Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: Chinas Security and the Peripheral States Carlyle A. Thayer December 19, 2011

[clientnamedeleted] Wewouldlikeyourassessmentofthefollowingissues: 1) This year aseries ofincidents took place inthe South China Sea region,such as increasing assertiveness by the Philippines and Vietnam claiming sovereignty. How doyouevaluatethesecurityenvironmentfacedbyChinaonitsperiphery? ANSWER: The year 2011 may be compared to a soccer match. In the first half the game was played aggressively. In the second half the game settled down and the playerswentabouttheirbusinessinanormalmanner.Thiscomparisoncangoonly so far as in the real world there is no soccer referee to control the actions of the players. This year there wereanumber of incidents involving foreignleased oil exploration vessels operated by the Philippines and Vietnam with Chinese civilian fishery and surveillance ships in the South China Sea. In the second half of the year, after the ASEAN members states and China agreed to Guidelines to Implement the Declaration on Conduct of Parties (DOC) both sides resumed talks to adopt confidencebuildingmeasuresandapossibleCodeofConduct. Theincidentsthattookplaceinthefirsthalfof2011arearesultoftwofactors.The first is Chinas claim to historical rights in the South China Sea within its ninedash line ushaped map. The second is the award of oil exploration contracts by the PhilippinesandVietnaminwatersthatfallwithintheushapedline.Chinaviewsthe actionsofregionalstatesaspoachingChinasresources.ThePhilippinesandVietnam claim that they are exercising their sovereign rights in their Exclusive Economic Zones under the provisions of the United Nations Convention on Law of the Sea (UNCLOS). Both the Philippines and Vietnam appealed to other regional states and extra regionalpowersforsupport.ThePhilippinesinvokeditsMutualSecurityTreatywith the United States, for example. Vietnam too has internationalized the South China Sea issue and drawn in the U.S., Japan, India and other countries. These countries would have been concerned anyway because they have national interests in maintainingpeaceandstabilityoftheSouthChinaSea.Conflictingsovereigntyand territorial claims in the South China Sea cannot be settled by the threat or use of

2 force.AllegationsthatChinesecivilianshipscutthecablesofoilexplorationvessels operatedbyVietnamdamagedChinasreputation. The important point is that China and ASEAN member states worked thissituation outdiplomatically.TheirseniorofficialsagreedonGuidelinestoImplementtheDOC, and this document was approved by their foreign ministers. China will host a meetingofaJointWorkingGrouptodecidewhichcooperativeactivitieslistedinthe 2002 DOC can be carried out to build confidence among the parties concerned. China and Vietnam also agreed on Basic Principles for the Settlement of Sea Disputes. This agreement relates to the waters at the mouth of the Gulf of Tonkin andisanimportantstepinaddressingmaritimedisputes.Ifsuccessfulthismaylay the basis for both sides to address more contentious issues related to the South ChinaSea. ManyscholarsandlegalspecialistsarguethatChinashouldclarifywhatitmeansby historical rights to the South China Sea. Is China claiming the land features (rocks, reefs etc.)? If so, is China claiming these are islands under international law and therefore entitled to a 200 nautical miles Exclusive Economic Zone? Or is China claimingallthewatersinsidetheushapedline?ArethesewatersconsideredChinas territorialsea? Whateverthecase,ifChinacouldclarifyitsclaimsthiswouldbeanimportantstep. SingaporesFormerMinistryissuedastatementinMay2011thatcalledonChinato clarifyitsclaimsintheSouthChinaSeawithmoreprecisionasthecurrentambiguity as to their extent has caused serious concerns in the international maritime community. 2) Another important change in the security environment of China's southern periphery is the United States "return to Asia" strategy. Do you think the United StatesispursuingacontainmentpolicytowardsChina?Orisitjustpreventiveaction bytheUnitedStates'againsttheriseofChina? ANSWER: When U.S. Secretary of State Hillary Clinton stated the United States is backinAsiashewasspeakingfigurativelynotliterally.TheU.S.hasneverleftAsia. Its troops and ships remain in Japan, South Korea and Guam. U.S. trade and investment has not altered either. Clinton meant that the United States would become more involved in the security affairs of the region than the Bush Administration. The Obama Administration is primarily concerned to support multilateralinstitutionssuchasASEANandtheASEANRegionalForumthattheBush Administrationseeminglyneglected. Chinas rise and increase in all dimensions of national power has given rise to the viewthatU.S.primacyisonthedecline.TheObamaAdministrationseekstochange theseperceptions.TheeventsintheSouthChinaSeainthefirsthalfoftheyeargave risetoconcernsbysmallerstatesintheirrelationswithamorepowerfulChina.The U.S.soughttoaddresstheseconcerns.NotethatinJuly2010whenSecretaryClinton first raised South China Sea issues at the ASEAN Regional Forum she was one of twelveministerstoraisethisissue.Fifteengovernmentleaders(notincludingChina) alsoraisedSouthChinaSeaissuesattheEastAsiaSummitleadersretreatindicating theirconcerns.

