China - New Structure of Power in Asia

Posted in China | 16-Dec-05 | Author: Assoc. Prof. Dr. Andrea K Riemer

"In Asia the structure of power is changing: Where are the Chinese dragons heading?"
"In Asia the structure of power is changing: Where are the Chinese dragons heading?"

The traditional underpinnings of international relations in Asia are undergoing substantial change, and the rise of China is a principal cause. Strategic imperatives and economic considerations are the key drivers for China to expand its international relations into different regions in the world. Asia as traditional home turf plays a key role within the “program of expansion”. Other causes include

  • the relative decline of U.S. influence and authority in Asia,

  • the expanding influence of the Association of Southeast Asian Nations (ASEAN) and

  • the growth of regional multilateral organizations,

  • an increased technological and economic interdependence in the region,

  • and the amelioration of several formerly strained bilateral relations.

As a result of these processes, the structure of power and the nature of the regional system are being fundamentally altered. This regional perspective is striking, given that just a few years ago many of China’s neighbors raised many concerns about the possibility of China becoming a regional hegemon and powerful military threat.

In this new order, Asia’s principal sub-regions (Northeast Asia, Southeast Asia, South Asia, and Central Asia, as well as Oceania) are becoming increasingly interwoven in a network of interdependence. At the same, traditional players such as the United States and its regional allies changed their role, too. In parallel, formerly strained relations between China and Russia and China and India have been improved.

China‘s Self Perception: What stimulated China’s Engagement with Asia?

There is hardly a country that made such as remarkable comprehensive turnaround as China did in the past two and half decades. It is important to mention that economic considerations provided an important underpinning and motif to increase global and regional activism, but there are a number of additional underlying causes for the turnaround in foreign and security policy.

"China - a new ambitious space power"
"China - a new ambitious space power"
In retrospect, five events during the 1990s laid the framework for the policy changes that emerged around the turn of the millennium.

  • The events at Tianamen square and its consequences (1989)

  • The Asia currency crises (1997-98)

  • The rise of regional multilateral institutions

  • A new assessment of the value of alliances

  • Deng‘s Peace and Development Theses

Asia’s post-Tiananmen engagement of China

The post-Tianamen isolation and the end of the Cold War characterized the period from 1989 to 1996. China tried to end isolation and get out of the network of economic sanctions. Unlike much of the international community, many Asian countries did not act against the Chinese military’s killing of civilians on June 4, 1989, with sanctions. Only Japan explicitly condemned the use of force – on the other hand, Japan supported China’s reentry into the international community. The South Korean government merely stated that the “incident was regrettable,” while Southeast Asian states remained silent or, as in the Thai and Malaysian cases, noted simply that it was an “internal affair.” Japan announced at the Group of Seven summit in Houston, Texas, in 1990 that it would no longer participate in the sanctions process. Thereafter, the ASEAN states led a diplomatic campaign to engage rather than isolate China. ASEAN’s desire to engage China at this critical time left an impression on the leadership in Beijing. While the rest of the world was doing its best to isolate China, ASEAN chose to reach out to Beijing.

The Asian financial crisis, 1997–98

The second turning point was the 1997–98 Asian currency crises. Considerably shaken by the scope of the crises, the Chinese government feared that consequences would spread to China and destabilize its vulnerable banking system. At that time China already had currency controls in place that did not exist in ASEAN states. Its currency was not convertible on capital accounts. In parallel, Beijing possessed a large reservoir of foreign exchange reserves. The combination was very useful to buffer the Chinese economy. The Chinese government nonetheless acted responsibly by not devaluing its currency and by offering aid packages and low-interest loans to several Southeast Asian states. These actions not only were appreciated in the region, but also stood in sharp contrast to the posture taken by the International Monetary Fund and international creditors in response to the crisis. This support led to a changed perception of China – it turned to become more and more a responsible power. To some extent, Beijing’s policies also served to keep the fiscal crisis into perspectives. The successful crisis management boosted the confidence of China’s leaders in their role as regional actors.

