China’s Threat to Asia

Introduction

For the last few decades, China has shown great growth in its economy, population, and military. It attracted the attention of the world community to its foreign policy (Roy, 1994). A considerable amount of the products that countries all around the globe import are ones produced in China. The growth of China’s influence in international relations and especially in Asia is considerable. The world’s community has faced a serious dilemma, considering whether China is a threat to Southeast Asia or not.

China’s Economic Threat

The rapid economic growth of China caused alarm among its Asian neighbors since it is increasing its military power. Academics and politicians expressed their fears that Chinese economic expansion would have a negative impact on the economic plans of the Association of Southeast Asian Nations (ASEAN) members. Moreover, the World Bank concluded that China’s accession to WTO (World Trade Organization) also influenced negatively the income of the ASEAN economies. Nowadays, China is receiving a major part of the foreign investment that flows in the Asian region. It shows the disproportional share of these flows between China and other Asian countries. According to the latest investigation, the number of inflows to China increased to $50 billion per year (Ravenhill, 2006). At the same time, the inflows to ASEAN decreased significantly. Its rate in 2004 was near $24.8 billion. In 1992-1997, ASEAN and Hong Kong received an average of 40% of all the foreign inflows; from 2000 this rate halved (Ravenhill, 2006).

The negative impact of China on ASEAN was based on data for the period before China’s joining WTO. However, the available information covers the first three years after China entered the WTO. Among the major categories that characterized ASEAN’s and China’s position and its evolution in the markets of the United States and Japan, there were the following:

· electrical machinery;

· office machinery;

· sound equipment;

· footwear;

· clothing;

· telecommunications.

Electrical Machinery

This section includes electrical switching machinery, semiconductors, household electrical equipment, and cathode-ray tubes. Talking about the Japanese market, it is important to mention that this sector is the only one where the imported products rate from ASEAN has continued to be higher than from China.

ASEAN’s exporting value was substantially growing during the 1995-2003 period. Starting from 1995, it grew by approximately two and a half times before 2003. Electrical machinery constituted one-third of all ASEAN-manufactured products exported to the Japanese market. According to Ravenhill (2006), in 1995, ASEAN export rate to the Japanese market was 14.6%. It had risen to 24.3% by 2000. On the other hand, the export of Chinese products to Japan grew with great speed from 7.1% in 1995 to 23% in 2004 (Ravenhill, 2006). However, it was still lower than that of ASEAN.

Talking about the U.S. market, ASEAN had its peak in 2000. According to Ravenhill (2006), by 2004, the share of the U.S. imports had fallen under a 13% rate, and it was lower than in 1995. As for China, the value of its export was gradually increasing from 1995 to 2004. Its growth was approximately five times higher during the regarded period.

Office Machinery

Office machinery is a category that includes computers. China started with the export rate to the U.S. market that was less than one-fifth of the one of ASEAN in 1995. After China entered the WTO, it rapidly expanded its exports. In 2003, the Chinese export value surpassed the one of ASEAN. Also, it appeared that China accounted to expand the export of its office machinery products to the U.S. market through the increase of their quality and competitiveness. In contrast, ASEAN countries lost the U.S. market share. Export value of its office machinery products did not even match the rate reached at the end of the 1990s. Also, it had to be mentioned that this category of products held one-third of all ASEAN’s products exported to the U.S. market.

The same situation was with the Japanese market. The ASEAN share decreased, while the Chinese share increased even more than in the U.S. market. In 1995, ASEAN held one-third of all office machinery products imported in Japan. Also, its rate was six times higher than the Chinese one. In 2002, the rate of office machinery products imported from China exceeded the import rate from ASEAN. In 2004, China had a twice higher value of export to Japan than ASEAN. China held 44% of all office machinery products imported to Japan (Ravenhill, 2006). Like in the U.S. market, ASEAN export rate to the Japanese market was gradually decreasing starting from 2000, and ASEAN lost the market share.

