JUNE 2014 PRINCIPAL AUTHOR Christopher K. Johnson A Report of the CSIS Freeman Chair in China Studies CONTRIBUTING AUTHORS Ernest Z. Bower Victor D. Cha Michael J. Green Matthew P. Goodman 1616 Rhode Island Avenue NW | Washington, DC 20036 t. 202.887.0200 | f. 202.775.3199 | www.csis.org ROWMAN & LITTLEFIELD Decoding China’s Lanham • Boulder • New York • Toronto • Plymouth, UK 4501 Forbes Boulevard, Lanham, MD 20706 t. 800.462.6420 | f. 301.429.5749 | www.rowman.com Emerging Cover photo: Wikimedia Commons. “Great Power” ISBN 978-1-4422-4018-6 Ë|xHSLEOCy240186z v*:+:!:+:! Strategy in Asia Blank Decoding China’s Emerging “Great Power” Strategy in Asia PRINCIPAL AUTHOR Christopher K. Johnson CONTRIBUTING AUTHORS Ernest Z. Bower Victor D. Cha Michael J. Green Matthew P. Goodman A Report of the CSIS Freeman Chair in China Studies June 2014 ROWMAN & LITTLEFIELD Lanham • Boulder • New York • Toronto • Plymouth, UK About CSIS For over 50 years, the Center for Strategic and International Studies (CSIS) has worked to develop solutions to the world’s greatest policy challenges. Today, CSIS scholars are providing strategic insights and bipartisan policy solutions to help decisionmakers chart a course toward a better world. CSIS is a nonprofi t or ga ni za tion headquartered in Washington, D.C. The Center’s 220 full-time staff and large network of affi liated scholars conduct research and analysis and develop policy initiatives that look into the future and anticipate change. Founded at the height of the Cold War by David M. Abshire and Admiral Arleigh Burke, CSIS was dedicated to fi nding ways to sustain American prominence and prosperity as a force for good in the world. Since 1962, CSIS has become one of the world’s preeminent international institutions focused on defense and security; regional stability; and transnational challenges ranging from energy and climate to global health and economic integration. Former U.S. senator Sam Nunn has chaired the CSIS Board of Trustees since 1999. Former deputy secretary of defense John J. Hamre became the Center’s president and chief executive offi cer in 2000. CSIS does not take specifi c policy positions; accordingly, all views expressed herein should be understood to be solely those of the author(s). © 2014 by the Center for Strategic and International Studies. All rights reserved. ISBN: 978- 1- 4422- 4018- 6 (pb); 978-1- 4422- 4019- 3 (eBook) Center for Strategic & International Studies Rowman & Littlefi eld 1616 Rhode Island Avenue, NW 4501 Forbes Boulevard Washington, DC 20036 Lanham, MD 20706 202- 887- 0200 | www.csis.org 301- 459- 3366 | www .rowman .com Contents Preface iv 1. Introduction 1 2. The Domestic Po litical Context: From Smooth Succession to the Dawn of the Xi Era 3 A Smooth, Stable Succession 3 Xi’s Domestic Po litical Strength: Primus Inter Pares, or Just Plain Primus? 7 3. The Domestic Economic Context: Assigning a “Decisive Role” to the Market 9 The Big Picture: Putting Doubts to Rest 9 Obstacles to Successful Implementation of the Reform Agenda 12 4. Toward a New Foreign Policy Paradigm 15 Theoretical Underpinnings 15 Xi’s “Chinese Dream” 18 Relations with the United States: “New Style of Great Power Relations” 19 Relations with Other Powers: “Great Power Diplomacy” 21 5. Infl uences Shaping Great Power Diplomacy 2.0 24 Deng’s Call for Restraint Recedes 24 Strategically Employing China’s Economic Leverage 25 6. Regional Perceptions and Responses 33 South Korea 33 Southeast Asia 39 7. Things to Watch 44 Structural Solutions 44 Relying on a Sense of Urgency 46 8. Lessons for the U.S.- Japan Alliance 48 About the Authors 50 | III Preface The Asia-Paci fi c region is the center of dynamism in the international system, and events there are defi ning the security and prosperity of the world. Increased economic interde- pendence and a budding institutional architecture create a solid foundation for a vibrant and stable future, but the region also faces an array of challenges that could destabilize the security environment. For over six de cades the U.S.-Japan alliance has been the corner- stone of security and stability in the Asia Pacifi c, and it should continue to play an important role in shaping the regional order. The U.S. and Japanese governments are taking important steps to strengthen the alliance and ensure that it remains a lynchpin in maintaining regional stability and prosperity. In 2013 the Sasakawa Peace Foundation and the Center for Strategic and International Studies (CSIS) established a bilateral commission of distinguished policymakers and scholars to develop a strategic vision for the alliance. The commission, cochaired by Richard Armitage, John Hamre, and Ryozo Kato, has convened twice, most recently in January 2014 in Wash- ington. It will continue over the next two years to discuss a range of issues animating the bilateral relationship. Topics include the role of the alliance in maintaining stability in the Asia Pacifi c; networking the alliance with other key partners in the region; the North Korean nuclear and missile threat; cybersecurity; trade liberalization; shaping mutually benefi cial relations with China; energy security; and others to be determined by the com- mission. The commission has invited scholars to conduct research that will inform these discus- sions, including this assessment of China’s strategic behavior by CSIS Freeman Chair in China Studies Christopher K. Johnson and the CSIS Asia team, as it examines the factors shaping the U.S.