China’s reassessment of regional multilateral institutions

The third catalyst to China’s new regional policy was more of a gradual process. Between 1997 and 2001, the Chinese government significantly modified its assessment of regional, and particularly security-related, multilateral organizations. Suspicion and uncertainty turned into supportiveness. China’s strategy towards was basically successful and reciprocated. Beijing stressed “omni directional diplomacy” to set up stable relations with its neighboring countries.

Until the mid-1990s, China assessed such organizations as potential tools of the United States that could be used to contain it. After some years of sending observers to the meetings of the ASEAN Regional Forum (ARF), the Council on Security Cooperation in the Asia-Pacific (CSCAP), and nongovernmental track 2 meetings, China’s Foreign Ministry became more open to them. Additionally, China found out that these institutions were compatible with China’s new security concept (NSC), which Chinese officials had begun to discuss in the late 1990s. The latest version dates back in December 2004.

Additionally, Beijing reassured its Asian neighbors a moderate approach by establishing new, constructive ties with the United States and European powers. Since then, relations with both underwent several ups and downs, but remained on a certain level of stability.

A reassessment of alliances

By 1999–2000 Beijing’s greater openness had given way to China’s participation in a number of regional multilateral organizations. China’s original logic was grounded in a zero-sum understanding of alliances (i.e., they were needed as protection against another state) rather than a positive-sum view (i.e., they had utility for the maintenance of security and stability). This argument applied not only to bilateral alliances (e.g., those between the United States and Australia, Japan, the Philippines, the Republic of Korea, and Thailand), but also to multilateral alliances such as NATO. Currently, China’s stance has changed. Alliances are viewed as a useful tool of policy making and order design.

Reaffirmation of Deng’s peace and development thesis

The mistaken U.S. aerial bombing of the Chinese embassy in Belgrade during the 1999 war in the former Yugoslavia prompted a heated debate in China. Skeptical of U.S. protestations that the bombing was a mistake, international relations experts and government officials in China began to question whether Deng Xiaoping’s 1985 dictum that China’s guiding principle, both internationally and domestically, should continue to be “peace and development” (heping yu fazhan).

Yet by 1999, in the eyes of many Chinese analysts, neither Deng’s theses appeared to be still valid and useful. This realization led to an intense domestic debate. After several months of discussions, a consensus emerged within the Chinese leadership that Deng’s general thesis was still accurate as an overall assessment of and guide to China’s foreign policy. But Chinese international affairs experts followed that China needed to be less passive and more proactive in shaping its regional atmosphere. It needed to stabilize and improve its relationship with the United States, as the single most important country for China’s national interests. This debate came to an end just after the 2000 U.S. presidential election. Chinese government was determined to get off on a good footing with whichever American administration took office.

China‘s Foreign and Security Policy Activities within an Overall Context: Measuring China’s New Regional Posture

"The Chinese PLA is modernizing its forces including a range of capacities with respect to Taiwan."
"The Chinese PLA is modernizing its forces including a range of capacities with respect to Taiwan."
China’s new regional posture rests on the following four pillars:

(1) participation in regional organizations and establishment of strategic partnerships

(2) deepening of bilateral relations;

(3) expansion of regional economic ties;

(4) reduction of distrust and anxiety in the security sphere.

Participation in regional organizations and establishment of strategic relationships

With the exception of ASEAN, which was created in 1967, the growth in regional organizations and multilateralism in Asia is a relatively new development. Many analysts of Asian affairs have long argued that the region is not mature enough for regionalism cooperation. This assessment has been clearly challenged. Although there will be a long way to go before reaching the level of regional cooperation that exists in Europe, regional organizations and dialogues have nonetheless mushroomed in Asia in recent years. These include ASEAN + 1 (ASEAN and China), ASEAN + 3 (ASEAN, China, Japan, and South Korea), the ARF, the ASEAN Vision Group, the ASEAN Senior Officials Meeting, the Shanghai Cooperation Organization (SCO), and the Pacific Basin Economic Council.

Additionally, China has set up a whole network of strategic relationships of global scope. Beijing has established partnerships with Brazil (1993), Russia (1996), France (1997), Saudi Arabia (1999), Iran (2000), ASEAN (2003), the European Union (2003), India (2003), the United Kingdom (2004), and Germany (2004).

