.

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borders and significant historic ties. All four have found their ties with China increasing significantly, especially as the Chinese side, unlike many western governments, is not interested in the character of the governments or in the condition of human rights in the relevant countries. Yet all four in their different ways have quietly sought to hedge or to balance against their giant neighbour. Myanmar, for example seeks to use India as a balance against growing Chinese economic and political influence.21 Vietnam is keen to build on the recent visit of its Premier to the United States.22 It is also highly receptive to Japanese business, especially as some of those firms currently engaged in China are seeking to find other locations in view of the political risk shown by the April demonstrations in China. Beyond that Vietnam is acutely sensitive to its perception of Chinese agreements with the Philippines about joint development of energy in the Spratlys, where their claims overlap as providing legitimacy to what they regard as China’s over inflated claims in the South

21

Sudha Ramachandran, “Myanmar Plays off India and China”, Asia Times, 17 August 2005. 22 BBC News, “Khai’s US visit stirs Vietnam media”, 24 June 2005.

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China Sea.23 Similarly, Cambodia, which many regard as coming under increasing Chinese influence, is careful to balance that by reaching out to Japan in particular from whom it receives significant ODA assistance in building infrastructure projects. Unfortunately, from the perspective of the Japanese government, Japanese companies have too low an opinion of business conditions in Cambodia to want to operate there. Chinese firms are less fastidious and in any case many, as SOEs, do their government’s bidding.24 Nevertheless the Japanese interest is strategically inspired. Accordingly, if China has plans to construct a road linking Kunming in Yunnan to Bangkok and other cities near the sea in the south, the Japanese are interested in constructing an east-west highway across Indo-China. Meanwhile Japan has responded to Chinese initiatives in Southeast Asia with corresponding ones of its own. China’s agreement with ASEAN to establish a Free Trade Agreement (FTA) in 2001, was soon

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Interviews with Vietnamese scholars at the Institute of International Relations and the Institute of South East Asian Studies, Hanoi, 11 July 2005. 24 Interview with a senior official in Phnom Penh, 12 July 2005.

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followed by an offer by Japan to reach an agreement to establish an agreement on economic cooperation. These in turn have been followed by various negotiations by each side to reach FTAs and cooperative economic agreements with select ASEAN states. However, Sino-Japanese rivalry in Southeast Asia is not necessarily entirely beneficial to the resident states and indeed in some respects it may already be seen to be detrimental to their interests. Given the suspicion and distrust between Japan and China, they tend to react adversely to each other’s proposals particularly if these have military implications. Thus the Chinese were quick to express their opposition to a Japanese proposal to send elements of their coast guard to help littoral states against piracy in the South China Sea. Similarly the Japanese side has looked askance at Chinese proposals to help police the Straits of Malacca. Mutual suspicion also threatens to undermine the strengthening of regional institutions. For example, the Japanese side has been concerned at the way the ASEAN Plus Three (APT) has been evolving, seeing it as subject to too many Chinese initiatives and as serving mainly Chinese designs. Thus the Japanese turned down the idea of 36

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negotiating a FTA between the “Three” (China, South Korea and Japan) and put forward the idea that a bilateral FTA be negotiated between Japan and South Korea alone on the grounds that Chinese institutions as well as its economy were insufficiently well developed. The Japanese were also unenthusiastic about building towards an Asian community based on the APT, especially after the Chinese Premier took the lead at the 8th ASEAN Plus Three summit in Vientiane in November 2004 by proposing an eight point agenda for the inaugural meeting of the East Asian Community due to take place in December 2005. The Japanese demanded that the membership be enlarged to include Australia, New Zealand and India. A face saving solution was found which gave the appearance of ASEAN leadership by requiring all putative members of the incipient community to sign-up to ASEAN’s 1976 Treaty of Amity and Cooperation. The rivalry between China and Japan has so far been contained and it has been beneficial to Southeast Asian countries from a strict economic perspective, but their rivalry has the potential to be highly disruptive. It is already having an impact on the institutional development of the region and matters could 37

