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Five uncertainties about China’s future

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A former senior Chinese diplomat praised the journey of Prime Minister Yasuo Fukuda to Beijing last December as a “wonderful visit.”

I was in Beijing less than 10 days after Fukuda’s trip and was pleased to hear many Chinese laud the speech at Beijing University as “having elucidated to both the Chinese leadership and general population the rationale for and importance of healthy China-Japan relations.”

It is indeed gratifying to note that the rapprochement between China and Japan initiated by former Prime Minister Shinzo Abe in late 2006 has continued under Fukuda.

Both nations have come to appreciate the importance of defining the bilateral relationship as a “strategic partnership based upon mutual benefit.” Expectations are high for President Hu Jintao’s planned visit to Japan this spring — the first such visit by a Chinese head of state in 10 years.

Despite this recent improvement in bilateral ties, however, there remains a lack of consensus in Japan about how to perceive China’s rise. I believe that this is primarily attributable to uncertainties in Japan about China’s future course.

In his speech, Fukuda stated: “It even seems that our fundamental awareness of how we should understand each other is on less than firm ground. On the Japanese side, this stems in part from the fact that China has achieved tremendous development in an extremely short period of time and people were simply not ready in terms of how to interact with this neighbor that had appeared on the scene as such a massive presence.”

There is no question that China has achieved spectacular development over the last three decades and has done so peacefully. However, this success, while on the one hand immensely beneficial for regional prosperity, has also given rise to the following uncertainties about China’s future:

Can the Chinese leadership live up to the promise made at last year’s 17th Party Congress to sustain more than 8 percent annual GDP growth and quadruple China’s per capita income by 2020?

Whether China can effectively cope with numerous social, environmental, and political challenges remains an open question. In particular, intra- and inter-regional income disparities, dangerously polluted air and water supplies, and reported systemic corruption within the government all pose a clear danger to continued stability.

A failure to effectively address these challenges could foment further social unrest and prevent the Chinese Communist Party (CCP) from achieving its economic goals.

Will the CCP pursue political reform and/or democracy?

A prominent Southeast Asian politician of Chinese descent claimed last year that Chinese DNA is not suited for democracy; that Chinese do not believe, with their view of the universe, that democracy is the best way to produce good government. On the other hand, recent developments might suggest otherwise. Last February, Chinese Prime Minister Wen Jiabao wrote in People’s Daily that “democracy, the rule of law, freedom, human rights, equality and mutual respect are not exclusively capitalist values. They have come about as the result of the gradual advance of history. They are common human values.”

What are China’s strategic intentions? China’s defense budget has increased by more than 10 percent annually for the last 29 years and last year surpassed that of Japan for the first time. Uncertainty about China’s strategic intentions is compounded by the military’s lack of transparency and recent incidents, in particular a provocative anti-satellite missile test in January 2007, have cast doubt on the effectiveness of civilian control.

What role will China play in Asia?

China has cherished its historically dominant position in Asia and has come to view itself as “the Middle Kingdom” (“China” is written in both Chinese and Japanese with characters meaning “middle” and “country”). As China’s economic and military expansion continues, neighbors are concerned that Beijing may seek to re-establish itself as regional hegemon.

Is the international system capable of sustaining and accommodating continued Chinese growth?

The Chinese economy not only brings prosperity to its own citizens but now functions as the primary driver of global economic growth. However, how sustainable this growth is remains uncertain. Both China’s accumulation of massive dollar assets as a result of its continuing balance of payments surplus with the United States and its huge (and growing) demand for energy and other natural resources could endanger the international economy. China will also play a critically important role — for better or worse — in determining the future health of the global environment.

The manner in which China aims to address the five uncertainties delineated above will have an important impact on how Japanese view China. How they assess these uncertainties will determine whether Japanese support a policy of engagement, hedging,” or some variation, such as hedged engagement or “congagement” (a combination of containment and engagement).

While the Japanese defense establishment understandably emphasizes the importance of hedging, one must also be aware of the fine line between hedging and containment and work to minimize the dangers posed by the security dilemma. The security dilemma, in its simplest form, states that the “ways and means by which a state tries to increase its own security may actually end up decreasing its security if its policies lead other states to feel threatened and strengthen their own defenses.”

The Chinese military should also be aware of these dangers. If China’s military expansion remains nontransparent and continues at its current pace, states with interests in East Asia will, at some point, begin to perceive China as a security threat. Institutionalized trilateral security dialogue among Japan, the United States and China would be one way to minimize such threat perceptions.

Generally speaking, the best way to address uncertainties about China’s future would be to increase dialogue and exchanges to create an environment of mutual trust and minimize misunderstandings. While this dialogue is necessary at all levels of government and society, it goes without saying that summit meetings are most important.

There are high expectations for Hu’s visit to Japan this spring.

A career diplomat, Koji Watanabe previously served as Japanese ambassador to Russia, Italy and Saudi Arabia. As a senior fellow at the Japan Center for International Exchange, he is actively involved in “track-two” trilateral dialogue among Japan, China and the United States.