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November 18th, 2014 Bridge Cafè (Wudaokou)

Speaker: Dr. WANG Xun 王勋 China Center for Contemporary World Studies (CCCWS), International Department, CPC Central Committee

Presentation
In the last years, in the aftermath of the global economic crisis, China’s reforms gained new impetus. If the Reform and Opening Up in 1978 is conventionally framed as “first round” of reform, the recent changes could be labeled as a second one. Presenting a report that he had co-authored and disseminated among top level policymakers on the global ramifications of China’s economic reform, Dr. Wang argued that the world should welcome China’s reforms as it will have mostly positive effects on the global economy.

First, as a result of the reform, the economic outlook of China nowadays seems relatively positive. Initially, just like in the rest of the world, the Chinese economy has been affected by global financial crisis that started with the fall of Lehman Brothers; the most notable indicators of this were the declining consumption and aggregate demand. That was the time when the double-digit growth rate started to make downward slope in China, while the developmental agenda of the country suffered as well. Yet, as Dr. Wang argued, the government was in a position to successfully intervene and prevent more detrimental turn into the “wrong direction.” While slower (from double digits to 7.5%), the new growth is more sustainable, and will stabilize in the years to come.

At the core of this “second round” of large-scale reform is the effort to achieve “proper,” balanced relationship between the government and the market. Slowly, the economy is shifting from the hands of government to the market. The comprehensive effets of such shift are yet to be seen. However, the essence of the reform is that the market is becoming the decisive force in terms of the (re)distribution of resources in the economy, whereas the central government will have to face challenges while trying to support the private sector during the process of shifting, and provide adequate public services.

China’s reforms have also strong external component. China is now focusing on cooperation with both developed economies, as well as the developing countries in its neighborhood. Following up the theme of the recent Asia-Pacific Economic Cooperation (APEC) summit, which was concluded in Beijing a week before his talk, Dr. Wang emphasized the issue of connectivity. “China wants to work on the connectivity of Asia, aiming to make it a means of cooperation in the region,” he said. He sees this as grounds for cooperation and one way for China’s neighbors to benefit from its reforms. The issue of Asian Connectivity implying that it will help to achieve the full potential of Asian Century. The connectivity through the road and sea would be useful for all the Asian developing countries to work together, under the leadership of China. Partly, China wants to use the connectivity as its master plan to inject its investment in developing Asian countries including Bangladesh, Pakistan and the countries of ASEAN.

The internal economic indicators are not performing at their best level recently, but this will be solved once the new supply-demand dynamics takes final shape. As Dr. Wang argued, the supply of labor has been declining, as the labor costs have grown. Moreover, the demand for export goods has declined; although the domestic demand has been slowly going up. Yet, as China has indeed developed serious income inequality issues, the government is taking measures to revert this trend. In fact, the Gini has peaked in 2008, but ever since it has been declining due to new policies.

China has made great contribution to the global economic growth in the last several years, and made a particularly significant contribution during the global financial crisis. “China helped the world economy to overcome the wounds of global financial crisis,” he said. While doing that, Chinese market was also greatly affected by it. China hopes to do a lot in the future as well.

The most significant opportunity for the world that comes as an outcome of China’s reforms is the stimulation of the global labor market. As opposed to the mainstream impression that China’s growth shuts down jobs opportunities elsewhere Dr. Wang argued that benefits of China’s growth will be felt all over the world, with China creating more than 7 million new jobs in the global labor market in the period 2014-2020; this is a figure based on analysis of the data provided by the International Labor Organization, Basically, for 1% of its GDP growth over this stretch, China will generate 1.5 million urban employments abroad.

Moreover, China’s growing domestic consumption and industrial upgrading will push up exports by other countries. For now, China’s household consumption ratio has been lower compared to countries with similar growth level and significantly lower than developed countries. But since 2011 household consumption started to pick up. By 2020 it will reach 45% of the GDP, and soon after will peak at 60%. According to a report from McKinsey, the middle-income population will increase from 230 to 630 million from 2012 to 2022, and the Chinese urban middle class (by 2020, urbanization rate in China will reach 60%) will become main consumer of mid- and high-end goods, modern services and intellectual products in the world, with significant part of those being imported from abroad (over the same time span, China will add an additional USD 1.7 trillion of import in total from foreign countries).