-Japan alliance. At the request of the commission, China’s robust military modernization efforts, and particularly the rapid expansion of the capability and lethality of the Chinese military, largely sit outside the scope of this assessment. A fuller treatment of the military dimension of China’s rise has been assigned to other researchers involved in this project and will be published accordingly in support of the commission’s efforts. IV | 1 Introduction he course charted by China’s reemergence as a great power over the next few de cades Trepresents the primary strategic challenge for the U.S.- Japan security alliance and for the East Asian security landscape writ large. If China’s economic, military, and geopo litical infl uence continues to rise at even a modest pace during this period, we will witness the largest shift in the global distribution of power since the rise of the United States in the late 19th and early 20th centuries. If China in the next 10 to 15 years surpasses the United States as the world’s largest economy, it will mark the fi rst time in centuries that the world’s economic leader will be non–English speaking, non-Western, and non- democratic. Of course, these are some pretty big ifs. To stay on the path toward realizing this new global balance of power, China’s leaders will have to successfully navigate challenges they face both at home and abroad. They will have to demonstrate suffi cient foresight and fl exibil- ity to respond to immediate tactical concerns while always staying mindful of the geostrate- gic long game. They will have to prove that China’s politi cal and economic rise will be as sustainable over the next 30 years as it has been over the last third of a century, even though the task they are confronting now arguably is much more complex than that faced by their pre de ces sors. They will have to craft a workable strategic framework for channeling the country’s growing wealth and power in a way that facilitates China’s return to the dominant position in East Asia without sparking confl ict with their neighbors or, more importantly, with the United States. And, more fundamentally, they must fi nd an answer to the nagging question of what type of great power China wants to be in terms of whether or not to adhere to long-established global rules of the game that they had no hand in shaping. Against this backdrop, fi nding a means to navigate these challenges in a way that avoids war and promotes sustained regional—and ultimately global—economic growth is essential to ensuring stability and prosperity in Asia into the future. Successfully establishing a favorable balance of power in East Asia will be impossible, however, without a clearer understanding of the fundamental underpinnings and trajectory of China’s foreign policy and security strategies toward the region under the new Chinese leadership that took power in the fall of 2012. For the regional countries, understanding China will be essential to determining how they can contribute both individually and collectively to keeping Asia safe and prosperous in a period of great uncertainty and diminishing resources. President and Chinese Communist Party (CCP) General Secretary Xi Jinping’s speedy accretion of po liti cal power means that glimpses of the broad sweep of his domestic and | 1 foreign policy vision are coming into view more quickly than previous Chinese power transitions might suggest. Nevertheless, it is still very early in his presumed decade- long tenure in power, and it would be foolish to suggest at this point that we are seeing anything approximating a complete picture of where he may ultimately want to take the country. In fact, there is a solid case to be made that, aside from some general principles, Xi himself may not yet have a fully fl eshed out worldview. The challenge is compounded by the many seemingly contradictory policy inclinations that appear to be guiding Xi and his colleagues at this point in their collective term. To give just a few examples, at home, there is, at least to Western eyes, the uncomfortable pairing of a bold economic reform blueprint that calls for freeing up market forces with an unre- lenting ideological retrenchment and the return of Mao-fl avored rhetoric and party rectifi - cation tools not seen in several de cades.