China's embrace leaves US in cold
By Fu-kuo Liu
May 16, 2008
http://www.atimes.com/atimes/China_Business/JE16Cb01.html
China is leading a new wave of regional cooperation in Southeast Asia,
and China-driven mechanisms for regional cooperation look set to
overwhelm all possible areas of economic and political cooperation.
For economic, security, diplomatic and military reasons, China has
been developing stronger relation****ps with member countries of the
Association for Southeast Asian Nations (ASEAN). The Beijing charm
offensive has become an integral part of its overall strategy to shape
a new regional structure that is more conducive to strategic
interests.
A new Asian regionalism stimulated by the China-ASEAN Free Trade
Agreement (CAFTA) will dominate the future economic landscape of Asia,
in which the United States may not have a substantial role to play.
ASEAN members are Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singa****e, Thailand and Vietnam.
CAFTA takes effect for China and six ASEAN countries in 2010 and will
be expanded to all ASEAN countries by 2015. China is now laying the
bricks of CAFTA's foundations by developing economic corridors in the
Greater Mekong Subregion (GMS). This effort will involve water
trans****t along the Upper Lancang/Mekong River covering China, Laos,
Myanmar, Thailand, and Vietnam; and rail and road links that will
stretch from China's Yunnan province to Chiang Rai in Thailand and so
eventually link with Singa****e [1].
At the third GMS summit on March 31 in Vientiane, Laos, leaders from
Cambodia, China, Laos, Myanmar, Thailand, and Vietnam agreed to
endorse the Vientiane Plan of Action for GMS Development for
2008-2012, which emphasizes the significance of pu****ng substantial
and early progress on trans****t and energy in the subregion.
Since the second GMS summit held at Kunming in 2005, China has
provided training and various development projects to GMS members and
is taking a leading role in developing the GMS Information
Superhighway Network [2].
Since January 2006, China has unilaterally opened 83 trading items to
zero tariffs for Cambodia, 91 for Laos, and 87 for Burma. China's
continued effort to promote GMS cooperation and play an active role in
coordination mechanisms is based on a strategic calculation that
emphasizes deepening economic cooperation in the subregion.
Since GMS economic cooperation is a China-ASEAN-Asian Development Bank
(ADB) joint effort, China's serious commitment to sub-regional
cooperation also reflects the main thrust of its "good neighbor"
diplomacy. Based on a comprehensive security strategy that aims to
facilitate regional stability through cohesion, China's real intention
with China-ASEAN cooperation can be found in its keen effort in
pu****ng GMS integration.
Many analysts believe that as China builds more institutional
frameworks for regional economic cooperation, these institutions will
accelerate further economic and political interdependence between
China and ASEAN countries.
For ASEAN, the immediate effect of the Asian financial crisis in 1997
was a strong desire to accelerate intra-regional cooperation. China's
firmness against market pressure of depreciating the yuan was widely
seen as having saved China's neighbors from the brink of failure,
because depreciation would have further weakened their ex****t
competitiveness and had a devastating impact on their economies.
Regional countries would not forget how, in a time of crisis, Western
countries imposed harsh requests for domestic reforms and left a
negative impression of their conditional assistance to the region and
its people. In a broader strategic sense, the growing sophistication
of China's foreign policy in the region can be attributed to Beijing
capitalizing on this disconnect and emphasizing the country's
geographic and historical proximity to the region. This helps it
underscore that its aims are unlike those of Western countries, which
is to facilitate better relation****ps with its close neighbors, and
consequently create a favorable environment that could be cultivated
in China's favor.
Regional integration in East Asia is largely considered driven by the
momentum of China's economic rise. It is obvious that the progress of
regional integration is very much in line with the pace of China's
economic advancement in the region. Economic powers in the region have
reacted to China's successful advance. For instance, Japan's
comprehensive economic partner****p initiative in January 2002 is
considered a prompt response to China's free trade agreement (FTA)
initiative with ASEAN. India is also accelerating its pace of
negotiating FTAs with ASEAN countries.
