China Needs to Decide What It Wants To Be

For decades the Chinese government has deployed both soft and hard power to promote China's influence and status, while at the same time discouraging interference in Chinese affairs.
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For decades the Chinese government has deployed both soft and hard power to promote China's influence and status, while at the same time discouraging interference in Chinese affairs. China's foreign policy has been premised on its desire to ensure uninterrupted economic growth while at the same time promoting political stability and prolonging the rule of the Chinese Communist Party. In doing so, China has portrayed itself on one hand as a good neighbor while at the same time pulling its weight and making sure its neighbors know who's boss.

China's modern geopolitical psyche is characterized by the often used Chinese saying "hide one's brilliance and bide one's time". China sees its return to global prominence as inevitable, based on its modern history as a global leader in such areas as trade, finance, and industrial production. Today China's global strategy, and its path to global prominence, are to embrace multi-polarity while supporting the principle of state sovereignty and self-determination.

Multi-polarity generally works well for China in the international arena, where China has perfected the art of sitting on the sidelines and waiting for an end game to emerge, then swooping in and claiming the spoils. A good example of this was the Iraq War, where China did not participate in combat but aggressively pursued oil contracts, ultimately winning a large percentage of them. However, China prefers uni-polarity when it comes to its relations with Asian nations. While it maintains a veil of collaboration and cooperation with its Asian neighbors, in reality, China prefers that its neighbors snap to attention when China makes a proclamation, or takes action in the region. This is very much in evidence with the Senkaku and Spratly Islands.

The U.S. 'pivot' to Asia is viewed as a containment strategy by Beijing, and an effort to disrupt China's emerging sphere of influence in the region. Neither Beijing nor Washington have been clear about where their 'core' interests reside on this subject. Beijing has been vague, simply stating that it seeks to ensure political and territorial integrity. Washington has been similarly vague, by for instance maintaining official neutrality over disputed territorial claims such as the Spratly and Senkaku Islands, and Mischief Reef. This raises question about how the U.S. would react if a conflict with China actually erupted, and raises the risk that either side could cross an unknown red line.

Similarly, the gradual remilitarization of Japan is viewed with great suspicion by Beijing. While on one hand, Beijing sees the Japan/U.S. military alliance as a 'check' on the notion of Japan's gradual remilitarization, through the alliance the U.S is enhancing Japan's ability to defend itself. The Abe government has recently raised military spending, hardened its stance on the Senkaku Islands, and taken steps to free the military from constitutional constraints on external military action. From the Chinese perspective these actions are alarming, particularly given its modern history with Japan.

The Chinese government knows it has inferior sea/military resources and is concerned by the prospect of a prolonged war with the U.S. Its military is developing plans for early/swift strikes against U.S. carriers, command and control centers, and even satellites. China is developing large numbers of missiles to target U.S. military assets. The U.S. has in turn developed plans to inhibit China's ability to do so. Both sides appear to be preparing for the possibility of a war, which should be a source of concern for the countries in the region.

To counter the impression among many Asian states that China is arming itself to the teeth with potentially offensive intentions, China has sought to soothe ASEAN's fears and deliver the message that its growing power is not a threat. It has signed a variety of Declarations and Treaties on codes of conduct and cooperation, and is a participant in a variety of forums, such as APEC. It has committed to collective rules and institutional practices, and says it wants to be a good regional citizen. But China still has unresolved border disputes with a number of nations, including Bhutan, India, Japan, the Philippines, Taiwan and Vietnam.

China also excels at 'creative interpretation' of some of the provisions of the treaties it has signed. For example, in 2002 it signed the 'Declaration on the Conduct for Parties in the South China Sea', though it has not been true to Article 5 of the Declaration , which calls for "self-restraint in the conduct of activities that would complicate or escalate disputes in uninhabited islands and reefs". Similarly, China ratified the UN Convention on the Law of the Sea (UNCLOS) in 1996, but in 2006 said it would not accept procedures referring to 'binding decisions' and compulsory processes under the Law. It considers certain Treaty rules to be inconsistent with national policy. At the same time, it has chosen to invoke UNCLOS law for its claim against Japan on the Senkaku Islands.

So China tends to 'cherry pick' which provisions of international treaties it chooses to comply with, which does not give its neighbors much comfort. China's 'new normal', then, is to push right up to the boundary of internally acceptable behavior, then briefly cross over the line, retreat, and do the same again, until it establishes a new normal for what is deemed acceptable behavior. China's behavior on the world stage is not that of a teenager taking a car on a first test drive, but rather that of a shrewd, skilled and experienced negotiator. While it has ably influenced the course of global political and economic affairs, it has also clumsily addressed certain regional issues and willfully violated WTO rules.

China is not a poor developing country with limited resources and a lack of sophistication. It knows exactly what it wants, and how to get it. In fact, it could probably teach the West a few things about the way the world works. Let there be no doubt -- this is China's century and in time China will become more capable militarily in Asia than the U.S. Its ability to influence the regional landscape should not be underestimated. But China needs to make up its mind about what it ultimately wants to be, and to be seen to be -- the good neighbor or the 800 pound gorilla. It cannot be both.

*Daniel Wagner is CEO of Country Risk Solutions, a U.S.-based cross border risk advisory firm, and author of the book "Managing Country Risk".

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