Sunday, January 6, 2013

US, China set for a year of surprises
By Brendan O'Reilly

The United States and China have completed their respective leadership transitions. Now the two powers can begin developing their ever-transforming relationship in an atmosphere of (relative) domestic political stability. Last year brought about important changes to the Sino-American dynamic - most notably the US's much-heralded "pivot" to Asia. The Chinese leadership is increasingly vocal regarding perceived US interference in China's strategic front yard. The major trends in the relationship will continue in 2013, although there are some potentially destabilizing developments afoot. 

China's domestic political transition brought no surprises. Xi Jinping has been the heir apparent of Communist Party for many years. There are hopeful signs that Xi Jinping himself may be personally amicable to the United States: in the mid-1980s, Xi spent some time studying US agriculture in Muscatine, Iowa. 

Meanwhile, the US re-election of Barack Obama also represents a relatively favorable outcome for the People's Republic of China. Republican rival Mitt Romney had promised to label China a "currency manipulator" on his first day in office - opening the way to trade sanctions. Such a move would have had serious implications for Sino-US economic and political ties. 

Despite these positive superficial developments in Sino-American situation, there are deepening general tensions in the world's most important bilateral relationship. The US military "pivot" towards Asia, and American backing for Japan in the territorial dispute over the Diaoyu/Senkaku Islands are causing serious and open strains. 

Compounding these new sources of tension is a longest-standing disagreement over American weapons sales to the government of Taiwan. The stage is set for a period of increasing - and increasingly open - confrontation between the United States and China in 2013. 

Regional rumblings
The mounting tensions in the East China Sea lead to a forecast for stormy relations in the coming year. Both China and Japan are increasing their military presence in and around the disputed Diaoyu/Senkaku islands. Last week, Japanese fighter jets confronted a Chinese surveillance plane in the area. China's defense ministry promised to remain "highly vigilant" in the contentious dispute. 

Meanwhile, Japan's new Prime Minister Shinzo Abe is promoting a more proactive Japanese stance against Chinese territorial claims and regional ambitions. Within days of his inauguration, Abe was on the phone with the leaders of Vietnam, Russia, India, Australia, Indonesia, and Britain. All of these countries (with the exception of longtime US-ally Britain) surround China, and share concerns about China's growing political, military, and economic clout. Abe told reporters: "Japan-China relations are the biggest challenge of the 21st century in the fields of diplomacy and security … I will reconstruct the relationship of trust of the Japan-US alliance."[1] 

Japan's new proactive stance has enormous implications for US policy in the region. A cornerstone of US involvement in Asia is a mutual defense treaty with Japan. The most recent Defense Authorization Act, passed by the US Congress last week, contained two clauses of the utmost importance to Sino-American relations. One clause stipulated that the United States does not take sides in the territorial dispute over the Diaoyu/Senkaku Islands, but nevertheless acknowledges Japanese control over the islands. Such language could cause any clash over the Diaoyu/Senkaku Islands to escalate into a full-blown shooting war between Japan and America on one side and China on the other. The escalating dispute over uninhabited islands has the potential to start a war involving the world's three largest economies. 

The other provision of the Defense Authorization Act that has riled Beijing expresses congressional support for the sale of advanced fighter jets to Taiwan. Beijing views any weapons sales to Taiwan as support for "the renegade province", and a blatant violation of China's internal security. 

This American political move, coming at a time of increased Chinese tensions with Japan, has been interpreted in China as a signal of US aggression. It must be noted that the two clauses mentioned in the Defense Authorization Act are not legally binding, but rather express "the sense of Congress". Nevertheless, the symbolism has not been lost on China's leaders. 

Two recent editorials in China's state-run newspapers expressed open anger towards the American moves. A piece last week in China Daily condemned what it called American interference in the region:

The US' meddling in the dispute over the Diaoyu Islands is detrimental to regional peace and stability, as it will only embolden the increasingly rightist Japan…. The best choice at this moment is for the two countries to maintain the current good climate for bilateral ties, rather than provoking each other over sensitive issues. [2]

A more recent editorial in the English language edition of the People's Daily was even more forthright regarding perceived US intentions against the People's Republic of China:
America's lack of composure reflects the complexity of China-US. relations. No matter how China reiterates the path of peaceful development and shows good will in practice, the United States remains distrustful of China.