China’s increased involvement in these regional organizations and dialogues reflect many factors. Particularly important is China’s recognition that these institutions are neither hostile to China nor set on constraining it. To the contrary, China has realized that these groupings are open to Chinese perspectives and influence and may have some utility in constraining the United States in the region. China’s increased multilateral involvement also represents the approach that certain norms that should govern interstate relations among China, ASEAN, and the SCO states. China has become approachable to the “ASEAN Way” of consensus building and group decision-making.

The Shanghai Cooperation Organization (SCO) has reached a particular level of importance. Originally established as a platform to discuss primarily on nontraditional security threats, particularly terrorism, it includes today economic cooperation and intensive political interaction. Engagement between China and ASEAN is even more impressive. Over the last few years, the two have undertaken a number of steps to strengthen their relationship. China’s expanded engagement with ASEAN and the SCO reveals a key element in Beijing’s enhanced regional profile: it has both multilateral and normative dimensions and reflects the convergence of views among states in these organizations about the importance of cooperative security and conflict management.

It also indicates an increased appreciation by the Chinese government of the importance of norms and “soft power” in diplomacy. Finally, regional organizations serve as “influence multiplier”.

Deepening bilateral relations

China’s new diplomatic posture has produced a rush of meetings and exchanges among Chinese officials and their counterparts (both civilian and military) in neighboring countries. Beijing has set up an extensive travel program for its top leaders. Finally, it regularly hosts visits with senior politicians from all kinds of countries. Summits with heads of state from virtually all of China’s neighbors happen annually, and ministerial and sub-ministerial exchanges are commonplace. China is also posting many of its most honorable and seasoned diplomats to ambassadorships in key regional capitals, where they are becoming very active and well known in local communities. China’s desire to improve its regional relations is perhaps most clearly demonstrated with regard to three states with which it had minimal interaction (even hostile relations) not too long ago: South Korea, Vietnam, and India.

China emphasizes on leadership meetings as symbols of political commitment and as means of obtaining agreements. Major visits by Chinese leaders (and, to a lesser degree, visits to China by foreign leaders) also support coordination of foreign policy issues across traditional ministerial boundaries.

Bilateral and multilateral relations and dialogs have to be seen as tools which reinforce each other. Asia has become the “hot spot” of effective Chinese diplomacy. As add-on, China regularly exercises influence on behalf of others. This helps Beijing to increase its regional influence indirectly (e.g. via the UN Security Council or the IAEA).

Expanding regional economic ties

"China's growing engagement with the Asian regions is most evident in the economic field."
"China's growing engagement with the Asian regions is most evident in the economic field."
The figures on economic growth (roughly 11 % for the first half of 2006) presented in early July 2006 point towards another peak. Additionally, China’s appetite for resources fuelled international debate. China has not only engaged in Asia, but has become a global player.

China’s growing engagement with the Asian region is most evident in the economic field. According to official Chinese customs statistics, trade between China and the rest of Asia reached $495 billion in 2003, up 36.5 percent over 2002. In 2004 and 2005, China’s exports and imports continued to climb; exports to its thirteen neighbors grew by an average of 42 percent, while imports surged on average 66 percent. Today almost 50 percent of China’s total trade volume is intraregional, and unlike China’s trade with the United States and Europe, it is relatively balanced.

Despite this rapid growth in intraregional commerce, China is a long way from dominating East Asian trade. Although China’s trade with some Asian countries is steadily growing, it remains underdeveloped with others in the region. Not only is China increasingly trading with its neighbors, and receiving foreign direct investment from them, but it is also beginning to spend more in the region. Approximately 70 percent of China’s foreign direct investment originates in Asia. Meanwhile, China’s direct investment in other Asian countries (including Hong Kong) reached $1.5 billion out of a total of $2.85 billion invested by Chinese companies globally in 2003. China has also begun to increase its aid and development assistance to other Asia nations—for example, allocating loans of $150 million for Vietnam, $400 million for Indonesia, $200 million for Afghanistan, and $200 million for Myanmar (Burma) in 2002. In 2003 China earmarked $300 million in aid for Mongolia. At the end of 2004, Beijing committed $63 million in humanitarian and reconstruction assistance to (mainly Asian) nations affected by the catastrophic tsunami. Dates for 2005 and 2006 have been arranged along a constant line.