Sound Equipment and Telecommunications

The value of the U.S. import of the telecommunications and sound equipment, such as radios, TVs, DVD players, and VCRs, from ASEAN, showed growth by two thirds in the period between 1999 and 2004. However, it was scarce in comparison with its rate in 1995. According to Ravenhill (2006), ASEAN share of the U.S. market in this category was 22% in 1995, and it fell under 14% in 2004. In comparison with China, ASEAN held a 75% higher export value to the U.S. market than China in 1995 (Ravenhill, 2006). However, in 1998, the Chinese export rate of the telecommunications and sound equipment exceeded the one of ASEAN. By the end of the observed period, the Chinese export value to the U.S. market was twice as high as the ASEAN export value. China’s share in the U.S. imports was approximately 28%.

The situation that prevailed on the Japanese market was similar. The value of import from China in this category exceeded one of ASEAN in 2002. By 2004, China increased the rate of its export to Japan four times. Meanwhile, ASEAN also had some growth. Its rate increased by 5% from its peak in 2001. In percentage, China’s share in Japan’s import increased from 14.4% to 44% (Ravenhill, 2006). According to Ravenhill (2006), ASEAN’s share rate fell from 35% to 28% at the same time.

Clothing

Clothing was one of the two categories where China was already the main exporter to Japan and to the U.S. markets. Talking about Japan’s market of clothing, by 1995, China became a dominating player with 56% of the total value of products being imported by Japan in this sector (Ravenhill, 2006). During the period between 1995 and 2004, it was growing even higher. The value of imported clothing products from China increased the rate of more than 70%. As for China’s share in Japanese imports of clothing, it grew to 80% (Ravenhill, 2006). In comparison, according to Ravenhill (2006), ASEAN’s share in Japanese imports of clothing decreased from 6.5% to 3.0%.

As for the U.S. market of clothing, China and ASEAN had similar market shares and an increase in import value until 2001. However, after 2001, imports from China started to expand quicker than from ASEAN. The full negative impact of Chinese exports to the U.S. market in ASEAN could be felt after the cancellation of the MFA quotas system in 2005.

Footwear

This category was the second one where China already had a great influence and was the major player. Also, it was the sector where ASEAN expected to feel considerable difficulties because of the rapid growth of Chinese exports. The U.S. market showed that in 1995, the number of Chinese exports was four times bigger than the amount from ASEAN. China was the main source of imports in this category for the United States. Since 1995, the gap between Chinese and ASEAN exports has become wider. During the period between 1995 and 2004, China’s share in the U.S. market grew from less than one half to more than two thirds. At the same time, according to Ravenhill (2006), the ASEAN’s share fell from 12% to under 5% during the regarded period. ASEAN’s absolute value of imports also fell by 50% from its 1997 peak.

The same situation occurred in the Japanese market of footwear. By 1995, China was also the main source of imports and the major player in the Japanese footwear market. Mirroring the world’s footwear imports from China, the Japanese ones showed rapid growth. As in the U.S. market, China’s share of the Japanese market of footwear grew from one half to more than two thirds. In comparison with the U.S. market, ASEAN also showed growth in exports to the Japanese market. After a fall during the years of the financial crises, ASEAN gained its 1998 level by 2002. The total value of footwear imports from ASEAN remained below its peak in 1997. On the other hand, ASEAN increased the value to more than 25% above the 1999 rate by 2003 (Ravenhill, 2006).

Summary

According to the researches during the period between 1995 and 2004, ASEAN had a grim prospect for the economic growth and the share in foreign markets. ASEAN showed both the rise in the total value of imports and the increase in the share of the markets only in one category. It was the electrical machinery exports to Japan. And despite the market share fall, ASEAN increased the total value of the products exported only in the telecommunications sector. Talking about clothing, because of MFA quotas governing in the U.S., the value of the products imported from ASEAN increased, but it lost the market share. As for the other sectors, ASEAN showed weak performance in the Japanese and the U.S. markets. ASEAN did not only lose the market shares, but also the total value of the exported products. In order to manage China’s economic threat, the ASEAN countries have to increase the quality and competitiveness of their products. Moreover, they have to try to regain the market share that they lost.

