The COVID-19 inflation episode: Lessons from emerging markets


The COVID-19 inflation episode: Lessons from emerging markets



Past Event

Asian Regionalism and Its Implications for Sino-U.S. Relations

Monday, December 11 - Tuesday, December 12, 2006

On December 11-12, 2006, the Brookings Institution and the Shanghai Institute for International Studies (SIIS) held a conference in Shanghai on Asian regionalism and Sino-U.S. relations. The conference was divided into five substantive sessions:

  • Regionalism from a global perspective;
  • A survey of existing and emerging regional organizations and structures in Asia;
  • Assessment of the implications of regionalism for other actors in the region;
  • Implications of Asian regionalism for Sino-US relations;
  • Looking ahead: implications of growing regionalism for US and Chinese interests.

Full Conference Summary

The meeting began with a discussion of the nature and value of regional organizations, with the American side highlighting the importance of the role of shared values in helping to unite such bodies, as well as mission statements that are consistent with and subordinate to broader global frameworks and institutions. The U.S. side also noted its concerns that regionalism in Asia not come at the expense of American interests. This concern exists particularly with reference to the development of the Shanghai Cooperation Organization (SCO), but also stems from concerns over the East Asian Summit and the prospect that ASEAN might declare Southeast Asia a nuclear-free zone.

The Chinese side noted that Asian regionalism was largely a response to the 1997-1998 Asian financial crisis and was built on Asian values of consensus, harmony, mutual respect for sovereignty and non-interference in the internal affairs of member states. An emerging sense of common Asian identity is also helping to fuel regional integration.

Discussing the functional value of Asian regionalism, the two sides agreed that the origins of Asian regionalism lay in the security structures built up during the Cold War, but that greater focus had, in recent decades, been placed on economic integration, with the American side pointing out that it is in no one’s interest for China and Japan to compete in building an exclusive economic zone in Asia. The two sides agreed that if the Doha round of WTO talks fails, Asian regionalism is likely to receive an additional spur. The Chinese side worried that the Bush administration did not have enough political capital to ensure the successful completion of the Doha round, while the American side urged that the Chinese take a lead role in pushing for the successful conclusion of the talks.

Differing views emerged on the value of SCO and the role of regional security structures, with the American side warning that SCO may do China more harm than good if it is conceived of as a vehicle for pursuing hegemony in Central Asia or a way to avoid relying on market means to obtain energy resources. The U.S. side suggested that in the future SCO might be able to help mute conflicts between India and Pakistan, and wondered if the U.S. might be invited to be an observer in the organization. The U.S. side proposed thinking about the six-party talks framework (i.e., cooperation between the US, Japan, South Korea, China and Russia) as a possible model for the future security architecture of East Asia. The Chinese side noted that SCO has played an important role in helping to define and police borders during a difficult period, has served admirably in countering trans-border terror threats, and is not designed as a vehicle to exclude the West in general or the U.S. in particular. At the same time, the U.S. should bear in mind that the countries of Central Asia are simultaneously making political and economic transitions towards democracy and open markets, and these are wrenching transitions that take time, so the U.S. should be patient and supportive of these processes.

Assessing broader regional trends, the Chinese side expressed optimism that the ASEAN 10 + 3 framework might in the future serve as a vehicle for greater regional security integration. Additionally, the Chinese side noted that China and Japan should invest in building a better relationship, and discussed the possibility of a future China-Japan free trade agreement. The Chinese side argued that India, with its ‘Look East’ policy, is seeking greater involvement in Southeast Asian affairs, but this is unlikely to progress very far until India’s own economic growth makes it more integral to the region. The Chinese side stated that it does not intend to tolerate a nuclearized Korean peninsula, but at the same time recognized that Beijing does not yet have a clearly-defined answer to the question of whether it is more advantageous for China to live with a friendly nuclear power on its border or to live with a hostile non-nuclear neighbor.

The American side agreed that Sino-Japanese relations should improve, while noting that the Japanese side does not appear to want China and Japan to drive regional integration, but rather to allow ASEAN to serve as the spur for greater regionalism. Additionally, the U.S. side noted that any regional integration that occurs should not ignore the importance of the region’s pre-existing security architecture, i.e., the U.S.-Japan and U.S.-ROK security alliances. The Chinese side wondered if the U.S. would object to Japanese participation in a Japan-ASEAN FTA or in the East Asian Summit. The U.S. side replied that Washington would have no problem with Tokyo’s participation in these forums, so long as the U.S. had a voice in the development of Asian regionalism.

With respect to the evolution of regionalism, the Chinese side noted a clear-cut gap between the understandings of leaders in China and the U.S. on the nature, function, and implications of regional and sub-regional institutions in Asia. China has generally been more optimistic about and hence more willing to embrace Asian regionalism as a positive development, while the U.S. tends to harbor more reservations about the prospect of Asian regionalism and, as a result, has stepped up efforts to influence the latter’s evolution. Generally speaking, the U.S.appears to believe that U.S. bilateral alliances and partnerships in Asia have anchored regional peace and security. In contrast, China regards U.S. regional alliances and the U.S.-led security architecture with suspicion and worries that these alliances may impinge upon its interests in the Taiwan Strait. Further, the China is concerned that the proposed initiative for a ‘community of democracies’ in the region will prove to be exclusive and ideological, and will thereby serve to increase strategic distrust and competition between Beijing and Washington.

The American side noted that Washington having a voice in regional bodies is not as important as these bodies having rules and codes of conduct that are supportive of peace and security in the region and that integrate well with the pre-existing rules of the international system and do not conflict with U.S. defense commitments to American allies.

On the issue of energy, the Chinese side expressed its frustration at being unable to purchase advanced technology from the U.S., while the American side urged the Chinese to rely more on international oil markets to meet their energy needs.

