How China May Have Overplayed Its Hand

Illustration by Emiliano Ponzi

Over the past two weeks, all of Asia watched with alarm as China forced Japan to back down in a maritime dispute by downgrading diplomatic ties, and tolerating if not encouraging public street protest against Tokyo as well as halting shipments of critical industrial metals to Japan. The face-off symbolizes Beijing's new attitude: once officially committed to rising peacefully in cooperation with its neighbors, China now seems determined to show its neighbors—and the United States—that it has growing military and economic interests that other countries ignore at their peril.

China has reopened old wounds with India by publicly raising its claims to territory in the Indian state of Arunachal Pradesh, which triggered a troop buildup by both countries along the border. Beijing has proclaimed the South China Sea to be a "core national interest," a term previously used for Taiwan and Tibet (among other places) to signal that Beijing will brook no outside criticism of its claims to a wide swath of the sea, which has strategic value as well as potential oil wealth. Increasingly, the Chinese Navy has harassed American and Japanese vessels sailing in Asian waters. And Beijing has largely stonewalled complaints by countries in mainland Southeast Asia that new Chinese dams on the upper portions of the Mekong River are diverting water and hurting the livelihood of downstream fishermen and farmers. China also has harshly condemned joint U.S.-South Korean naval exercises, and applied growing pressure on Southeast Asian nations to jettison even their informal relations with Taiwan, which once had extremely close ties to countries like Singapore and the Philippines.

China's aggressive behavior represents a sea change in longstanding Chinese policy. Deng Xiaoping used to urge Chinese leaders to keep a low public profile in foreign affairs. During the Asian financial crisis of the late 1990s Beijing launched a charm offensive toward its neighbors, who still remembered the revolutionary, interventionist China of Mao Zedong's years, when it backed the genocidal Khmer Rouge and insurgents in Burma, among other causes. This softly-softly approach reaped rewards. Beijing inked a free-trade agreement with the Association of Southeast Asian Nations that came into effect earlier this year and helped make Beijing one of the leading trading partners of nearly every country in the region. In the late 1990s and early 2000s China upgraded its role in Asia's regional organizations, including ASEAN, and shifted the focus of its relationship with India, the other emerging giant, from old hostilities to new commercial links, including partnerships between India's world-leading information-technology firms and their Chinese peers. The region's diplomats praised China's consensus-building approach, and its sharp contrast to the "with us or against us" style of the George W. Bush administration.

In some ways, the change in attitude is an extension of China's enduring interest in protecting its sovereign rights, dating back to well before Deng's time as leader. More than that, though, the global economic crisis has left China in a far stronger international position than many of its neighbors or the U.S., and Chinese leaders and diplomats now seem to feel they can throw their weight around on international issues. Just as Chinese leaders increasingly lecture Western officials in public about the breakdowns of free-market capitalism, so too the Chinese have become more willing to make public demands from other Asian countries. "There is a certain extent of hubris in [China's] actions," says Lam Peng Er, an expert in China-Japan relations at the National University of Singapore. China recently overtook Japan as the world's second-largest economy, and some view that as a "coming of age," he says.

But perhaps the biggest reason for the change in Chinese behavior is the tension around the leadership changes in Beijing, planned for 2012, when Hu Jintao is expected to step down for presumptive heir and current vice president, Xi Jinping. Unlike Deng, who fought in the Chinese civil war—or even former leader Jiang Zemin, who had strong relations with the Army—Hu and Xi do not have a clear constituency or link to the military, says Kerry Brown, a senior fellow at the Asia Program of Chatham House, a British think tank. As a result, the new leaders may be less able than in the past to control a defense establishment now pushing for its own hawkish interests, such as expanding China's naval sphere of influence, that aren't always consistent with China's broader diplomatic goals or the more dovish Foreign Ministry. Already, Hu and Xi, lacking Deng's power base, are finding they have to accommodate the armed forces. Many China experts—and, even privately, some Chinese officials—argue that the tension may continue in some form at least until after 2010.

But all this toughness is coming at a cost: an Asia-wide backlash that could cost Beijing a decade's worth of accumulated good will. Earlier this year, a report by the Lowy Institute in Australia found that "rather than using the rise of China as a strategic counterweight to American primacy, most countries in Asia seem to be quietly bandwagoning with the United States." Another survey, by the Center for Strategic and International Studies, a Washington think tank, found that most elites in Asia said the U.S. would be the greatest source of peace in the region 10 years from now, while China would be the biggest threat. For that reason, Southeast Asian nations have recently welcomed a greater American defense presence. Vietnam, which theoretically enjoys a close relationship with China as a fellow communist state, has launched a strategic dialogue with its old enemy the U.S. and may embark upon a nuclear deal in which Washington provides Hanoi with enrichment technology that China had once hoped to provide. Within 10 years, Vietnam could be America's de facto closest ally in Southeast Asia, other than Singapore. Indonesia, also courted intensely by China, this year embarked upon a new "comprehensive partnership" with the U.S. that includes new military links; at the U.S.-ASEAN summit in New York, Indonesian Foreign Minister Marty Natalegawa publicly rejected China's demand that Southeast Asian nations keep America out of the South China Sea dispute. Even Cambodia, a country heavily dependent on Chinese aid, has opened new defense ties with the Pentagon; the Cambodian and American militaries conducted joint military exercises, nicknamed Angkor Sentinel, earlier this year.

At the same time, many Asian nations are making deals with each other to create a balance against China. Vietnam recently announced a security dialogue with Japan, while India has invited Japan to make enormous new investments in Indian infrastructure—deals that, under different conditions, could have been captured by Chinese companies. What's more, nearly every nation in Southeast Asia is laying out cash for weapons. According to the Stockholm International Peace Research Institute, the amount spent on weapons purchases in Southeast Asia nearly doubled between 2005 and 2009 alone, with Vietnam recently paying $2.4 billion for Russian submarines and jetfighters designed for attacking ships. Given that countries like Vietnam and Malaysia, another major recent arms buyer, face few threats within Southeast Asia, the weapons systems can only be designed to repel China. Beijing is also increasing its military spending by as much as 15 percent annually in recent years, suggesting the tensions between China and its neighbors are only just beginning.

With Isaac Stone Fish in Beijing