Meanwhile, talking about the China’s outward investment flow in the developing countries, Dr. Wang said that the China is opening up more for that and trying to ease the policy hurdles. He described China as a stakeholder and active contributor to the process of urbanization and industrialization of the developing countries. China’s economic policy has been providing host countries with capital and industry transfers. China’s industry transfer will also bring huge opportunity for labor intensive industry and industrialization of neighboring countries. This converges with China’s domestic reforms agenda as well.

On the other hand, as China moves away from cheap exports, this will also affect the economy of developed countries; they will have to upgrade their economies and move up the industrial chain as China starts to make high-end products. However, in general, the global market will have more efficient value chain system and that will be in favor of all countries, while developed countries will maintain comparative advantages in areas in which they have more complementarity than competition with China, such as high-end manufacturing and modern service sector.

China’s going global strategy is based on increasing OFDI, with OFDI being emphasized as equally important to FDI inflows for China’s growth. By 2020, China’s OFDI stock will surpass USD1.2 trillion. Hong Kong, ASEAN countries, EU countries, the US and Russia have been the main recipients, but China’s investment will be also spread elsewhere. The implementation of the New Silk Road strategy at land and sea (“One Belt, One Road”) will facilitate the process of sharing the benefit that come from the new reforms with the world, and in particularly stimulate the cooperation over connectivity in Eurasia.

Finally, China is increasingly embracing the model of mixed ownership businesses, which is opening up more space for foreign investment and opportunities for foreigners to reap benefits from the Chinese domestic market.

However, there are some structural risks of reforms in China, especially in the real estate sector and at local government level, in particular relating to the local government’s debt. Yet, according to Dr. Wang, the risks for China’s economy are within a controllable range; for instance all China’s credits amount to the domestic debt, similar to the case of Japan and the US, meaning that it has a healthy crediting condition. On the other hand, local governments have been pivotal in the economic development, as they mostly spend the loans on infrastructure.

Dr. Wang concluded with brief policy recommendations, which included: encouraging international cooperation on sustainable development; recognition of China’s economic development; promotion of investment facilitation with a more open mentality, and facilitation of cross-border investment; advocating free trade with more rationality.

Q & A session

Addressing the question whether China has made any significant reforms in the stock market, Dr Wang said that the government is taking slow and continuous reform measures in the stock market, mainly in Hong Kong and Shanghai stock exchange. Those are the places where not only domestic investors invest, but also foreign investment pours in at a large scale.

Elaborating in more detail on the policy implications for both Chinese and foreign decision makers, Dr. Wang reiterated some guiding principles of his reasoning. First, to really benefit from China’s growth, the outside world needs to thoroughly embrace the cooperation with China. China’s growth itself is already big contribution to global economy, hence it should be welcomed. China takes measures to promote domestic consumption, which will have profound global ramifications.

Coming to answer on what it would be like the implications of reforms since the politics and economy is so intertwined in China, Dr. Wang argued that the government takes care of such complications, as it wants to meticulously carry out handover the economic activities to the market. One of the ways to achieve this, is to improve the social security market and to take policy measures that would increase the investment from all sources in the domestic market. The difficulty of balancing a mixed economy is that the government has to take care of many issues on regular basis.

He also responded to the question of China’s neo-liberal inclinations and potential “collateral damage” as an outcome of the reforms. He said that the reason of slowly and gradually implementing the reform measures in the country is precisely in order not to not cause any cracks and widen the wealth gap. He also spoke of the challenge of urbanization and disproportions in domestic markets. He emphasized that the main challenge for the Chinese economy is to improve its competitiveness, which in turn will advance its efficiency.

