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The implications of China?s increasingly active role in multilateral Institutions

by Justin Arnold Tuesday, Jul. 19, 2011 at 12:53 AM

The implications for Asia Pacific security due to the active role and growing influence from the Peoples? Republic of China?s (PRC) approach to particular multilateral institutions are both economic and strategic. The PRC has also been active in several regional multilateral institutions such as the Asia Pacific Economic Community (APEC), the Asia-Europe Meeting (ASEM) and the Asian Cooperation Dialogue (ACD) but it is with the Association of South East Asian Nations (ASEAN) where the PRC?s greatest multilateral engagement has been witnessed.

The implications for Asia Pacific security due to the active role and growing influence from the Peoples’ Republic of China’s (PRC) approach to particular multilateral institutions are both economic and strategic. The PRC has also been active in several regional multilateral institutions such as the Asia Pacific Economic Community (APEC), the Asia-Europe Meeting (ASEM) and the Asian Cooperation Dialogue (ACD) but it is with the Association of South East Asian Nations (ASEAN) where the PRC’s greatest multilateral engagement has been witnessed. Through its participation in a Free Trade Agreement (FTA) with ASEAN future indicators of how the PRC may respond to developing diplomatic situations in a multilateral context can be gleaned. So it is on the engagement between the PRC and ASEAN that I will focus on in this paper through looking at the implications of the PRC’s multilateral approach to regional diplomacy. The implications of which are to be found not only in China and in the ASEAN states but also in the development of future strategic institutions for Asia Pacific Region.

Only through partaking in multilateral institutions can emerging economics reach the likelihood if altering the existing power structures and operating rules.

Su Hao China Foreign Affairs University China Daily

The PRC’s approach to multilateral institutions in the Asia Pacific has changed from a reserved approach to one where multilateralism is the cornerstone of the PRC’s foreign policy approach in the Asia Pacific Region. As such it deserves more attention than it currently receives from western bourgeois academia. The PRC, according to Cheng-Chwee, has ‘different patterns of participation in different multilateral institutions’ and it’s participation as an active partner in multilateral regional forum’s in the Asia-Pacific has been no more pronounced than with its engagement with ASEAN. According to Wong, ‘China’s dynamic economic growth and its integration process carry both positive and negative spill over effects on the region’ and it is these implications both positive and negative which I will focus upon in this paper. The Chinese approach to building multilateralism in ASEAN is an attempt to build an economic foundation for a greater strategic relationship.

The PRC’s leaders have since 1949 been aware of the relationship between diplomatic leverage in the Asia Pacific Region with its developing military capabilities.

The PRC’s military modernisation has the potential to create implications amongst its neighbours with which it has had historical tensions. For these reasons the implications of the PRC’s multilateral engagement has made China the centre of security concerns in the Asia Pacific Region. The result of China’s strategy competition with Japan and the United States has left the ASEAN states in a difficult situation as they attempt to balance the economic benefit from the PRC’s partial economic openness against the potential strategic dominance in the region based upon the PLA’s military modernisation.

The PRC has desired to develop its economic relationship with ASEAN nations through offering greater access to the Chinese market place and also through encouraging Chinese firms to invest in infrastructure development in the ASEAN states. In 2002 China signed with ASEAN the China-ASEAN Comprehensive Economic Cooperation Agreement, which brought together the largest economy in Asia with the largest economic bloc in the world’s fastest growing region. Wong states that, ‘China relations with ASEAN have reached a new era where the two sides have established an economic, political and legal framework for their comprehensive cooperation.’ The implications of the China-ASEAN economic pact will have upon a major influence on the Asia Pacific economic prosperity and also be seen as a major determinate for security in the Asia Pacific Region.

The ASEAN China Free Trade Agreement (ACFTA) is the largest FTA in the world and has resulted in implications not only for the Asian Pacific Region but also for the rest of the world. According to Chirathivat & Mallikanas,

The removal of trade barriers will lower costs, expand intra-regional trade and increase economic efficiency… the ASEAN China FTA will intensify competition, increase investment and bring about economies of scale which will have spillover effects in research and development and technological improvement.

These implications of the ACFTA are expected to boost investment in the South East Asian Region as the ASEAN states adjust to the partial integration of their economics into the political economy of the PRC.

One of the long-term implications from the PRC’s participation in multilateral institutions like ASEAN in stems from their hope that giving short-term economic concessions in multilateral institutions that aren’t controlled by the United States or Japan will lead to long- term strategic gains. The PRC’s approach, which Cheng-Chwee calls ‘diffuse reciprocity’ has seen the Chinese providing economic concessions to ASEAN with an expected strategic return. The Philippines rejection of US Bases lease renewal’s and Thailand, Malaysia and Indonesia’s trading in US built military aircraft for Russian built system that are inter-operable with China’s PLA Airforce has seen the ASEAN states start to move away strategically from their post WWII strategic alliance with the United States.