In sum, Chinese trade and direct investment have become the engine of economic growth in Asia, and this has done much to invigorate several economies in the region, particularly helping to pull Japan out of its decade-long economic slump.

Reduction of distrust - Enhancing China’s regional security posture

The New Security Concept

Unlike many other countries, China has not undertaken a modern concept of security until recent years. In most Cold War days, the country basically stayed with a zero-sum perception of its security relations with the outside. Restrained by limited political and economic resources, China had to manage its security by adopting an isolationist policy of self-reliance.

From 1949 to 1991, the Chinese security concept underwent four periods of evolution.

1. During the Pro-Soviet Period (1949-1957), the Chinese security agenda was preoccupied by the safety of its territory, the consolidation of the new regime and the nations ideological unification.

2. Opposing Both Superpowers (1958-1970), during this period, the Chinese concept was dominated by ideological competition and threats of war. The key security priority for the PRC was an existence under massive and surprise aggression. Therefore, huge natural and human resources were diverted to acquiring the second strike capability and other war preparations. Economic development had to be sacrificed for that reason.

3. The United Front of Counter-Hegemony (1971-1981), in this period, the Chinese security concept was of real politik nature. Domestic politics changed drastically. However, successive leaders were indifferent in adopting the method of balance of power.

4. A Nonaligned Security Stance (1982-1991), this decade was an exception when no serious external threat confronted the PRC. The strategic triangularship declined by 1989. During this period, the PRC endeavors revealed signs of a transform of its security concept.

The Renewal of Security Concept

China’s new approach to Asia is evident in the security sphere, where Beijing has undertaken unilateral, bilateral, and multilateral measures to address both national and regional issues of concern. China has adopted a unilateral approach towards its military modernization.

Key Objectives

China has two primary objectives in this regard:

(1) to build and deploy a comprehensively modern military commensurate with its status as a major power; and

(2) to develop a range of capabilities with respect to Taiwan.

The demands of each objective determine how resources are allocated, which weapons systems should be procured, what types of training to adopt, and how to organize the PLA. China’s military modernization is a large and complex process with multiple dimensions. The Chinese People’s Liberation Army (PLA) is modernizing its forces, emphasizing preparations to fight and win short-duration, high-intensity conflicts along China’s periphery. PLA modernization has accelerated since the mid-to-late 1990s in response to central leadership demands to develop military options for Taiwan scenarios. In the short term, the PRC appears focused on preventing Taiwan independence or trying to compel Taiwan to negotiate a settlement on Beijing’s terms.

A second set of objectives includes building counters to third-party, including potential U.S., intervention in cross-Strait crises. PLA preparations, including an expanding force of ballistic missiles (long-range and short-range), cruise missiles, submarines, advanced aircraft, and other modern systems, come against the background of a policy toward Taiwan that espouses “peaceful reunification.” China has not renounced the use of force, however. Over the long term, if current trends persist, PLA capabilities could pose a credible threat to other modern militaries operating in the region.

Key Concerns

Nonetheless, two issues continue to be of particular concern to China’s neighbors:

(1) the development of China’s power projection capabilities (and the doctrine that would underlie it), and

(2) the potential for the use of force against Taiwan.

The PLA does not seem to have made much progress in enhancing its power projection capabilities, nor do these seem to be a priority.

  • No aircraft carrier battle groups are being constructed;

  • few destroyers capable of operating in the open ocean have been built;

  • no military bases are being acquired abroad; training over water or far from China’s shores is minimal;

  • no long-range bombers are being manufactured; and no airborne command and control aircraft have been deployed (although negotiations are under way with Russia to acquire four Beriev A-50 radar planes and, apparently, an indigenous AWACS plane is being flight-tested).

Nor is it clear whether the PLA Air Force (PLAAF) has mastered in-flight refueling for its fighters, a necessary capability for the projection of sustained airpower, although its J-10 and Su-30MKK fighters are outfitted for this task (the problem, however, is that the PLAAF does not possess adequate tankers and has not yet mastered the complicated aspects of airborne hookups).