3 Containment is a Cold War term that characterized U.S. policy, first, towards the Soviet Union and then against the Peoples Republic of China after Chinas interventionintheKoreanconflict.Inbothcasestherewerenosubstantialeconomic linkagesbetweentheUnitedStatesandtheSovietUnionandChina.Inthepresent periodtheU.S.andChinaarejoinedatthehipineconomicterms.Containmentis notapplicabletothissituation.Chinahasglobaleconomicinterests. China is a rising military power as well as an economic one. China gives great publicity to its antiaircraft carrier ballistic missiles, stealth fighters and aircraft carrier. All of this has created a security dilemma for East Asian states. A security dilemma refers to the case where one state increases its military power for defensivepurposesbutotherstatesfeelthreatened.TodaytheU.S.seekstobalance Chinasmilitarypowernotcontainit.Inotherwords,theU.S.seekstomaintainan equilibrium of power rather than U.S. hegemony. The Obama Administration initiatedtheStrategicandEconomicDialoguewithChinaatministeriallevel. 3) President Obama made a series of comments on Chinarelated issues both at APEC Summit and East Asia Summit. However, some of the comments were not perceivedasfriendlybyChina.Forexample,ObamapressedChinatoactlikegrown up nation, and Stated that U.S is not afraid of China etc. What is your opinion of PresidentObama'scomments? ANSWER:TheUnitedStateseconomyisinamessandU.S.selfconfidencehasbeen undermined. Many of these economic problems are the doing of the U.S. itself. In such circumstances differences over economic policy with China are magnified by domesticpoliticsintheUnitedStates.ThereisawidespreadviewintheU.S.thatthe renminbi is undervalued, Chinese stateowned enterprises receive special government support, and intellectual property rights are not properly protected. AccordingtomanyAmericansthethreeissueswhencombinedgiveChinaanunfair advantage in economic relations. In addition, the U.S. does not view China as a market economy and thus restricts certain types of commercial relations. Many of President Obamas remarks were addressed to a domestic audience in the U.S. WhenObamaspokeofnotbeingafraidofChinahemeanttwothings.First,theU.S. was more than willing to compete with China economically. Second, the United States had a massive military advantage in power visvis China. These remarks wereintendedfortheinternationalcommunityandAmericasalliesinparticular. 4) Australia has agreed that the U.S. may station troops permanently in Australia; doesthismeanthattheU.SisleadingAustralia'sChinapolicy?HasAustraliajoined theU.StocontainChina? ANSWER: Australia is a sovereign and independent country. It must be made clear that it does not and will not grant foreign powers a permanent base in Australia. AustraliaisalsoatreatyallyoftheUnitedStatesandhasfoughtalongsidetheUnited States in every war and conflict since 1945. Australia agreed that the U.S. could rotate 250 marines in and out of training facilities near Darwin. This number is expected to reach 2,500 in a few years time. This is an extremely tiny figure. For many years Australia and the United States conduct a major military exercise, Talisman Saber, that involves nearly six times as many troops as the 2,500 figure.