Dynamic initiatives
The establishment of CAFTA augurs comprehensive cooperation between
China and ASEAN countries. It is quite conceivable that once the
proposal is initiated, all existing cross-border interactions will
become institutionalized under the strategic framework. For this,
China has made tremendous efforts in trying to settle its common
border disputes. Two additional sub-regional economic initiatives were
proposed to deepen cooperation between China and Southeast Asian
countries. Those new initiatives came from both national and
provincial government levels in China.
Based on the ideas of reinforcing sub-regional cooperation, in 2004
Chinese Premier Wen Jiabao and Vietnamese Prime Minister Phan Van Khai
reached a consensus on the new initiative "two corridors and one
ring", where areas stretching from Kunming (Yunnan province of China)
via Lao Cai to Hanoi, Hai Phong, and Quang Ninh (Vietnam), and from
Nanning (Guanxi Zhuang Autonomous Region, GZAR) via Lang So to Hanoi,
Hai Phong, and Quang Ninh as two corridors, and along the Beibu Gulf
Rim as one ring.
This initiative of economic cooperation, which focuses on developing
three different levels of industrial division of labors - first, the
Pearl River Delta, electronics, telecommunications, and services;
second, Yunan and Guanxi, labor and capital-intensive industries;
third, Vietnam, consumer market - linking China's southern provinces
of Yunan and Guanxi with Vietnam [3].
In July 2006, on the occasion of the 1st Pan Beibu Gulf Economic
Cooperation Forum, the Guangxi government proposed a China-ASEAN
M-shape regional economic strategy, which would work on:
1. Extending sea links with Malaysia, Singa****e, Indonesia, Brunei,
and the Philippines.
2. Constructing a Nanning-Singa****e economic corridor through highway
and railway projects linking Nanning, Hanoi, Phnom Penh, Bangkok,
Kuala Lumpur, and Singa****e.
3. Deepening GMS cooperation among all member states and enhancing
communication and cooperation between China's southern provinces and
Southeast Asian countries.
To take advantage of its geographic location as China's gateway to
Southeast Asia, Guanxi has been advocating the combination of maritime
economic cooperation, mainland economic cooperation, and Mekong
sub-region cooperation. With this ambitious economic strategy in
place, Guanxi is moving one step further to try to institutionalize an
economic cooperation framework with ASEAN neighbors.
On the strategic level, it will be critical for China's relation****p
with ASEAN, as the initiative attempts to develop sea links among all
countries surrounding the South China Sea, including Vietnam,
Malaysia, Singa****e, Indonesia, Brunei, and the Philippines, and rail
links that will connect Singa****e with Kunming.
In the same vein, since 1992, the GMS Program, sponsored by the ADB,
has provided various development projects along Lancang River on the
China side and the Mekong River along Laos, Thailand, Cambodia and
Vietnam. The GMS works generally on developing regional strategic
frameworks through infrastructure linkages, cross-border trade and
investment, and upgrading competitiveness of regional countries.
In order to become a prosperous, integrated, and harmonious subregion,
GMS member states have adopted a strategy to enhance connectivity,
improve competitiveness and promote a sense of community. Their joint
efforts have been put forward in nine priority sectors - agriculture,
energy, environment, human resource development, investment,
telecommunications, tourism, trade and trans****t - and three priority
geographical areas - the North-South Economic Corridor, a East-West
Economic Corridor, and a Southern Economic Corridor.
The entire region understands the implication of China's success in
advancing into Southeast Asia and Central Asia by different economic
means. It is im****tant to note that China has managed well not only
through bilateral economic cooperation but also by initiating or
participating in multilateral economic mechanisms.
By the same token, the region has also observed the rapid decline of
US influence in all related policy areas. Especially on various joint
statements announced by regional countries on occasions of regional
multilateral forums, China postures itself with more confidence and a
much firmer position in initiating new cooperative proposals and
leading the ways of regional cooperation.
In effect, regional economic and political interdependence between
China and ASEAN countries is blossoming, though the degree of ASEAN
dependence on China is accelerating, especially for those members of
GMS. Through various development projects of GMS, China is quickly
developing solid connections and networking with its partners.
How substantial is China's influence over its GMS partners? What would
be the rationale for China's enthusiasm for sub-regional cooperation?
How can one understand the right direction of China's policy
intention? The overall policy strategy, which China has taken for the
past decade, emphasizes reshaping a peaceful image and helpful
attitude of accommodation toward its neighbors. Thus the settlement of
border disputes with its neighbors came up as the top priority on
Beijing's foreign policy agenda.
