Asian countries on China’s periphery are historically where China has ex-
erted greatest influence. They have long been the arena of the majority share
of Chinese foreign policy effort. This area is where China interacts most with
the United States, the world’s remaining superpower. It features sovereignty
issues (e.g., Taiwan) and security issues (e.g., US defense presence) that have been uppermost among Chinese foreign policy priorities. The Chinese military plays a major role in Asia, in contrast to other parts of the world where
its role is minimal. Chinese involvement in other regions has focused in
recent years on trade and related economic interests. Nevertheless, Asia is
much more important for China’s economic growth than other world regions.
Even after more than two decades of repeated efforts following the Cold
War, China’s rise in the region, despite its importance, remains encumbered
and appears to make China unprepared to challenge US regional leadership.
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The Xi Jinping government’s assertive policies toward its neighbors arguably
have made the situation worse. Without a secure foundation in nearby Asia,
China will be inclined to avoid serious confrontation with the United
States. 16
China’s Advances and Limitations in Asia
China’s advances in Asia have depended heavily on the growth of Chinese
trade with neighboring states, which made China the leading trading partner
of most nearby Asian countries. Led by foreign-invested enterprises in Chi-
na, which accounted for one-half of China’s foreign trade, consumer and
industrial goods were produced in China with materials and components
imported from foreign enterprises, frequently in other parts of Asia. China
was often the final point of assembly and the majority of the goods went to
markets in developed countries, notably the European Union (EU) and the
United States. Overall, the result was that China’s importance as a recipient
of Asian investment, a leading trading partner, and an engine of economic
growth rose dramatically in Asia. China’s attentive bilateral and multilateral
diplomacy emphasized willingness to trade and provide financing, invest-
ment, and other support to countries, with “no strings attached.”
Along land borders with Southeast Asian and Central Asian states, China
built, often with the support of international financial institutions, networks of roads, railways, waterways, hydroelectric dams and electric power trans-mission grids, and pipelines that linked China ever more closely with these
nations. A similar close integration developed between China and Taiwan,
with the strength of the Taiwanese economy becoming increasingly deter-
mined by the island’s interchange with mainland China. Another feature of
China’s outreach to Asia was emphasis on Chinese language, culture, and
personal exchanges. This included support for Confucius Institutes and other
organizations promoting student exchanges, the teaching of Chinese lan-
guage and culture, and the facilitating of ever larger numbers of Chinese
tourist groups traveling to neighboring countries.
China’s limitations and shortcomings in relations with Asia are based on
its past belligerence throughout the Cold War, a legacy of which most Chi-
nese people are unaware, and Beijing’s recent assertiveness. Popular ignor-
ance of past Chinese aggression came because the Chinese government, em-
ploying its massive propaganda apparatus, successfully promoted to its own
people an image of consistent, principled, and righteous Chinese behavior in
foreign affairs. Conditioned by this thinking, Chinese elites and the general
public have a poor appreciation of regional and US concerns about the rise of
China. These Chinese citizens also remain heavily influenced by the Chinese
media’s emphasis on China’s historic victimization at the hands of outside
powers like the United States and Japan. As a result, the Chinese people are
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inclined to react very negatively to outside complaints and perceived in-
fringements of Chinese interests and rights.
Against this background, Chinese media commentary applauded Xi Jin-
ping’s assertiveness and firmness in advancing Chinese interests at the ex-
pense of neighbors and in opposition to the United States. The commentary
played well with audiences in China imbued with a strong sense of self-
righteous nationalism. Xi’s approach was depicted as consistent with China’s
aspiring for regional and international influence under the broad rubric of the
“China Dream.” Unfortunately, the reality was an overall worsening in Chi-
nese relations with several key neighbors and concurrent instability in the
most important arena in Chinese foreign relations.
The Xi government’s policies drove relations with Japan to their lowest
point since the Second World War. Japan’s effective firmness backed with
stronger support from an increasingly concerned United States saw Xi mod-
erate his policies—predictably without acknowledging any failure of past
policy—in seeking more normal interchange with Japan in 2015, but tensions
continued to flare periodically. Xi’s policies dealing with the conundrum in
North Korea effectively drove relations with Pyongyang to their lowest point
ever, underlining China’s inability to secure its interests in this critically
important area for China. And relations with South Korea declined sharply
with the deployment of an advanced US antiballistic missile system in South
Korea in 2017.