Asked on the issue of what China actually does to promote free trade, Dr. Wang pointed out that China is actively trying to facilitate its trade relations, and so far the main instruments for this have been the different Free Trade Agreements. Most recently, China finalized the FTAs with the Republic of Korea, Australia, and New Zealand.

There are some considerations for the future work of Dr. Wang. For one, he said that he would like to take in account variables such as the energy security, political factors and goodwill abroad, and to deeper analyze the distribution of the newly created jobs by China, in terms of location and sectors.

Reporters: Anastas Vangeli and Bhoj Raj Poudel

event #39 November 18th, 2014

Dr. WANG Xun
China Center for Contemporary World Studies, International Department
CPC Central Committee

Re-thinking 南欧西亚北非
European views on the Mediterranean region and China

Abstract:

The proposed roundtable aims at re-focusing the ongoing conversation on the security dynamics characterizing the West Asia-Northern Africa region. By proposing a more holistic approach to the Mediterranean space, analyzed through the relations connecting its northern and southern shores, it widens the focus to include economic interdependence and migration trends. While China’s economic and political footprint in the region is far from having reached its full maturity, its impact is already perceived by actors in the region, and it is strategic in nature. The roundtable will offer European and regional viewpoints on China’s growing role in one of the pivotal geopolitical and geoeconomic spaces in the world. The innovative dimension of this academic initiative is further underlined by the composition of the panel, which includes both scholars and practitioners from the diplomatic communities of several of the countries concerned.

Organizers:

Center for European Studies (PKU), Turin World Affairs Institute (Twai), ThinkIN China (TIC)

Timing and structure:

the workshop-roundtable will be held on Nov. 18th in the afternoon (2-6 pm)
Location: 北京大学历史系 – 人文学苑5号楼, B117，时间为11月18日下午2时至6时

 Agenda:

2 pm – 2.30 pm Introduction by Prof. Li Qiang and Prof. Fardella2.30 – 4 pm: 1st session chaired by Prof. Li Qiang

DISCUSSION (30 mins)

4 – 4.15 pm coffee break
4.30 – 5.45: Second session chaired by Prof Fardella

DISCUSSION (30 mins)

5.45 – 6 pm Conclusion

Participants:

Dr. Davide Giglio (Italian Embassy)
Prof. Giovanni Andornino (15 mins)
Dr Niu Xinchun (CICIR) (15 mins)
Prof. WU Bingbing (PKU) (15 mins)

November 18th,  2014

The Global Impact of China’s Reforms

Supplementary Materials

“Global Influence of China’s New Reform. An Overall Evaluation”
Zhang Yansheng and Wang Xun, August 2014 | PDF  fulltext

Related Posts

October 22nd, 2014 Bridge Cafè (Wudaokou)

Speaker: MA Xiaolin 马晓霖, Founder and Director of the blog Bo Lian She 博联社

Presentation

 Ma Xiaolin positioned his talk within the big global debate on the future of the Middle East in the light of the ISIS advance. In a brief historical overview, he traced the roots of today’s crisis to the developments of the last century. In 1968, the Ba’ath Party took power, which was a landmark event after years of instability. Initially, the Ba’ath brought stability and prosperity, as Iraq’s economy started growing, and it had established a social welfare system.

In the meantime, Saddam Hussein rose to power through the Party ranks. He was self-aggrandizing – as Ma Xiaolin puts it – “started acting like he is a new Nabucco.” In the wake of Egypt’s decline, Saddam took on the cause of being a leader of the Arab world, pursuing a pan-Arab unification and regional domination. This put Iraq on a collision course with Iran, itself a growingly aggressive regional power in the wake of the Islamic Revolution. The Iran-Iraq war had did not end with a winner, but rather both sides coming out of it destabilized.