China’s Military Threat to Asia

China poses a long-term danger to the Southeast Asian region (Roy, 1994). According to Roy (1994), China only starts to realize its potential, and China’s influence will be increasing from year to year. Possible China’s threats to Asia may be divided into two main categories. The first one is challenged in maintaining the regional order, and the second one is conventional military threats (RAND, 2015). These categories are quite different. The challenges in maintaining the regional order have a lower profile; so, it is hard to anticipate them and counter effectively. On the other hand, they are more likely to materialize. Talking about the second category, the threats in it are easy to identify. Also, they are more capable of deterrence, response, and deliberate planning.

Conventional Military Threats

Talking about conventional military threats, two of them may be distinguished:

1. The aggressive position of China in the South China Sea can threaten the freedom of navigation. Through it, China may force Japan, ASEAN, and the United States to accept its political demands. If Asia faces this problem, there are some ways to solve it. The U.S. may gain support from some countries from ASEAN and establish the defense of the sea-lanes, or some individuals from ASEAN may ask for such support from the U.S. It is obvious that the U.S. naval forces will play the primary role in the defense of the facilities and territories of the ASEAN countries. Also, the U.S. air forces may be called to help the naval forces.

2. China can establish and maintain control over the Spratly Islands, all or the most part of them, in a forceful way. In order to reach this goal, China may ask for military assistance from some individuals from ASEAN. Such Chinese operation may involve using the force against the ASEAN countries’ territories. China may defeat the opposing military forces or make others accept their demands. Also, China can establish control over more territories. ASEAN countries can ask for a more visible presence of the U.S. military forces to manage this problem. It may include the deployment of the U.S. aircraft and naval vessels to demonstrate that the U.S. is ready to use force to maintain its security commitments.

Threats to Southeast Asia

China has performed low-profile activities in disruption of the Southeast Asian sea-lanes because of different considerable reasons. First of all, China has great motivation to maintain freedom in navigating. More than $1 trillion in trade pass through Southeast Asian sea-lanes each year, and China’s share of it has been $100 billion (RAND, 2015). China depends on these sea-lanes, and this dependence will be growing. According to RAND (2015), China’s needs in energy have experienced 160% increase, and its needs in Persian Gulf oil have tripled. The considerable amount of them has been imported using Southeast Asian sea-lanes.

Second, China’s attempt to disrupt shipping in Southeast Asian sea-lanes may cause a negative impact, first of all for China. It may provoke some organizations or countries, like the U.S., the European Union, ASEAN, and Japan, to administer economic sanctions. Among the negative factors of the economic sanctions, there is a decrease in investments, a reduction in technology transfer and trade. Also, the U.S., the European Union, and Japan may block credits from international financial institutions to China.

Third, even if political and economic barriers fail to hold Chinese military activities, there are a number of problems that China has had with its naval forces. The Chinese navy is still vulnerable to surface naval attacks and aircraft attacks. China also has some problems with logistics supports, and readiness; inadequate training, communication, command, and control; and lack of modern equipment. Also, China will face serious constraints in using sea mines. The difficulties may occur during the mine-laying operations. Navy is vulnerable to counterattacks while ships are laying mines. Moreover, great difficulties may occur while distinguishing between friendly and enemy shipping. In addition, ASEAN’s mine-countermeasures capabilities are growing. Altogether, these factors show that any blockage using sea mines will be ineffective (RAND, 2015).