Another implication of the PRC’s economic engagement with the ASEAN states has been the development of an alternative economic model challenging the imposition of US neo-liberal policies in the Asia Pacific Region. The ACFTA from a Chinese perspective aims to replace the Unites States as the supreme economic entity in the Asia Pacific Region and to do this the PRC has set up an ASEAN investment fund as a way to undermine US economic hegemony. These changes can be seen as a product of the PRC’s deliberate investment in the political economy of ASEAN with possible the implications of a US response which may lead it into a trade war with the United States.

The implications of an unstable China for the Asia Pacific region could rise out of a potential conflict with Japan or the United States. According to Kesavapany, pontenial instability for the PRC could come one or more of the following sources, economic instability due to the effects of globalisations and the global financial crises, its domestic political and social change due to modernisation, some lingering historic disputes such as the Spratley Islands dispute and from Islamic terrorism. All of these potential instability factors for the PRC will have an impact upon the ASEAN’s states growing economic and strategic positioning with the region. Through the application of the ACFTA the PRC hopes to gain much needed natural resources and access to close markets as well as working towards a regional harmonious environment by engaging with ten countries through one accord instead of facing the difficult task of one on one negotiations with the aims of achieving both national and regional harmonious stability.

The PRC’s with its current multilateral approach will exert significant control over not only the developing Asia Pacific multilateral institutions but also its emerging security paradigms as through sheer economic weight. The way China today exercises power in its dealing with ASEAN will give us a clue as to how it will exercise power once it influence grows beyond East Asia to match its economic position and become a truly global superpower. As China grows in its multilateral approach, it will inevitably leave behind Deng’s call ‘Keep a cool head and maintain a low profile. Never take the lead - but aim to do something big.’ Over the long term, China’s growing multilateral approach to foreign policy will have determinational qualities not only for the destiny of the Asia-Pacific Region but also for whatever regional institutions that develops in building of a regional harmonious order as the PRC’s strategic influence grows.

Multilateralism as the cornerstone of the PRC’s approach to regional co-operation is seen as the best way to advance Chinese National Interests (CNI) whilst at the same time decreasing the influence of the PRC’s strategic competitor, the United States. The three policy objectives of the PRC’S strategic multilateral engagement with ASEAN are according to Cheng-Chwee,

a) Maintain a stable regional environment;

b) Cultivating a multipolar international order; and

c) Expanding its political influence.

The implication of the PRC’s engagement in economic, political and security co-operation through multilateral institutions like ASEAN is set increase it’s the PRC’s Strategic influence in the Asia Pacific Region with the aim of replacing the United States as the regional security guarantor. The major source of regional power for the PRC is the regional perception that it will soon be replacing the United States as the overwhelming economic, political and military superpower in the Asia Pacific Region.

Through its development of a multilateral approach to foreign affairs in Asia, the PRC has sort to shape the rules of the game in an emerging East Asian regional order so as to insure favourable outcomes for the PRC’s foreign policy objectives. According to Kesavapany (ed.) the three most important objectives of the PRC’s foreign policy are to maintain a stable and harmonious political environment at home, develop a multilateral international order and to expand their influence of the PRC globally. The PRC has proposed through its economic relationship with ASEAN the development of new multilateral security institutions in the Asia Pacific that are designed to undercut the post WWII model of security alliance that the United States traditionally shares with such states as Australia, Singapore, Indonesia, Japan, South Korea and the Philippines.

A risk and hence therefore a potential implication for the ASEAN states with their development of economic relations with the PRC is the implicit and explicit expectations from the PRC with the development of the relationship. These implicit and explicit expectations according to Haacke are based upon how,

1) Beijing has never been happy to see these countries allow other major powers to establish foreign bases on their territory.

2) It is a historical fact Chinese leaders prefer continental Southeast Asian countries not to assume a strategic centrality within this sub-region that would not only impair China’s security interests.

3) Chinese leaders also expect their immediate Southeast Asian neighbours to be attentive if not sensitive to the Middle Kingdom’s lesser security interest and identify claims.

4) Chinese leaders would prefer not to see major instability on their southern periphery arising from either interstate or intrastate conflict.

Currently the PRC is attempting to consolidate itself as an Asian insider against the United States with its multilateral engagement by offering favourable trading terms with ASEAN. With ASEAN’s economic dependency on the PRC growing year by year and with an increasing potential of US-China conflict to emerging and with the PRC military modernisation and assertion in the Asia Pacific region. There is a economic and strategic implications for ASEAN states being involved in any potential conflict between the United States and the PRC.

Wong claims there are three unanswered questions in regards to China’s rising role in the growth and development of the ASEAN region,

(1) How will China play out its geopolitical role in the region?

(2) What kind of new security architecture will the region develop?

(3) Will China push for a greater leadership role in the region in order to counter Western influences?