After the with Iran war, a large number of Iraqi and other Arab soldiers who fought were suddenly found jobless and had a hard time finding their place in society. The war also left Iraq with a very high debt, and in a precarious socio-economic state. The exit strategy for Saddam was to invade Kuwait, which destroyed the relatively positive ties between Iraq and the Western World, in particular the US, and subsequently led to the Gulf War. Iraq ever since became treated as a pariah state, and very soon – in 2003 it experienced another American invasion, which brought about the end of Saddam’s regime. Ma Xiaolin shared a lot of personal impressions, as he was there at the heat of the violence as a Xinhua journalist. In his own assessment, the US did two fatal mistakes that helped the rise of ISIS – first, it dismantled the Army of Iraq, which resulted with many soldiers and weapons spilling to guerilla groops; and secondly – it dismantled the Ba’th Party which was the unifying factor in Iraq – suddenly, Iraqi local leaders lost their sense of belonging and protection, did not know who was in charge and who they are supposed to be loyal to, and started pursuing individual interests.

The origins of ISIS should be sought in the politicization of Sunni Islam. Sunnis in Iraq are a minority, but are linked with the rest of the Sunni world. They consider Shia Muslims and Kurds enemies. And it was Sunnis who lost mostly with the fall of the Saddam’s regime, as they used to comprise the ruling class. Facing the reality of the post-Saddam era, Sunni political and military leaders started linking with revolt groups (i.e. al-Qaeda).

Ma Xiaolin identified several key moments that led to the establishment of the Islamic State. A major development in the wake of the US invasion, was the rise of the jihadist leader Zarqawi, who in 2004 rose to prominence by building a transnational network of jihadists; while he joined forces with al-Qaeda although he had different ambitions. However, in 2006 Zarqawi was killed. This was a blow to al-Qaeda; Zarqawi’s terrorist network split the coalition with al-Qaeda and declared itself to be the Islamic State of Iraq, with Abu Omar al-Baghdadi, Zarqawi’s successor, declared to be its emir. In 2010, him and Abu Ayobu al-Masri, another former aide to Zarqawi were killed; however, instead of defeating the Islamic State, this gave rise to Abu Bakr al-Baghdadi, who gave new fervor and led the terrorist organization to new heights. In 2013, the Islamic State of Iraq unified with with al-Nusra Front, a jihadi opposition group from Syria, and officially declared the Islamic State of Iraq and Syria. However, in 2014 they parted ways with al-Nusra and formally separated from al-Qaeda, declaring the Islamic al-Khalifa (Islamic State).

China has long history of ties with Iraq, that predate the Saddam regime. However, in the past 20 years, Iraq’s importance for China grew exponentially due to the rise of oil imports. Hence, China has huge interests in Iraq. China is the biggest importer of Iraqi oil, as half of Iraq’s oil goes to China – this accounts for a fifth of China’s imports. In 2013, China imported 25 million tones of Iraq’s oil. China is also the biggest investor in Iraq, and has huge energy and infrastructure projects. There are 15.000 Chinese workers in Iraq, working on these projects, which raises the issue of personal security. Finally, China has fear of transnational extremism spilling over in its regions with significant Muslim population; currently, Iraq is a hotbed jihadist movements, that also target China.

Addressing China’s limited political and security efforts in the region, the US President Barack Obama recently called China a “freerider” in Iraq. However, according to Ma Xiaolin, this is wrong. China has historically been concerned about Iraq and tried to act through diplomatic channels. In the wake of the firs Gulf War, China was active in preventing the US invasion, and was lobbying for Saddam to withdraw from Kuwait. China believed that the war will have devastating effects. However, China failed to persuade Saddam to withdraw from Kuwait, and couldn’t prevent American invasion. In 2003, it fiercely opposed the US intervention, and was among the loudest critics in the UN. China disputed the way in which the American intervention was carried out, and problematized the fact that the US engineered a new government, but nonetheless accepted the outcome because China wanted Iraq to stabilize and itself to show responisibility in the international arena.

Moreover, the intervention and the political engineering in Iraq was an exclusively American unilateral business, and the US had kept China out. China did not have a say. However, China still decided to invest and support Iraq, and sent its own workers there. Ma does not dispute that there are business interests, but China is also a developing country so whenever it goes to help others, it also looks for opportunities for its own development. China is still not a major global power, and especially not a major player in the Middle East. It lacks experience in being a big external player and leader, and lacks the military capacity. It cannot macth the role of US, EU or Russia, who were main players in the Middle East for decades now.