In conclusion, it is obvious that China will not perform any activities to threaten the freedom of navigation in Southeast Asian waters for the next decade. The reasons for this are possible reactions of the U.S. and other countries. It also may cause that Southeast Asian states will provide support to the U.S. military operations. Therefore, the results of the offensive actions of China may be the military loss and significant increase in the U.S. presence in the Southeast Asian region.

Territorial Claims to the Spratly Islands

The problem of ownership of the Spratly Islands dates back to a century when Japan, China, and European colonial powers competed for control over the South China Sea. According to Gertz (2015), nowadays, the PRC, Malaysia, Vietnam, Taiwan, Brunei, and the Philippines demand for the overlapping parts of the Spratly archipelago and waters adjacent to it. The PRC, Taiwan, and Vietnam claim the whole area according to historical rights (Gertz, 2015). As for China, its demands are based on the exploration and discovery of the South China Sea by Chinese explorers and traders (Babones, 2015).

According to RAND (2015), talking about a possible armed conflict over the Spratly Islands, there are two main scenarios:

1. China attacks the other occupants’ outposts. It will quickly overwhelm the enemy’s garrisons and establish its own outposts. Even if the attacked forces try to counterattack, none of the potential combatants can maintain the main forces in the Spratlys for more than a few days. So, it is obvious that the sea-lanes would remain open, the main ones, and there will not be any disruption of shipping near the Spratlys.

2. Conflict may be triggered by exploitation activities, miscalculations, accidents, fisheries disputes, or provocative activities by one or more parties. Because of the impossibility of sustaining long-term military operations in that area, any hostilities will be of the limited duration.

As for territorial claims, there is one more threat. China and Japan did not officially demarcate water borders, and they are still using a geographical equidistance line (Panda, 2015). According to Panda (2015), China’s offshore rigs are situated near this line and some of them barely on the Chinese side. However, the building of new rigs in the future may cause misunderstandings between China and Japan. As a matter of fact, it may cause armed conflict.

Ambiguous Threats

Because of the reasons outlined above, the most likely scenario is that China will continue its successful “island-hopping” tactics. Also, it is obvious that China will not perform any military attacks on ASEAN forces or territories. Protection of Chinese fishermen, anti-smuggling operations, and maritime claims may be the occasion for Chinese military forces to engage neighbors (RAND, 2015).

One of the challenges for ASEAN countries and the international community is China’s periodic efforts to establish control over some individual reefs or islands (RAND, 2015). It can be made under the cover of the order-keeping operations or research expeditions. China has a wide range of opportunities to act in such away. This would only expand the environment of social and political disorder. Because of the weakness of the ASEAN governments, they are not ready to prevent attacks on Chinese ethnic communities. It can give Beijing a formal reason to begin an intervention. The only way for the ASEAN is to have a political will, increase the military capabilities, and build an effective defense against China’s threats in this region.

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Therefore, the interaction between ASEAN and China and economic and political conditions will shape the influence abilities of China in the Southeast Asian region. Moreover, China’s military threat is not principal or the only security concern for some of the Southeast Asian countries (RAND, 2015). Domestic stability holds a higher priority for a number of them. As for Japan, its government is responding to China’s military threat by a considerable increase in defense spending. It has reached a record level. Also, there was a proposition to change the pacifistic constitution to achieve greater military flexibility (Babones, 2015).

Conclusion

Starting in 1979, China has achieved rapid economic growth and may be considered as an ally and a competitor to the Southeast Asian countries at the same time (Kui, 2007). No one can deny that China is gaining considerable influence and developing with great speed, increasing its military power and improving its economic situation. Every country in the Southeast Asian region recognizes China as a threat. Even the U.S. is planning to re-deploy approximately 60% of its sea and air power to Asia for countering China’s aggressive expansion (Harner, 2014). Managing China’s threat is not an easy task. As for the economic aspect, only increase in the quality of the product and their competitiveness may help Southeast Asian countries get back their positions in trading. As for the military threat, the higher military spending and maintenance by the world community may prevent China from aggressive actions.