The PRC’s multilateral initiatives with ASEAN are more political than economic initiatives designed to steer ASEAN towards neutrality with the aim of preventing a US dominated Japan centred Asian security alliance from developing. ASEAN’s free trade economic relationship China has been increasing in importance year by year with their post WWII economic and strategic dependency on Japan and the United States in rapid decline due to the internal contradictions that are currently plaguing capitalism. Kraft argues, the management of ASEAN’s relationship with Japan and the United States will set a definition for the future development of ASEAN.

The growth of the PRC’s strategic influence in the Asia Pacific Region through its participation with multilateral institutions such as ASEAN has the potential to radically alter the strategic balance of the Asian Pacific Region. According to Dutta, ‘Dealing with China as a rising power is the most compelling of the many challenges facing the United States and its regional allies.’ White’s argues that the United States has three choices when it comes to responding to China’s rise ‘withdrawing from Asia, sharing power or competing with China’. Whichever response to the PRC’s military modernisation strategic rise in the Asia Pacific that the United States chooses will determine whether the Asia pacific regions growth is a harmonious and prosperous one or whether it is one that is defined by the conflict between two global powers.

The PRC’s approach to building multilateral arrangements with ASEAN states is an attempt to build an economic foundation that can develop into a great strategic partnership. Asia according to Lee, ‘has never seen a China and Japan that is simultaneously strong’ , with the raising of questions about how Japan will respond to the PRC’s growing economic influence and military assertiveness. Even with the PRC coming to fore as the economic player in the Asia Pacific Region there are still question marks regarding China’s future prosperity and stability . Due to the fact that the relationship between The PRC and the ASEAN States has had an effect on the position of the United States in Asia and as well as changing their role of Japan. K. Kesavapany…‘Japan is becoming increasingly assertive while there has been a resurgence of Chinese nationalism… the normalisation between the two powers was a condition for East Asia to make real progress towards deeper cooperation, especially in the political-security field.’ (p.3)’

A potential negative implication of the agreement signed between China and ASEAN in November 2002 is the immense pressure that is being placed on the North-South Asian Alliance with Japan and South Korea excluded from this very large and important economic partnership. The rise of China as the economic engine of Asian and its FTA agreement with ASEAN is a powerful force is pushing for an European Union style economic development and as a result promoting regional developmental path in South East Asia. The interdependent economic relationship between the PRC and ASEAN when extended into the security arena will no doubt have an impact upon the relationship between ASEAN and its traditional allies. The PRC attempts to reshape the strategic institutions of the Asia Pacific Region in its own future.

The implications for security in the Asia Pacific of the PRC’s military modernisation are different for the nations who have historically had a close relationship with the PRC when compared to those who have historically been close to the United States. For those counties such as Pakistan, Sri Lanka, Bangladesh and Myanmar who have historically had close relations with the PRC. The growing influence of the PRC in the region will have a positive effect on their strategic positioning especially when it comes to their times of tense relations with other regional powers such a India, Russia and the United States. Other nations in the Asia Pacific who have historically had difficult relationships with the PRC such as India, Vietnam and Japan have been placed under increasing pressure to match the PRC’s military modernisation program for fear of losing grip of current security conventions especially considering the PRC’s recent assertive behaviour in the South China Sea and its plan to contain India buy building a series of Naval bases in the Indian Ocean.

Donald Emmerson of Stanford University claims that the outstanding question in regards to China’s approach to the Asia Pacific Region are, ‘Will China become a responsible stakeholder, an irresponsible stick-wielder, or something in between?’, only time will tell.

Japan’s current resurgence as an ASIAN military power is a direct response to the People’s Liberation Army’s military modernisation and its associated new found nationalistic strategic assertiveness. The long term strategic challenges faced by ASEAN countries due to their engagement with the PRC include are according to Kesavapany,

• Coping with arising China when it on its own right will become a superpower’

• The evolving relationship between China and Japan

• The future relationship between China and the United States.

The most important implication for the Asia Pacific community strategic institutions stems from Japanese fears that the PRC developing economic relationship with ASEAN will leave it strategically isolated and its position as leading nation in the region may be changing due to China’s military modernisation and that this may lead to military conflict.

Conclusion

So therefore in conclusion with the international security order undergoing transition due to the exposure of capitalisms internal contradictions, the multilateral engagement of the PRC in the Asia Pacific Region is having far fetching implications both economically and strategically It is inevitable that with the economic rise of the PRC it will demand the strategic influence that befits a nation of its economic importance. Through engaging with multilateral institutions such ASEAN with the their joint FTA, the PRC has sort to influence the developmental path of the Asia Pacific’s emerging economic and strategic institutions based upon terms that are favourable to itself. As a result ASEAN has drifted away from both the United States and Japan both economically and strategically which is having important strategic implications in the Asia Pacific as other regional powers like Russia and India start emulate its economic approach and military modernisation.

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