What’s China’s strategy in the Middle East? It doesn’t really have one. Strategy, for one, depends on theory. In this regard, China still follows the general principle set out by Deng Xiaoping – we don’t really care too much about outside developments, for now we just make our economy stronger. In Zhongnanhai leaders don’t care much about Middle East, but about China’s domestic interest. Moreover, even in the times of Hu Jintao and Xi Jinping, China does not aim to develop strategy, but rather short-term policies. That is why China will not play an important role in the Middle East. Xi Jinping for now wants the oil imports to be done smoothly, and to secure Chinese investments abroad – priorities that do not require too much theory or strategy to be completed. Finally, China is hesitant to get deeply involved in the Middle East, as it is very complex and a troublesome place. China is not prepared for the risks that could be encountered there. Often, Chinese political leaders and scholars say that the Middle East is graveyard for empires, as many big empires through history collapsed after getting involved and failing in the Middle East.

Furthermore, when it comes to complex foreign policy issues, China prefers to follow regional circumstances, and to act only within the UN framework. In the Libya, it allowed the two UN resolutions because of the request by the Arab League. In the Libyan experience, it had been disappointed by the abuse of the mandate of the international community to support revolution instead of stopping a war. This, as well as the lack of consensus on Syria, made China use its veto in the UNSC – and used it several times over a short time which is unusual. It believes that invasion is the least desirable outcome.

However, China has several opportunities how to contribute to the international efforts of combating ISIS. First and foremost, it should be vocal in accusing any terrorist act and organization – and not only in Iraq. Silence in terms of terrorism benefits the extremists. Political stance matters, and China needs to formally stand against terrorism.

China should also supporting international efforts to strike terrorists in Iraq and Syria. Extremism is a common enemy – as Ma puts it, today they harm you, tomorrow they harm me. Governments must be united against terrorism, and China needs to join the anti-terror alliance. An important aspect of this is sharing intelligence and information among all partners. China already does this.

China lacks military capabilities to join anti-terror operations. For now, it can learn from US, Europe, and Russia, and maybe in 10 years you can see PLA engaging in anti-terror fight. However, for now, China can instead provide funding, equipment and goods for the allies. It can also help by providing training local army and police personnel, an area in which China is experienced. Last but not the least, China should continue supporting and taking part in peace-keeping operations under the flag of the United Nations. This is a great opportunity for China to show responsibility and learn from others.

Q&A: The question and answers question started with a brief discussion on China’s soft power in Iraq. Mr. Ma argued that in Arab countries in general, people have unclear image of China as people have limited knowledge of the country. In general, however, soft power cannot be built without hard power.

Another important theme of the discussion was the Xinjiang issue, and the potential spillover effects from the Middle East. However, Mr. Ma argued that Xinjiang is a complicated case, and that the main reason for instability is the failure of local management; foreign ideologies are only a secondary factor.

However, Xinjiang is a region with significant Sunni Muslim presence, and is connected with other Sunni regions. When it comes to transnational Muslim solidarity, borders do not matter. Xinjiang separatists had sought outside help from the Islamic world, in particular the Middle East. Extremists in the Middle East also have ambition to expand to new areas with Muslim population, including China (Xinjiang, Yunnan, etc). The Islamic State in fact does aim to “liberate Xinjiang,” and that constitutes a serious security threat for China.

The discussion also touched upon the Israel/Palestine issue. Mr. Ma argued that while China shows solidarity with the Palestinian cause, it doesn’t accept extremism, and will always respect Israel’s sovereignty.

Mr. Ma’s hypothesis that China “is a follower, not a leader” was questioned in the light of the new foreign policy tendencies . While Mr.Ma sees no significant change in the overall policy, he argued that the main difference is that in Xi’s time, China is more powerful, and has an opportunity to learn to be a giant. But it is still not a leader in global affairs.