 The United States has a tradition of creating imaginary enemies, and China seems to be qualified as its imaginary enemy from cultural, historical, and social perspectives. However, imaginary enemies are "imaginary" for a reason, and it is unwise to translate strategic mistrust into strategic confrontation. [3]

The Chinese government consistently condemns US "meddling" in the East China Sea island dispute and the issue of arms sales to Taiwan because, in the eyes of Beijing, these are not international issues. Rather, they are matters pertaining to the historically sensitive issue of Chinese sovereignty. According to this worldview, America has as much legitimate stake in these disputes as China would have in a hypothetical territorial row between the United States and Mexico. American involvement in these issues is seen as an unnecessary and belligerent attempt to sabotage China's growing economic, political, and military capabilities. 

The reference to America's "tradition of creating imaginary enemies" is particularly telling. Unlike the supposed monolith of global terrorism, or the old threat of revolutionary worldwide communism, the potential challenge that China poses to US dominance is very real.

The Chinese government is warning the American leadership to be careful what they wish for - an economically ascendant, militarily motivated China that viewed itself as forced to confront US global hegemony would be a rival of a much greater magnitude than the United States has ever faced. 

Popular pressures
The confrontational political rhetoric between the United States and the People's Republic of China is increasingly reflected in the opinion of the common people in both countries. According to the Pew Global Attitudes Project, only 43% of Chinese people view the US favorably - down from 58%. [4] 

Fully 26% of people in China view the Sino-American relationship as one of "hostility", up from merely 8% two years ago. No doubt these figures are to a large degree influenced by the rhetoric of Chinese state-controlled media. However, US moves to deploy massive military assets on China's shores and support for Japan would be perceived as an aggressive stance no matter the political system within China itself. 

Meanwhile, the Pew Global Attitudes Project has also found increased American suspicions and worries about China. The last year has seen an important shift from Americans favoring "stronger relations with China" to favoring "getting tougher with China". Economic concerns - such as China's massive holdings of American public debt and the loss of US jobs to China - are the most highly cited American concerns about China. Issues such as human rights and China's growing military capabilities are found in less than half of the US population. 

Of course, increased US military deployment in the Asia-Pacific cannot do much to improve America's economy. While economic stagnation and political deadlock threaten to lead America over the edge of the "fiscal cliff", China's macroeconomic indicators are surprisingly robust. That is not to say that China is without its own domestic problems. Issues of corruption and growing impatience with domestic political reform will be the main focus of China's new leaders in the coming year. 

A slowly developing confrontational dynamic between the United States and China should continue for the foreseeable future. Barring any extreme miscalculation in the East China Sea, all sides will continue their posturing without the conflict escalating into war. As the balance of power shifts dramatically between the United States and China, it is only natural that the Chinese will seek to push back the boundaries of their sphere of influence - at least to the areas that Beijing claims a part of its integral territory.

The potential unstable elements of the Sino-American dynamic are the American economy and the Chinese political structure. In the event of a deep and prolonged fiscal and economic crisis in America, expect the United States to draw back its global military footprint. While such a move may be politically difficult, it may be increasingly unavoidable. A more realistic positioning of US military forces could assuage Chinese fears of encirclement, and actually improve bilateral ties. 

On the other hand, the possibility of domestic political change in China has the potential to suddenly push China and the United States into regional - and perhaps global - confrontation. China's leaders will only seek military conflict in order to unite their people in the event of major internal upheaval. Even a managed process of reform to a system that is more democratic would likely see China become more assertive on the international stage. 

2012 brought the US "pivot" towards Asia and an unexpected escalation of the long-standing territorial dispute in the East China Sea. 2013 may hold yet more policy surprises. Both powers may be preoccupied with domestic concerns, but as China continues its rush to overtake the United States as the world's largest economy, expect the unexpected. 

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