Forbes, June 18, 2007
China has been courting its neighbors, and although the Chinese did not coin the phrase 'soft power', they have exercised it with consummate skill. Only the United States and Japan have expressed concern and asked China what its intentions are regarding its increased military spending and its firing of a missile into space to shoot down one of its own satellites.
China's other neighbors appear unconcerned, a measure of its soft-power success. Most of these countries are focused on China's growth, anticipating the economic benefits in trade and investment it will bring them. For example, China's voracious appetite for energy and other natural resources is feeding an economic boom in Australia and, like other countries in the Asia-Pacific region, Australia wants China's growth to continue without disruption by conflicts over Taiwan.
China has concluded a free trade agreement with the Asean countries. But because of domestic pressures, Japan and India have so far been unable to match the Asean-China FTA. China's decision-making is based on strategic considerations that override such competing domestic interests as importers versus exporters and agriculturists versus industrialists. China wants Asean countries to link up, to ride its boom and hitch their economic futures to China's, but Japan's and India's decision-making processes do not allow their governments to override such internal conflicts of interests.
Conciliatory language
CHINA has been taking steps to avoid conflicts and improve relations with its neighbours. For instance, Premier Wen Jiabao visited Japan and addressed the Diet, knowing that Japanese Prime Minister Shinzo Abe wants to remove pacifist clauses in the Constitution so the country can adopt a more assertive foreign policy.
Using warm and conciliatory language, Mr Wen invited Japan to join China in realising a 'peaceful coexistence, friendship for generations, mutually beneficial cooperation and common development'. The Japanese media hailed his speech as 'historic'. Premier Wen told Chinese residents in Japan: 'I did a lot of preparation. (I wrote) every sentence myself, and I did all the research work. Why? Because I feel our nations' development has reached a critical moment. We need to have a peaceful and conducive international environment.'
Despite these words, Japan and the US worry that China's increased military spending heralds a more aggressive foreign policy. However, I do not believe China will blunder into competing against the US militarily.
In the mid-1990s China's General Liu Huaqing, then deputy chairman to Chairman Jiang Zemin at the Central Military Commission, told me he had gone to Leningrad in the 1950s to learn how to build a navy. I commented that the Soviets made clumsy weapons. He corrected me, saying the Russians made weapons that were as powerful as any made in the West. The Soviets' mistake, he said, was in investing too much in military technology at the expense of general technology and the civilian economy. Hence, the USSR's collapse.
Vice-Premier Qian Qichen underscored this view in his memoirs, Ten Episodes In China's Diplomacy, when he cited ex-Soviet Central Committee leader Yegor Ligachev as saying the Soviet Union had 'wasted large amounts of capital on strengthening national defence and assigned its best brains with the best equipment and materials to this unproductive sector'.
Striving for competitive advantage
TO BECOME competitive China is focused on educating its young people, selecting the brightest for science and technology, followed by economics, business management and the English language. Its goal: to become a modern technological power by the second half of this century. But China knows it is well behind the US in research and development, and lacks the entrepreneurial culture that drives a creative and dynamic economy.
Other leaders in Asia believe that the US economy will remain the world's most powerful and vigorous economy and that its technology will remain the most advanced. They believe the balance of power will not change. However, because they expect China to become the world's biggest economy by 2030 - with India not far behind - they want to avoid antagonising the two giants.
In the competition for economic and political clout, the US has enormous strengths. Although its population (300 million) is less than a quarter of China's (1.3 billion), US GDP (US$12.4 trillion) is six times China's (US$2.2 trillion). Moreover, private consumption constitutes 70 per cent of US GDP but only 38 per cent of China's. More FTAs would further open America's more attractive market. But the protectionist mood in Congress will likely hobble the administration once President George W. Bush's fast-track Trade Promotion Authority expires on July 1.
Iraq and the US presidential election
MANY Asians following the US presidential elections are amazed at the number of presidential hopefuls competing in the Democratic and Republican beauty contests.
Iraq will be one of the major issues in the next election. What puzzles Asian leaders is why more weight is not placed on discovering which candidate from which party can best resolve the problems in Iraq with the least damage to America and the world.