What’s the fine line between propaganda and what really happens in Iraq? A lot of Western media were basically full of hoaxes and misinformation about weapons of mass destruction, underground shelters and even an underground town built by Saddam. When Xinhua published that there is no WMDs or complex hideout systems, no one really took it seriously – although later it was proven right. Western media portrayed Saddam’s Army as a powerful enemy, but such assessment was far from reality. Saddam, aware of his weakness, thought this was bluffing and that Americans will never strike. Propaganda can be dangerous. It was shown that Bush Administration and the Blair Administration did not have evidence, and carried the invasion on false grounds. The Syrian crisis now is another case where reliability of evidence is contested.

Is China’s involvement in security affairs proportionate to its interest in Iraq? For example China due to oil interest has major interest in keeping Maliki in power. However, Mr. Ma argued that whereas the US has lesser interest in energy security, a politically stable Iraq is a proof of success for American global leadership. If China wants to do more, it also needs room, and for now, the US does not give China enough space to begin with.

Written and Edited by: Anastas Vangeli

event #37 September 15th, 2014

Edward Luttwak
Senior Fellow at the Center for Strategic and International Studies
Francesco Sisci
Senior Researcher at Renmin University of China

Abstract

The elemental sense of centrality of any polity takes very different forms, ranging from the quiet certitudes of the Kingdom of Denmark to that well-known Chinese construct, the Tianxia (whose logographs 天下 have been much seen in the Japanese press of late, their Kanji versions being identical). Literally “under heaven” , short for “all under heaven” or more meaningfully, “the rule of all humans”, it defines an ideal national and international system of ever-expanding concentric circles centered on a globally benevolent emperor, now Xi Jinping or more correctly perhaps, the seven-headed standing committee of the Politburo. The innermost circle of the Tianxia is formed by the rest of the politburo and top Beijing officialdom, while its outermost circle comprises the Solomons Islands along with the twenty or so other utterly benighted “outer barbarian” countries that still do not recognize Beijing , preferring Taipei. In between, all other Chinese from officials and tycoons to ordinary subjects and overseas Chinese have their less and less inner circles, as do foreign states large and small, both near and far, both already respectful (too few) and those still arrogantly vainglorious.

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event #36 June 17th, 2014
organized with Beijing Energy Network

Prof. LIN Erda
Senior research fellow and Director, Coordinating Lead Author of WGII Report
Researcher at Chinese Academy of Agricultural Sciences

Dr. ZHU Chunquan 朱春全
Country Representative, China Office of IUCN

Abstract

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event #35 May 20th, 2014

Chen Yurong, 陈玉荣
Senior research fellow and Director, Department for European-Central Asian Studies at CIIS,
Secretary-General of the Chinese Center for SCO Studies

In the light of the forthcoming visit to China of Vladimir Putin, and the incoming energy agreement between China and Russia, analysts have been discussing about the potential reality of a new Eurasian continentalism as an alternative pole (politically and economically) to the maritime-based American dominion. Prof. Chen will give a talk about the dynamics of Sino-Russian relations in light of the Ukrainian tension, the reemergence of an “Iron curtain” in Europe and the US pivot in the Asia-Pacific. 

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The ThinkIN China team, EURAXESS Links China,
the European University Centre at Peking University,
and the Understanding Science team
are delighted to invite you to the third edition of Researchers’ Night, which this year will take place both in BEIJING (May 7th) and SHANGHAI (May 15th).

In a relaxed atmosphere, you will have a chance to meet fellow researchers working on similar topics and reach out to new contacts among the international research community in Beijing.
The free event is open to Ph.D. students, postdocs and senior researchers from all fields. Drinks and food on the house!

For the BEIJING EVENT Please register before Sunday, May 4th.
For the SHANGHAI EVENT Please register before Monday, May 12th.