On economic cooperation and foreign aid, as China's economy booms, the
central government launches "cross-border economic zone" initiatives
toward its southern neighbors and encourages provincial governments to
utilize all possible resources to deepen interaction and communication
with its neighbors.
Currently, all related economic initiatives toward Southeast Asia can
be summarized into three general forms: China-ASEAN Free Trade Area on
the strategic level, cross-border economic corridors, and the Beibu
Gulf Rim economic sphere based on sea trans****t networking among
coastal countries of the South China Sea. In a nutshell, what Chinese
sub-regional initiatives have brought forward is paving the way for
China-ASEAN cooperation. With such high-profile national investment in
facilitating cross-border relations, ASEAN countries have already
heightened the degree of dependency upon China's economic and
political development.
While many observers are worrying about not paying enough attention to
catching up to China's new efforts in the region, they have discovered
that the United States does not have much to do apart from existing
bilateral security cooperation.
Although China's continuous advance into the region does not
necessarily mean that the United States' substantial role has been
replaced, experts in the region have commonly concurred that US
influence is seriously declining. To say the least, US policy toward
Asia is not keeping pace with the new dynamics of regional economic
integration that has been spearheaded by China's economic advancement
in the region.
What Asian countries need for substantial economic cooperation
initiatives does not seem to be reflected in Wa****ngton's Asian policy
orientation now. In the region's im****tant juncture of historical
development, we may begin witnessing a new structure of regional
cooperation shaping up in Asia without a strong US presence.
In the past few years, China's policy toward Southeast Asia has
noticeably been thriving. The preparation for CAFTA to take effect is
progressing steadily. Through several sub-regional economic
cooperation mechanisms, the relation****p between China and ASEAN is
much closer than readily observed. The environmental and social impact
of the GMS development projects is, however, creating a backlash in
regional communities, and this may serve as a great challenge to
China, as demand for the implementation of those projects increases.
The general direction of the Vientiane Plan of Action for GMS
Development for 2008-2012 indicates that in addition to accelerating
substantial progress of nine sectors, much of GMS resources will be
injected to strengthen the institutional framework and mechanism to
push cooperation forward.
Meanwhile, China is also very keen on initiating new sub-regional
economic cooperation, such as with the "two corridors and one ring"
plan. Although the cross-border economic cooperation initiatives
mostly benefit the border provinces, it represents China's endeavors
to explore economic, diplomatic, and security interests in the region.
Based on Beijing's grand strategy, the new sub-regional economic
cooperation implies more than its provincial economic development
zone. China is trying to utilize its strategic location to extend its
influence in economic development for broader market access in
Southeast Asia.
The fundamental idea of the Beibu Gulf Rim economic cooperation and
the like reflects China's geopolitical and geo-economic deliberation
via economic rather than political means. CAFTA opens up bilateral
framework for cooperation on the strategic level. The GMS and other
sub-regional frameworks facilitate the progress of bilateral
cooperation from the grassroots level.
More im****tantly, the region of the GMS for years has been China's
geopolitical constituency. What China expects to gain is through the
process of economic cooperation: first, trying to convey a deliberate
message to the region that the rise of China will be peaceful; second,
bringing about economic development in its southern provinces; and
third, making Kunming a regional operations center for trade and
trans****t. In sum, China's active role in the GMS projects its
strategic vision of a strengthening relation****p with ASEAN.
Notes
1. "GMS Flag****p Initiative: North-South Economic Corridor," Asian
Development Bank, June 26, 2005.
2. "Country Re****t on China's Participation in Greater Mekong
Subregion Cooperation," National Development And Reform
Commission,PRC, Ministry of Foreign Affairs,PRC, Ministry of Finance,
PRC, 2008-03-28.
3. "China-Vietnam 'two corridors and one ring" with great potential,"
Nan Boa Woan, March 22, 2005.
Fu-Kuo Liu, PhD, is a research fellow, Institute of International
Relations, National Chengchi University. He was 2006-2007 visiting
fellow at the Center for Northeast Asian Policy Studies, the
Brookings. His research works focuses on regional security, the United
States policy in Asia and regionalism in Asia.
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