Coming to Terms with China’s Ascent

BEIJING The rise of a great power is never smooth or painless and China's is no exception, as its economic strength and strategic ambition generate fear and uncertainty among its neighbors, along with profit and opportunity.

Already the world's third-ranked trading nation behind the United States and Germany, China is poised to become a leading maritime power with the military muscle to protect its seaborne trade, including the oil imports that are vital to its economic survival.

That same naval power could be used to enforce China's territorial claim to Taiwan, should Beijing so choose.

This is reshaping the post-Cold War order in Asia as most of China's trading partners and neighbors seek to preserve or strengthen existing security alliances while maintaining access to a market that is becoming a major driver of global growth.

"It's simply unprecedented," said Allan Behm, a strategic analyst and former senior Australian defense department official. "You have the world's largest and most dynamic population coming into its own as an economic, political and strategic force."

An immediate consequence is that China's relationships with most of its neighbors, and with other major powers, are becoming increasingly complex.

With the possible exception of Chinese-Japanese ties, no relationship demonstrates this complexity more than China's frequently troubled relationship with the United States.

Before President George W. Bush's visit to Beijing this month, senior officials from both sides have described the relationship as sound and cooperative, but deep underlying tensions remain over China's soaring trade surplus, intellectual property disputes, Taiwan, human rights and arms control.

Another source of friction, which Washington does not hide, is the U.S. desire to see the end of the Communist Party's authoritarian rule.

On a visit to Beijing last month, the U.S. defense secretary, Donald Rumsfeld, called on China to follow the example of most other Asian governments in adopting open and accountable government.

Many Chinese, both inside and outside the government, also desire a more open political system. At the same time, however, some note that the Communist leadership has been remarkably successful over the past two decades.

"Everyone criticizes the Chinese political system, but in the last quarter of a century, it has achieved a miracle," said Pan Wei, an expert on international relations at Beijing University who supports political change.

"Since this miracle occurred under the leadership of the Communist Party, a lot of people are uncomfortable about that in the West."

"About 15 or 20 years ago it seemed clear that you could push China towards the market economy and everything else would follow," said Lu Yiyi, a senior research fellow at Chatham House, an international affairs institute in London.

"Now the U.S. is feeling competition from China while China is also catching up in high tech, but there has been no political change.

"There is almost a loss of faith that the market will lead to political change."

Still, some analysts say, the strategic dialogue that began in August suggests that both sides have understood the importance of improving communication and avoiding conflict.

In economic terms, the United States is China's most important market. U.S. imports from China in the year to August reached $152 billion, according to U.S. government statistics. Analysts say China's trade surplus with the United States this year could rise above $200 billion, from $162 billion in 2004.

At the same time, for the United States, China has become a major creditor. Reports in the official Chinese media say that Beijing has invested about two-thirds of its $750 billion of foreign currency reserves in U.S. government and corporate debt.

Still, many areas of difference overshadow the relationship, of which the most contentious, both sides agree, is tension over Taiwan.

Chinese leaders routinely remind foreign visitors that gaining control of the island is their top priority. While they stress that peaceful unificiation is the preferred route, they insist that force remains an option.

"Taiwan is a cancer for China's security and I believe this cancer will spread if it is not cured," Major General Zhu Chenghu, a senior military commander, said in a July interview in Beijing.

In the same interview, Zhu warned that China would respond with nuclear weapons if the United States intervened in a conflict between the mainland and Taiwan.

"Taiwan is a direct challenge to the authority of the ruling elite in Beijing," said Behm, the Australian defense analyst.

For Washington, one problem in fashioning its response to China's rise is the difficulty of gauging how far that rise may go.

"Uncertainty about China's trajectory is contributing to the problem," said Lu, the Chatham House researcher.

"China now accepts that the U.S. is the world's only superpower, and can deal with it, but the U.S. hasn't come to an understanding of what China is."

This is not only a problem for the United States. Even senior Chinese officials, in private, admit the difficulty of judging whether the economy can continue to expand at more than 9 percent, or for how long the Communist Party can maintain its grip on power.

The financial system remains weighed down with bad loans. The Organization for Economic Cooperation and Development in Paris has estimated that it could cost $203 billion, on top of $283 billion already paid, to clean up the bad debt on the books of China's major state-owned banks. The economy, too, is increasingly vulnerable to energy shocks while environmental degradation is a rising threat to growth.

There is also an ever-present danger of social unrest arising from the widening income gap between the urban and rural populations and anger over rampant corruption. China's public security bureau reported that there were 74,000 mass public protests in 2004, up from 58,000 the year before.

Some believe that political change will eventually come, and with it a more benign future. But there are clear indications that defense planners in Tokyo, at least, are preparing for a potential threat from China even while trade between the two countries continues to flourish.

Japan late last month announced a sweeping realignment of its military forces under an overhaul of its alliance with the United States.

A joint U.S.-Japanese report said the new arrangements were needed to "dissuade destabilizing buildups, deter aggression and respond to diverse security challenges."

At the same time, the governing Liberal Democratic Party in Japan called for a revision of the country's Constitution that would allow the armed forces to play a wider global role.

Military analysts interpreted these moves as a response to the double-digit annual budget increases that China has allocated for more than a decade to fund its military modernization.

As Tokyo begins to raise its military profile, the government of Prime Minister Junichiro Koizumi continues to maintain an assertive stance in dealing with Beijing.

Koizumi last month defied Beijing's objections and made his fifth visit to the Yasukuni shrine honoring Japan's war dead.

These visits, along with Japan's desire to play a greater role in international affairs, are widely resented in China as deliberately aimed at countering China's growing stature.

"Japan is unhappy about China's rise," said Yan Xuetong, an analyst of Chinese-Japanese relations at Tsinghua University in Beijing. "From top to bottom in Japan, nobody is happy to see it."

But for one country, Russia, the absence of a security alliance with the United States means freedom to expand military cooperation with China as a means of gaining influence in Beijing and buttressing a thriving trade relationship.

Russia remains the biggest supplier of military hardware and technology to the People's Liberation Army. In August, Russian and Chinese armed forces held their first joint military exercise since the Korean War in the 1950s, when Russia was still part of the Soviet Union.

Chinese-Russian ties are likely to become even closer if China gains access to long-term oil and gas supplies from Russia's Far East.

Meantime, Chinese energy companies are unsettling international markets as they scour the globe seeking to buy reserves of oil and gas.

These efforts seem likely to lead China to play a more active role in the Middle East - where it has already drawn loud criticism for its ties with Iran and Sudan.

Beijing is also likely to strengthen its political ties with raw materials suppliers in Africa, Latin America and South Asia.

Like great powers on the rise in earlier times, including Britain, Japan and the United States, China could aim to project military power far from its shores in a bid to secure reliable supplies of the commodities it needs to sustain its industries.

"China will never have the capacity to be the world's leader, but it has more than enough capacity to pull the world's leader down from the stage," said Pan of Beijing University.