Although the PLA Navy has about sixty surface combatants and more than seventy operational submarines, they generally do not operate beyond China’s territorial waters. The Navy is in the center of Chinese Force transformation efforts. The Blue Water Navy is still under construction. Some components are still lacking, but China is on a track towards a full-fledged Blue Water Navy. Strategic considerations, such as opening up new lines of communication and transport for resource transports are on top of the agenda. The Blue Water Navy plays a crucial role in these considerations. The key target of the PLA Navy is to develop adequate capabilities to dominate the Western Pacific by 2050.

China’s latest Defense White Paper deployed authoritatively a new doctrinal term to describe future wars the PLA must be prepared to fight: “local wars under conditions of informationalization.” This term acknowledges the PLA’s emphasis on information technology as a force multiplier and reflects the PLA’s understanding of the implications of the revolution in military affairs on the modern battlefield.

China’s neighbors watch these developments closely and rightly worry about the damage that the use of force would have on regional security and stability.

Confidence Building Measures

Author Dr. Andrea Riemer is Editor of the World Security Network: "China has set up a whole network of strategic…
Author Dr. Andrea Riemer is Editor of the World Security Network: "China has set up a whole network of strategic relations of global scope"
To a significant extent, China has been able to counter concerns about its buildup against Taiwan with a series of confidence-building measures aimed at the rest of the region. These have come in the form of both bilateral and multilateral measures of four principal types.

The first type is bilateral governmental security dialogues with several neighboring countries—Australia, India, Japan, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Russia, and Thailand.

The second type of engagement involves official military-military exchanges, which China has stepped up in recent years. Of even greater importance, China and Russia had an unprecedented, large-scale joint military exercises on Chinese territory in late summer 2005. The exercises involved ground forces, air forces, command and control units, and possibly strategic missile forces. Another exercise is scheduled between China and India.

The third type of activity is China’s increased participation in the ARF, which the Chinese government sees as a potential catalyst for establishing a regional cooperative security community.

Fourth, China has gradually increased its military transparency, as demonstrated by its recent publication of several defense white papers. The most recent one, published in December 2004, provides much more information than before on PLA doctrine and defense policy, technological innovation and defense industries, domestic defense mobilization, streamlining of military forces, rising concern about Taiwan, and the PLA’s international cooperation.

In all of these ways, Beijing’s confidence and level of involvement in regional security affairs has grown considerably in the last few years. This does not mean that regional concerns about China’s rise have melted away, but they have dissipated considerably. China’s promulgation of a new security concept has also enhanced China’s image in the region, particularly insofar as it dovetails with ASEAN’s own normative approaches to cooperative security and conflict management. The NSC is premised on the principles of mutual trust, mutual benefit, equality, cooperation, and the peaceful resolution of differences.

Taken together, these actions are having a transforming effect on Asia’s regional dynamics. For more than a century, China has been largely outside of the regional order—either by design or by circumstance—but now it has found its footing and has reasserted itself in all realms and on all issues.

Sino-American relations

The embassy bombing in 1999 (Belgrade) and the EP-3 incident in April 2001 damaged U.S.-China relations considerably. Thereafter, the United States developed a cooperative relationship with China in which the United States has stressed the values of transparency.

Nonetheless, a number of questions remain about China’s future and the choices Chinese Communist Party leaders will make as China becomes a more powerful regional and global actor. These choices will have significant implications – not only for the United States, but for China, the Asia-Pacific region, and the world.

China’s regional rise raised three basic questions for the United States:

  1. Does China’s growing power and influence come at the expense of the United States?

  2. Does it mean that the relative power of the United States is diminished?

  3. Where and how do the national interests and policies of the United States and China coincide or diverge on a host of regional issues?

Even if the relative balance of power and influence between the two countries is altered, the crucial issue is whether the United States and China can still find common ground on a wide range of regional issues. An increase in China’s regional power and influence need not result in a reciprocal decrease in U.S. power and influence. Acquiring power in a non-bipolar system is not a zero-sum game. In some cases, there may seem to be a correlation, but not in all cases.