Most Southeast Asian nations remained reluctant to challenge China pub-
licly over its recent advances in the South China Sea, but the Chinese expan-
sion put the United States increasingly on alert as it prepared, with the assistance of Japan and Australia among others, for contingencies; the United
States also garnered overt and tacit support of some key Southeast Asian
governments. In South Asia, the Xi government’s mix of economic and
political overtures, along with demonstrations of military force in disputed
border areas and in the Indian Ocean, deepened suspicions in India; the
government in New Delhi actively advanced diplomatic, economic, and se-
curity ties with the United States, Japan, and Australia as part of national
strengthening to protect its interests as China grew in power.
Additionally, comparatively tranquil situations in areas of acute Chinese
concern in Taiwan and Hong Kong experienced adverse developments for
Beijing. Elections in Taiwan in 2014 and 2016 were sharply at odds with
Chinese interests. The new Taiwan President Tsai Ing-wen refused to
endorse the so-called 1992 Consensus that was seen by Beijing as supporting
its one-China principle; the outgoing Taiwan government had supported the
1992 Consensus but Tsai’s government saw the concept as undermining
Taiwan’s sovereignty. Beijing used strong levers of control to compel com-
pliance in Hong Kong, but it had less leverage on Taiwan’s new president; in
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neither case was there a smooth path for advancing Chinese influence and
control.
The Xi government ha
d an easier time improving relations with various
silk road and other initiatives in Central Asia and in improving relations with Russian President Vladimir Putin, with Russia now isolated from the West.
But the bottom line remained a series of serious challenges in the most
important arena of Chinese foreign relations that seemed almost certain to
complicate any notion of China attaining regional dominance and leadership.
Strengths and Shortcomings in China’s Economic Influence
The Xi Jinping government’s foreign policy toward developing countries in
Asia and elsewhere in the world involved a massive push for Chinese invest-
ment and financing abroad, advancing and modifying the strong “going out”
policies of Chinese investment and financing in these areas seen in the previ-
ous decade. The previous effort focused on attaining access to petroleum and
other raw materials needed for China’s resource-hungry economy. Chinese
economic reforms during the Xi administration have sought to reduce such
intense resource use. The push for foreign investment and financing has
aimed to enable construction abroad of Chinese-supplied infrastructure, pro-
vided by the enormous excess capacity of Chinese companies for such con-
struction and supply, now that major infrastructure development inside China
has been curtailed under recent economic reforms.
The image purveyed by Chinese officials and lauding Chinese commen-
tary was one of enormous Chinese largess, unprecedented in the annals of
world affairs. China was depicted using its more than $3 trillion in foreign
exchange reserves in seeking mutually beneficial development throughout
the world. The results were multibillion-dollar commitments to various Chi-
nese silk road funds; new development banks led by China; and regional
initiatives in Africa, Latin America, Europe, and the Middle East. China
pledged infrastructure in unstable Pakistan valued at $46 billion, a respon-
sible Chinese official said Beijing’s overall plan for investment in Africa
over the next decade amounted to $1 trillion, and Xi personally pledged
investment in Latin America of $250 billion over the next decade. Foreign
commentary often came to echo the Chinese commentaries in seeing Beijing
as the dominant leader of international economic relations in Asia and much
of the developing world. 17
By contrast, a closer look at Chinese trade and economic influence shows
gaps and less impact than might be expected. Indeed, the decline in Chinese
foreign trade in 2015 and 2016, combined with unsteadiness in China’s eco-
nomic conditions and policy management, undercut China’s international
importance. 18 Trade with China accounts for more than 20 percent of the trade of some Asia-Pacific countries like South Korea and Australia, but the
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trade situation does not provide a basis for Chinese dominance in those
countries. China’s important, but lower, percentage of trade in developing
countries in Asia, Africa, and Latin America usually makes China just one
among several important foreign actors in these countries and far from domi-
nant. China’s role as an investor in all these regions is surprisingly small,
especially in view of all the attention Chinese leaders have given for more
than a decade to stronger Chinese investments abroad. After more than a
decade of multibillion-dollar investment pledges, China accounted for about
10 percent of the foreign investment in Southeast Asia and about 5 percent in
both Africa and Latin America. 19
A major weakness of the Xi government’s pledges of large sums of in-
vestment and loans is that China often implements only a fraction of its very
ambitious pledges. Promises of large Chinese investments and loans to Paki-
stan and Indonesia in 2015 came with reports that China had actually imple-