You can scan the QR code in the flyers or following these link beijing | shanghai

DATES AND VENUES

BEIJING: May 7th, 2014 (Wed) 7pm
Bridge Café – Rm 8, Bldg 12, Chengfu Lu
成府路五道口华清嘉园12号楼8号

SHANGHAI: May 15th, 2014 (Thu) 7pm
Kaiba Bar – 739 Ding Xi Lu, Shanghai, China
上海开巴，定西路 739号

event #34 April 15th, 2014

Dr. DA Wei 达巍 Director, Institute of American Studies, China Institutes of Contemporary International Relations (CICIR)

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March 25th, 2014, Bridge Café (Wudaokou)

Speaker:
Prof. Robert Ross, Professor of Political Science
Boston College and Associate, John King Fairbank Center for Chinese Studies, Harvard University
Prof. YU Tiejun
Associate Professor, School of International Studies, Peking University

Presentation

This month ThinkIN China to welcomed two renowned speakers for a special double event examining various aspects of China’s Maritime Security in East Asia. 15 years ago, China launched its first diesel submarine. In the context of China’s astonishing, well-publicised development in other areas, one would be forgiven for assuming that naval development has taken place at a heady rate since then, however, Professor Ross began the evening with the surprising suggestion that, in many ways, Chinese naval development in recent years has been very limited. In fact, he went on to argue China is still yet to become a naval power of any real significance in East Asia. Of course, this is not because it would fail to outmatch any of its neighbours, but instead that it still fails to make any real sort of challenge against the powerful ally that stands behind these neighbours – ready to step in and defend them if a situation was to occur. The latter is the world’s number 1 power, the US, whose alliances with Singapore, the Philippines, Vietnam and – perhaps most potently – Japan means that it still dominates East Asian waters.

Ross however went on to explain that of course the situation has seen some development in recent years – describing how naval developments by the Chinese, though not great enough to fully challenge the US, have still reached a level at which they could cause losses on the American side if a war was to be waged at sea. This is a cost that previously would not have had to be considered, yet nevertheless Ross warns us against imagining that this means the Chinese are gearing-up to challenge US supremacy in the area. Past experience shows that the Chinese have been – and will be in future – cautious. However, the current situation is that of broadened levels of presence and surveillance – in particular the Chinese vessels that keep a long-term presence in the vicinity of the contested diaoyu islands. The latter does not act in direct opposition to US presence but does underline the fact that the Chinese have a presence that can certainly not now be overlooked.

Looking to the future, Ross took us through various challenges posed to the state of US-China relations in 2012, namely when China displayed assertive behaviour towards to the Philippines and in the sending of Chinese ships to challenge Japanese vessels over the diaoyu islands. Though neither of these skirmishes were direct challenges to the US, tensions were undoubtedly heightened and though the US decided not to intervene they did response by expanding levels of cooperation and alliance with their East Asian allies and thereby reminding China of their own presence in the area. However, in terms of future development, China’s desire for a bigger navy will be restricted by a number of factors including cost, technology and, most specifically, the need to balance it with land requirements: with 14 neighbours, 4 of which have nuclear capabilities , China is growing in a ‘dangerous neighbourhood’ and therefore maritime security is unlikely to be their prime concern. ON the other hand, US policy since 1999 has made it clear that they take ever increase in Chinese power as a challenge to US supremacy.

But what if China succeeds in juggling development on both the land and at sea? Ross boldly stated that we live in a world where war is normal. And a world where we have witnessed too many times the cold fact that it is the power-transition wars that destroy the global order are the nastiest of them all (think about WW1, WW2, the Napoleonic Wars…) Ross however told the room to relax – he’s optimistic, wars don’t happen accidentally and both sides will hope to avoid it as far as possible. Instead, if a war is to be fought, Ross predicts that this will take place in the water. The land of China and the land of the United States are not going to be threatened which, consequently, means that the stakes are lower and the war is thus less likely to escalate. Things finished on the positive note that if the worst clash to take place in the process of China’s rise is a limited naval war between the US and China then things aren’t so bad.

