Beijing just can’t seem to put the 19th century behind it in ways that could imperil this “Chinese Century.”
The 20th belonged to a United States that is now doing its worst to retrace Rome’s steps. That followed the Pax Britannica of the 1800s. Our current 100-year window is China’s for the taking. With 1.4 billion people, vast state wealth and huge territorial ambitions, what could get in the way of China’s turn to dominate humanity? Beijing’s hubris.
The obvious risk is China failing to curb financial excesses that are apparent to everyone outside President Xi Jinping’s bubble. It’s distressing, for instance, that Beijing is trying to head off a Japan-like debt crisis by borrowing with increasing abandon. But Tuesday’s Permanent Court of Arbitration (PCA) ruling against China, and China’s refusal to heed it, highlights an underappreciated risk to Asia’s biggest economy: its trajectory toward rogue-nation status.
“China obviously has the strength to drive out the Vietnamese, the Filipinos, the Malaysians, the Indonesians and almost anyone else it chooses to confront,” Christopher Hill, a former U.S. State Department bigwig and ambassador, writes in a Project Syndicate op-ed. “Southeast Asia represents but a fraction of China’s size and wealth. But does this behavior make China stronger in the region? Does a 19-century approach to pursuing economic gain justify ongoing enmity with one’s neighbors? The peoples of Southeast Asia, after all, will be China’s neighbors for the rest of its history; while their knives may be short, their memories surely aren’t.”
Students of America’s missteps may think this is the pot calling the kettle black. Hill, after all, served the administration of George W. Bush, who often seemed to court rogue-nation infamy. But China’s bullying is perhaps the biggest wild card in the world’s most promising economic region, one that increases the odds of sudden military confrontation that shakes markets. Beijing scoffing at a ruling against its South China Sea claims is a troubling omen.
To human-rights activists, China has long earned pariah-state status. Many trade officials and U.S. presidential wannabes like Donald Trump already view China’s priorities as a threat to world harmony. The same goes for Manila, which boldly filed the court case in The Hague. Even so, this moment may mark a key inflection point in Beijing’s soft power in Asia and beyond. China, Hill argues, must “come to terms with the gap between how it wants to be perceived and how the world actually perceives it. China should take a lesson from business and recognize that many of its actions and affiliations on the world stage pose serious risks to its reputation — and to its bottom line.”
True, China was widely expected to ignore The Hague. But it just gave the U.S. greater impetus to approve the Trans-Pacific Partnership. Asian governments that haven’t signed onto the U.S.-led pact — including Indonesia, the Philippines and South Korea — have new incentives to call the White House. Vietnam, a fellow communist nation, has more reason to cozy up to Washington. The new president of Taiwan, which Beijing regards as a runaway province, is even more likely to avoid the detente Xi craves. And Prime Minister Shinzo Abe has fresh ammunition to amend the Constitution to increase Japan’s military presence abroad.
So far, the Philippines has greeted China’s dismissal of The Hague ruling with welcome restraint. But this week, the Philippines and Japan, two of Asia’s oldest democracies, are conducting joint naval exercises off Manila Bay. It’s also worth noting that new President Rodrigo Duterte, a self-described tough guy, is a wild card all his own. Duterte has said he’d ride a Jet Ski out to the disputed Spratly Islands and plant a Filipino flag. Serious campaign promise or fleeting bravado? We’ll see.
Beijing does itself no favors by demanding that territorial disputes be dealt with bilaterally. It’s a recipe for political blackmail.
The PCA lacks an enforcement mechanism. Compliance is by honor system alone. Honor was the first casualty as China called “null and void” a 479-page decision that it has no “historic rights” to about 90 percent the South China Sea. A more confident and nuanced power might look in the mirror and realize its “nine-dash line bluff is fooling no one. As the PCA concluded, Beijing’s claims to a 2,000-km demarcation area and vague assertions of “historical maritime rights” are a figment of its imagination.
State mouthpieces like the People Daily were apoplectic, deriding the judgment as a “farce” and a U.S.-led conspiracy. Similarly bizarre theories accompanied Shanghai’s stock plunge in 2015. State media buzzed about “hidden” and “vicious” overseas forces driving down shares to embarrass Xi. It wasn’t villainous foreigners that crashed the market, but the sudden arrival of clarity and reality on the part of investors seeing through Beijing’s propaganda.
Tuesday’s ruling was a diplomatic reality check, and Beijing’s initial response is worrisome. Might China retaliate by declaring air-defense identification zones over disputed areas — moves the U.S. and Japan would surely defy? A better response would be to stop alienating neighbors by stepping back, taking a deep breath and opening diplomatic channels. Hammering out a code-of-conduct agreement with the Association of Southeast Asian Nations would go a long way to defuse tensions and allow China to be a stakeholder in stability, not just a shareholder.
Bullying is proving counterproductive. It’s infuriating the rest of Asia and drawing neighbors closer to Washington. Instead, Xi should suggest a Asian summit. He also should throttle back construction projects on disputed land and clarify his military-buildup plans. The thing is, many Chinese strongly believe Beijing’s assertiveness is being unfairly maligned. OK, let’s discuss it. There’s no better way to clear the air than holding talks over sharing the seas.
Economic scale alone won’t endear China to Asia. That requires treating neighbors more like partners than tributaries from some long-past century. This week, China failed the good-neighbor test dismally. If Beijing’s next move isn’t to soothe tensions, its longer-term economic interests — and Asia’s — may pay a price.
William Pesek is executive editor of Barron’s Asia. www.barronsasia.com