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get worse if their relations should deteriorate further. A parallel may be drawn between the impact of Sino-American relations on ASEAN. ASEAN countries may benefit from a degree of rivalry between China and the United States, in the sense that it allows them hedge against undue Chinese influence. But they dread the possibility of armed conflict between them or even of the revival of American attempts to contain China. Similarly, a moderate degree of rivalry between China and Japan may be beneficial, but if relations were to deteriorate unduly they could have a highly disruptive and divisive effect on ASEAN countries and the region. Conclusion Much earlier on I suggested that security in Southeast Asia depended on the continuation of American structural power and the pattern of cooperation and competition between the major regional powers. But I also noted the significance of the new regionalism that has developed since the end of the Cold War. After all, in the absence of major conflict in the region the key to security in the short run at least is continued economic growth and development on the one side, and the 38

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strengthening of effective and responsive governance by the member states of ASEAN on the other. In other words, there is much that the member states of ASEAN can do themselves. This does not mean trying to exercise a kind of leadership within ASEAN related institutions. ASEAN has been allocated the notional leadership role because none of the major powers trusts each other to carry out a leadership role. But that does not mean that ASEAN can take a lead against the wishes or interests of any of the major powers. Its leadership therefore should be seen as mainly procedural. The much more important security task for the member states of ASEAN is to tend to their domestic and collective needs of deepening their economic integration and improving their own governance. In particular this calls less for fine sounding action plans than it does for addressing practical matters. With regard to integrating the economies of ASEAN so as to make ASEAN more attractive to foreign investment at issue is not so much reducing tariffs still further, but rather the harder administrative and perhaps political tasks such as coordinating customs procedures, harmonizing product standards, 39

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removing non-tariff barriers to trade in goods, liberalizing trade in services and setting up a credible dispute-settlement mechanism.25 Current statistics show that the biggest trading partner of ASEAN by far is ASEAN itself accounting for well over 22 per cent of exports and imports. By paying attention to the practical matters of developing an internal market not only will ASEAN tap its own potential better, but it would also make itself a more viable partner to China and the advanced economies that are keen to deepen economic relations. Similarly with regard to non-traditional security threats, which in many respects are the more immediate threats to the security and well-being of member states than the traditional ones, the main requirements are for the practical and administrative tasks of coordinating activities between the agencies of member states. These include improving the conditions for exchanging intelligence, coordinating measures to deal with infectious diseases, cooperating better to prevent drug

25

Rudolfo C. Severino, “Is ASEAN Finally Serious about Economic Integration?”, ISEAS Viewpoints, 30 November 2004.

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trafficking and trafficking in people, establishing joint patrols to tackle piracy and so on. Given the rapidity of the rise of China and now India, the region will have to be able to respond effectively to the new forms of competition that they will provide. There is therefore an opportunity for ASEAN in the next few years to better integrate the economies of its members in particular. Indeed the future economic development and hence the stability and security of the ASEAN states depends on the ability and willingness of the governments of member states to work better together. The current relatively benign external conditions for Southeast Asia are subject to great uncertainties. China in particular is faced with such formidable domestic problems that there must be considerable uncertainty about its capacity to maintain its current momentum. Any reverse could lead to a renewed emphasis on nationalism and heightened tensions with Taiwan and Japan. Moreover even if current trends were to persist Sino-Japanese relations could deteriorate still further to the advantage of no one. Similarly, the potential for another 41

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crisis in Sino-American relations cannot be ignored. These conditions of uncertainty should exert pressure on ASEAN governments to take the practical steps to prepare for a more integrated market and to improve coordination to meet the pressing security threats of the non-traditional kind.

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ABOUT THE AUTHOR

Michael Yahuda is Professor Emeritus of International Relations at the London School of Economics and Political Science, University of London, where he served from 1973 to 2003. He is a Visiting Scholar at the Sigur Center for Asian Studies, the Elliott School for International Affairs, George Washington University D.C. He was a Visiting Senior Fellow at the Institute of Southeast Asian Studies, Singapore. He enjoys an international reputation as a specialist on China’s foreign relations and on the international politics of East Asia. He has been Visiting Research Fellow at the Australian National University and Visiting Professor at the University of Adelaide (South Australia) and the University of Michigan. He has also been a guest scholar at the Woodrow Wilson Centre, Washington, D.C. and the Fairbank Center for East Asian Studies, Harvard. His main fields of interest are China’s politics, foreign policy and the international relations of the Asia Pacific. He has published six books and more than 150 articles and 43

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Michael About theYahuda Author

chapters in books. His latest book, The International Politics of the Asia Pacific since 1945, was published in the United Kingdom in December 2004 and in the United States in February 2005.

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