With respect to the future of regional integration, the Chinese side noted that rapidly growing intra-regional economic interdependence is the strongest driving force for regional cooperation and integration in Asia, while security cooperation is taking a higher position on the regional agenda. The American side agreed with this analysis, adding that because China is outgrowing the Asian region and becoming a global power, it actually shares a common interest with Washington in making sure that Asian regional structures fit with and reinforce the global structures, not vice versa. The key question now is how to transform ad hoc sub-regional security structures such as the six-party talks into a formal regional security mechanism.

On the question of North Korea, the U.S. side stated that Washington expects the six-party talks to show North Korea that there is a cost to the latter’s ‘bad behavior.’ The whole world, including the U.S., looks to Beijing to clearly define this ‘cost’ to Pyongyang, as well as to convey that the only way to avoid sanctions is by embracing the thorough and verifiable de-nuclearization of North Korea. The Chinese side once again stated that Beijing is firmly committed to the goal of a non-nuclear Korean Peninsula and does not consider North Korea as having a unique value to China.

China’s Strategic Thinking about Asian Regionalism: An Overview

The strategic thinking underlying China’s calculus of Asian regionalism differs notably from that of the U.S. in several crucial regards:

First, despite China’s newly acquired status (and expanding influence) as a ‘stakeholder’ in the international system, Beijing seems to maintain that China’s ‘stakes’ are still largely regional (especially with regard to East and Southeast Asia) and that China cannot and will not play the role of a ‘global power’ for the foreseeable future. Fundamentally, this modest self-assessment is not only a reflection of the reality that China’s vital political, economic, trade, and security interests reside directly and principally in the Asia-Pacific region, but also a natural outgrowth of Beijing’s current ‘peaceful development’ strategy as adopted under the Hu Jintao leadership since early 2004. As a result, in addressing the multitude of issues, problems, and challenges in today’s world politics, Beijing has not yet fully developed the habit of thinking with a global mind – i.e., considering these issues, problems, and challenges always with an eye to maintaining and strengthening the existing international system. This aforementioned self-assessment, however, contrasts noticeably with the U.S. expectations that as befitting a ‘stakeholder,’ China should start to transcend its regional interests in favor of global considerations and assume a greater responsibility in cooperating with the U.S. in preserving and improving the current international political and economic order.

Second, despite China’s ‘stakes’ in the international system, Beijing seems to regard the international system not as a fixture with unalterable, a priori norms and rules, but as a dynamic, evolving process whose most desirable outcome is the so-called ‘democratization of international relations,’ which presumably will put the Western and non-Western countries on an equal footing in redefining and even remaking the norms and rules of the existing international system. Viewed in this light, the loose, consensus-oriented structures of Asian regionalism actually best fit with China’s perceptions of how the future international system should work. In effect, the ‘fundamental principles’ of Asian regionalism – respect for sovereignty and equal participation, consensus through consultations, gradual progress, non-interference in each other’s domestic affairs, and making all parties comfortable –constitutes an obvious alternative to and bulwark against the alleged Western and primarily U.S. tendency to “trample upon other countries’ national sovereignty and interfere with their internal affairs.” Such principles also ensure that no single power (especially the U.S.) could dominate the region at the expense of other countries’ sensibilities and interests. Under these circumstances, Beijing considers the development of Asian regionalism to be a positive complement to the trends of globalization. China’s views, however, contrast sharply with U.S. expectations that Asian regionalism should adapt itself to the existing international frameworks, not vice versa.

Third, although maintaining peace and stability in the Asia-Pacific region has become a major objective of Chinese foreign and security policy in recent years, Beijing has never explicitly recognized the importance, or even indispensability, of preexisting U.S. bilateral alliances and/or partnerships in the region to the attainment of this policy objective. Instead, Beijing obviously prefers collective security to bilateral alliances as the political foundation of regional security structures. Essentially, this cautionary attitude reflects not only China’s lingering distrust of long-term U.S. intentions in Asia, but also Beijing’s acknowledgement of long-held suspicions on the part of many countries in the region about China’s long-term strategic designs. Against this backdrop, in proposing that regional security be maintained through multilateralism based on communication, consultation, and cooperation, Beijing is endeavoring to accomplish a double purpose: both to minimize the likelihood of U.S. dominance in regional security structures and to reassure the region that China intends to integrate constructively into the status quo as a responsible, rule-abiding great power. This Chinese consideration, however, contrasts directly with U.S. expectations that pre-existing American bilateral alliances and/or partnerships in the region should at a minimum serve as a useful frame of reference for building an effective regional security organization.

Finally, it should be noted that under current circumstances neither China nor ASEAN are in any hurry to involve the U.S. in the establishment of any tightly disciplined and intervention-prone regional structures, which are at odds with their cherished principles of ‘respect for sovereignty and equal participation’. Furthermore, given lingering Sino-U.S. strategic mistrust, Beijing does not consider it desirable for Washington to have a greater say in regional security affairs, since this would inevitably force China to recognize the utility of pre-existing U.S. bilateral alliances and/or partnerships and thereby constrain the PRC’s strategic options. Likewise, ASEAN countries are also concerned about a future in which they would have to choose between Chinese or U.S. dominance, thereby constraining their strategic options. Nonetheless, both China and ASEAN seem to have recognized that the problem of having multilateral forums that are all talk but no action hinders efforts toward Asian regionalism and that the U.S. should at least be given an appropriate voice in the development of the regional structures. If the topic of Asian regionalism is indeed included in the agenda of future Sino-U.S. strategic dialogues, it might well be transformed from a problem into an opportunity for promoting mutual understanding between Beijing and Washington.