4 Thisinvolves training in conventional warfare. So why the exaggerated claims over therotationofahandfulofMarinesinDarwin? China is Australias largest trading partner. Australia does not want to have to choose sides between China and the United States. On security matters Canberra and Washington share a convergence of interests including wanting more transparency on the intentions behind Chinas military transformation and modernization. Nevertheless, Australia tries to build relations with the Peoples Liberation Army (PLA). This year the PLA Navy and the Royal Australian Navy conductedjointlivefiringexercises.Inshort,Australia,liketheUnitedStates,does notseektocontainChina. 5) How do China's neighboring countries, including Australia, think of China in general? ANSWER:Itisdifficulttogeneralizeabouttheviewsofsomanycountries.Generally, all countries in East Asia welcome Chinas economic rise. If they dont welcome it, theyrealizeitisafactoflifethatcannotbechanged.Chinaseconomicrisepresents opportunitiestotradeandinvestinChina.ManyviewChinaseconomicintegration intotheglobaleconomyasafactorcontributingtoglobalandregionalsecurity. RegionalcountriesaredividedonChinasdomesticpoliticalsystem.Formercolonies uphold sovereignty and nonintervention in a countrys internal affairs. These countriesaregenerallynoncommittal.Asiasliberaldemocraticstatesareconcerned aboutwhattheyperceiveastheauthoritariannatureoftheChinesepoliticalsystem. Theyareconcernedabouthumanrights,includingtherightsofreligiousandethnic minorities.TheseconcernsaffectrelationswithChinafromtimetotime. Chinaiswidelyadmiredasacivilization.ForeignstudentsflocktoChinatostudyits language,cultureandhistory.Touristscometoseeancientsitesandbeautyspots. Countriesintheregionaredivided,however,onthemilitarydimensionsofChinese power. Obviously the United States and its major allies Japan, South Korea, Australia and the Philippines are concerned about the development of power projection capabilities. These are concerned by what they view as Chinese assertivenessintheSouthChinaSea.AlliedtothisareconcernsoverChineseultra nationalismandtheextremelanguagebysomemilitarycommentators.Manyother countries in the region do not take such a confrontational stance. These countries maybedividedbetweenthosewhoviewacontinuingU.S.presenceasstabilizingfor regional security. Others see U.S. policies as destabilizing and do not want to get drawn into great power rivalry. The ASEAN states, as a group, are quite willing to workwithChinaasastrategicpartnerandworktogethertoaddressnontraditional securityissues. 6)ThereisaviewthatChinahasnorealfriendsintheneighborhood,doyouagree withthisview?Why? ANSWER:Formostofitsexistence,thePeoplesRepublicofChinaeitherkeptitself outofregionalaffairsorwassubjecttocontainment.Itwasonlyinthemidtolate 1990swhenChinaadopteditsnewsecurityconceptthatChinahastriedtoengage withregionalstates.Takingthisview,perhapsmoretimeisneededbeforeChinaand

5 othercountriesbecomerealfriends.Trustandconfidencetakealongtimetotake rootanddevelop.Thiscanonlyhappenthroughcommonendeavours. BecauseChinadoesnotpursueformalalliancerelationsitisdifficulttomeasurewho are Chinas real friends. China has developed close relations with a number of countries, including North Korea, Pakistan, Myanmar and Cambodia. Throughout mostofEastAsiathesefriendsarenotviewedfavourably. If China does not have real friends, however this is defined, China has friendly relations with a wide spectrum of countries, especially in Southeast Asia. In 1999 2000,Chinasignedlongtermcooperativeframeworkagreementswithallthestates ofSoutheastAsia.Chineseleadersregularlymakehighlevelvisits.Athicknetworkof bilateralrelationshasdeveloped.ChinaalsoworkswithASEANasadialoguepartner andasamemberoftheASEANRegionalForum. 