Professor YU then took over to focus on the area of relations between China and Japan. In the last two years, tensions between the neighbours have openly intensified over the diaoyu/senkaku islands in the South China Sea. Professor YU warned that the fundamental element of patriotism on both sides mean that the coastguards are prepared to act with severity and, indeed, there is no crisis management mechanism between the 2 guards – it is the captains on each sides’ ships who are responsible for making the arbitrary decision of whether or not to launch an attack in each case, putting the conflict on a precariously unpredictable path. Though attempts were made to initiate a maritime security dialogue between the two sides last year, each side displayed little inclination to resolve the issue – not least, Yu states, because both are coming from fundamentally irreconcilable beliefs. Things are further complicated by the long-standing alliance between Japan and the US. Yu reinforced Ross by describing the US as the ‘puppeteers’ of maritime security in the region and with the 7^th US fleet being based in Japan, it is clear that were China to actively provoke Japan, America would aid Japan. However, we were reminded that it isn’t in the interest of US to side with either – beyond this issue, in many areas it is to the advantage of the US to be an ally with China. However, if something was to happen, Yu gave a salutary reminded of the rich tangle of emotions tied up with the issue of the islands and, not least, the refusal to ‘lose face’ from either side which means – he predicts – if something were to occur, any conflict would rapidly escalate.

Lastly, Professor Yu touched upon the impact of the UN’s Exclusive Economic Zone (EEZ — the seazone over which a state has special rights over the exploration and use of marine resources) in the region of the South China Sea. Citing various recent skirmishes, our speaker described how the US and China are having to work out how to navigate around the other’s presence in the area in a relationship that is increasingly connected with regional security too, finishing on the reminder that there are always three – not two – players to be considered within the conflict between Japan and China and, more broadly, the sea.

Q&A

The first question of the night immediately drew our attention back to the controversial issue of the islands dispute, with Professor Yu further emphasising the fundamental ideological schism between Japan and China on the issue which makes a resolution currently such a distant prospect. Meanwhile, Professor Ross suggested that if we want to fully understand the issue we should not be focusing on which way the law would direct things to go because, after all, legal regulations in the area hardly apply to the issue at hand. From an American perspective however, Professor Ross felt that the issue was nothing to get worked-up about – let the two sides get on with their ‘screaming match’ he encouraged.

We moved onto a question which had clearly occurred to many in the room: how far can we use Russia’s recent activity in Ukraine as a possible model for a similar unilateral change to the status quo being made by China in the future? Both speakers agreed on the cautious (though indubitably cheering) response that the Chinese rarely initiate dramatic shifts to the status quo such as is occurring currently in the Crimea, with Ross adding that the military and political costs that would be at stake for the Chinese in making a unilateral move that posed a threat to the US are far greater than any incurred by the Russians in this case.

Further questions focused on Obama’s handling of Sino-US relations in conjunction with other alliances around the world, with Yu commenting that China’s current greatest challenge is domestic, not the US. Having said that, Sino-US relations patently cannot be bad if either side wishes to continue to flourish in the current global environment. We finished with an analogy of today’s situation between the two great powers and events prior to events of the Sino-Japanese war and 1914 (mindful of upcoming anniversaries this year for both.) Professor Ross fiercely discouraged any analogies with 1914, describing how East Asia has been the most peaceful area on earth since the Cold War and lacks the set-up of many countries all heaped on top of each other that made Europe so inflammatory.

Report by: Clio Chartres

March 25th,  2014

China and the USA: Maritime Issues in East Asia

Supplementary Materials

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event #33
March 25th,  2014

Prof. Robert Ross, Professor of Political Science
Boston College and Associate, John King Fairbank Center for Chinese Studies, Harvard University
Prof. YU Tiejun
Associate Professor, School of International Studies, Peking University

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February 24th,  2014

A Recipe for the Future:
The New Rural Reconstruction Movement

Supplementary Materials

1) **recommended**
in Global Capitalism and the Future of Agrarian Society,
chapter 5 China Experience_ Comparative Advantage_ and the Rural Reconstruction Experiment PDF

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