mented less than 10 percent of the multibillion-dollar pledges made to each
country over the previous decade. The reasons for the poor follow-through
are readily seen in Chinese wariness after many years of less than successful
international economic involvement. A responsible Chinese official averred
that 80 percent of proposed Chinese mining deals (an important feature of
Chinese economic interaction in developing countries) have failed to be im-
plemented; and others showed that Chinese satisfaction with the push for
greater Chinese foreign investment abroad has been tempered by the fact that
the Chinese enterprises more often than not were losing money in foreign-
invested deals. There was no accounting in official Chinese media of the
losses incurred by Chinese enterprises that became heavily involved in fi-
nancing and investing in risky locales. Multibillion-dollar planned Asian
projects in Myanmar, the Philippines, Sri Lanka, and Afghanistan were
stopped or put on hold along with a variety of similar setbacks for Chinese
involvement in other countries, including Mexico, Brazil, Greece, Nigeria,
and throughout the turbulent Middle East and North African regions. 20
Corrupt practices, nontransparent agreements with unaccountable foreign
governments, unstable conditions in many developing countries, and China’s
changing needs for imported raw materials have all complicated the imple-
mentation of the support the Chinese have promised. Foreign labor unions
and other politically active constituencies often resent China’s tendency, on
the one hand, to import Chinese labor crews to carry out Chinese-supported
projects and, on the other hand, to be less attentive to international labor
standards when employing local workers. The environmental impact of Chi-
nese development projects prompted local civil-society groups to mobilize
protests against Chinese practices. Those countries recently facing repay-
ment of large Chinese loans contend with Chinese creditors assiduous in
assuring that China will be paid back. If not paid back in money or commod-
ities, China, as seen in Venezuela, Ecuador, Cambodia, Sri Lanka, and else-
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where, has been known to sometimes seek control of equity, including a
ninety-nine-year lease of land in Sri Lanka. Critics have labeled such Chi-
nese financing to poorer countries, which leads to strong Chinese control of
those countries’ economies, as the “China debt trap.” 21 Finally, China’s image as a significant donor of foreign assistance is undercut by the fact that
China still receives annually several billions of (US) dollars worth of loans
and foreign assistance from international financial institutions and national
governments. The Economist reported in 2015 that in its calculation China remained a net recipient of foreign assistance until 2011. 22
US Strengths and Shortcomings in the Asia-Pacific Region
Until the advent of the Trump administration, a comparison of Chinese poli-
cies and practices in the Asia-Pacific region with those of the United States
appeared to underline how far China had to go, despite more than two
decades of post–Cold War efforts to strengthen its position in Asia, if it
intended to be successful in seriously confronting and challenging the United
States. And without a secure p
eriphery, and facing formidable US presence
and influence, China almost certainly calculated that challenging the United
States under such circumstances would pose grave dangers for the PRC
regime.
But after several months of erratic behavior by the Trump government,
there remains uncertainty as to whether the United States will persist in its
past leadership role in competition with China in the Asia-Pacific region.
Other possibilities range from retrenchment to conflict, with both at the
extremes having potentially massive negative consequences for the existing
Asian order. In particular, if retrenchment is pursued, then the existing con-
straints on China in Asia very likely will weaken substantially and China will
have a freer hand in advancing toward regional dominance.
Nevertheless, it seems important to realize that any diminishment of US
power and influence will take time. In a word, if rising China has some
momentum, the United States benefits from massive inertia as the region’s
leading power. America has a unique and remarkably strong foundation of
nongovernment connections with Asian countries, topped off with many mil-
lions of Asians now settled in the United States and participating construc-
tively in interchange connecting the United States and Asia. The deeply
rooted US military and intelligence interchange with almost all Asia-Pacific
governments has made the head of the US Pacific Command by far the most
active senior US government representative in the region; these relationships
remain of mutual benefit and do not depend on sentiment. And despite with-
drawing from the TPP, the US market remains open and still absorbs a
massive amount of manufactured goods from regional exporters and their
component suppliers in the regional production chains. 23
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Past US weaknesses in the Asia-Pacific included the often unilateral and
arbitrary foreign policy decisions of the G. W. Bush administration, which
were very unpopular with regional elites and public opinion. As the Obama
administration refocused US attention positively on the Asia-Pacific region,
US-China Relations (3rd Ed) Page 49