7) If you could give China's highlevel policy makers some suggestions on China's diplomacy toward states on its southern periphery, what kind of specific recommendationswouldyougive? ANSWER:TherearethreemajorissuesthatnegativelyaffectChinaspromotionofits peaceful rise and harmonious world concept. These are perceived assertiveness in theSouthChinaSea,Chinasmilitarymodernization,andpolicyofnotrejectingthe use offorcein Taiwancontingencies.Chinacoulddomuchtoimprove itsstanding onthefirstissuebyclarifyingindetailthenatureandextentofitshistoricalclaims to the South China Sea. When China is accused of assertive actions in the South China Sea it should refrain from condescension and outright rejection of these complaints.Whenincidentsoccurtheyshouldbeinvestigated,jointlyifpossible. China should step up efforts to develop greater transparency in the military field. Chinaalreadyproducesimpressivedefencewhitepapers.ButChinashouldengage morewiththeUnitedStatesinworkingoutacommonunderstandingonmaritime security issues. China should refrain from cancelling militarytomilitary contacts whenpoliticaldifferencesarise. Currently crossstrait relations between China and Taiwan are experiencing an upward swing. Chinas massive build up of ballistic missiles across the strait, and Chinasinsistenceonretainingtheoptiontouseforce,areoutmoded.Chinatalksof the U.S. having a Cold War mentality; I would say that China has a Civil War mentality.ChinamustgiveprioritytoworkingoutamodusvivendiwithTaiwansoit canreduceitsballisticmissileforcesaimedatTaiwanandeventuallydropthethreat touseforceincertaincontingencies. 8)WhatdoyouthinkthesecurityenvironmentonChina'ssouthernperipherywillbe like in 2012? What are your reasons? What are the challenges facing China's diplomaticstrategytowardsitsouthernperiphery? ANSWER: In 2012, Chinas relations with East Asian states will be dominated by maritimesecurityissuesingeneralandtheSouthChinaSeainparticular.Chinanow facesaloosecoalitionofstatesthatwanttoseepositiveprogressinimplementing thecooperativeactivitiesintheDOCandprogressinnegotiatingaCOC.IfChinagave these issues top priority it would recover some of its lost prestige and political standingintheregion.Chinashouldactswiftlytoapprovecooperativeactivitiesand

6 projects and not draw them out. China should also ensure that negotiations on a COCfortheSouthChinaSeaprogressrapidly. ChinaspolicyonmaritimeissuesconfrontsawidespreadregionalviewthatChinaor itscivilianadministrativeagencies.haveactedtooassertivelyintheSouthChinaSea. In addition, many view Chinese policy as seeking to play on differences within ASEAN. Chinas dam construction on the upper reaches of the Mekong River has aroused concerns of the lowerMekong states.Thecentralgovernment in China, as distinct fromprovincesandspecialautonomousregions,needstobecomemoreinvolvedin theworkoftheMekongRiverCommission.Chinaneedstoadoptalongrangeview ofdevelopmentinmainlandSoutheastAsiaanduseitswealthtoassistsustainable development. There are concerns that China views dam construction as a matter of national sovereigntyandthusaninternalmatterforChina.Chinaneedstoembracetheview that its interests are inextricably bound with the sustainable development of downstreamstates. China faces special problems with Myanmar and Vietnam. China must do more to regulate the behaviour of its private businessmen in northern Myanmar. This has arousedxenophobicfearsthatChinaisbitbybittakingoverMyanmar.Chinashould also join with other regional states in encouraging current reform efforts in Myanmar.Chinashouldnotstayaloofandviewtheactionsbyoutsidestatesaspart ofanencirclementorcontainmentpolicy. China needs to do much to repair its relations with Vietnam. This extends beyond partytoparty and governmenttogovernment ties to the population in general. Both sides have used the internet and cyberspace to attack each other in ultra nationalist terms. A concerted effort must be made to control this expression and buildpositivepeopletopeoplerelations.Thiswillhelpreducedomesticpressureon VietnamtostanduptoChina. In sum, as China continues to grow in wealth and power it will generate suspicion andfearsaboutitsfuturepolicies.Chinamustworkcontinuallytoovercomethese attitudes.ManyviewnextyearasoneofapowershiftinChinainwhichnationalism will take hold and scuttle winwin strategies towards the countries on Chinas southern periphery. Chinese statesmen must rise above this and see Chinas long terminterests.Addressingtheseregionalconcernsthroughawholeofgovernment approachwillpaydividends.