Nonetheless, three observations emerge about the relative regional influence of China and the United States.

First, the Asian region is large enough for both the United States and China to pursue their interests, coexist peacefully, and find ways to cooperate. Second, both countries can gain or lose influence in a given sub-region and bilateral relationship—but again, it is not a zero-sum game. Third, one state’s drop in influence may not necessarily result from the actions of the other state.

Several important points can be highlighted.

First, it confirms that the regional agenda of issues that are of concern to both China and the United States is lengthy and varied, thus underling the complexity of the relationship. Second, it reveals that Beijing and Washington do not see eye-to-eye on every issue (which is not surprising), and that their interests and policies diverge or are uncertain with regard to a number of topics. Third their interests and policies converge on the majority of issues, which was not necessarily the case five or ten years ago. Although this augurs well for Sino-American cooperation on a range of issues in the years ahead, important divergences and uncertainties still remain. Some of these divergences are predictable—notably U.S. military support for Taiwan and China’s increasingly close ties with Myanmar, Russia, and South Korea. Forth, even though China and the United States share the objective of a nuclear weapons–free Korean Peninsula, Beijing has a rather soft stance towards the current regime in Pyongyang (even after the missile test in early summer 2006), while the Bush administration understandably has a different opinion on the regime. China also opposes an increased role for Japan’s Self-Defense Forces in regional security and international peacekeeping activities, as well as any augmentation of its military capabilities.

Many of the uncertainties are also of significant importance:

  • The United States seems very negative about strengthening the ARF, while China and ASEAN are actively seeking to promote it. The United States is not necessarily opposed to the ARF, but it essentially dismisses it as a “talk shop” without any enforcement mechanisms.

  • In addition, China remains unsure of the value of U.S. military forces in the region and is ambivalent about the use and purpose of U.S. bilateral alliances with Australia, Japan, the Philippines, South Korea, and Thailand.

  • Beijing is most troubled about the U.S.-Japan alliance.

  • China is also uncertain about U.S. plans to link Japan and South Korea into a regional theater missile defense system. The United States views the increasing closeness between China and ASEAN with the same uncertainty that Beijing views the growing U.S. ties with India, Pakistan, and Central Asian states.

The new National Security Strategy 2006 opens particular room for China and the region. China is encouraged to proceed its path to an open society and to a full-fledged market economy. Nevertheless, some cautiousness can be read between the lines of the document. Still, the U.S. is considering China a could-be antagonist.

Sino-Russian Relations

Chinese-Russian relations have changed remarkably in the past 5 years. This is due to a change self-perception, strategic interests and targets. 2 agents in the region Asia-Pacific present themselves as powerful player. It seems obvious that many misunderstandings and conflicts could be cleared. One is ready to see new perspectives and targets.

Russia found a partner who compensated the one or the other strategic weakness (e.g. one could not prevent NATO-enlargement or the US presence in some central Asian states). Additionally, the cooperation proved to counter-balance Western alliances.

The power-network was considerable influenced and shaped by the cooperation. The war in Iraq even strengthened the cooperation. China is one of the biggest clients in the Russian oil business and competes with the US and Japan. India and China cover approx. 80 % of purchases of Russian defense and armaments goods and services. For reason, Russia is highly dependent on working relations.

China and Russia are not the only powers in the region, but they are well-established, well-networked and strong enough to deter up-coming competitors. The region is molded by an intensive network of relations, which has led to a high level of dependences. China has a slight advantage because of its economic development and its potentials. China is a “Status-Quo-Power“, i. e. it is highly interested in maintaining the situation as it is.

From the power-policy point of view the US is still dominating; in terms of influence („balance of influence“) China has gained upper-hand.

Russia supported China in the Taiwan and the Tibet issue. Human rights violations are not put on the agenda by Moscow. China supports Russia as key player and lead state in Central Asia and the CIS. Central Asia has received utmost importance for both states. Separatism and fundamentalism are issues of concern for both.

The message is clear:

Both are in a position to control the energy resources of importance for the US and the EU. China has got direct access to oil. This was a precondition to nurture the fast growing Chinese economy. Russia has gained a secured source of income. This was a perfect deal for both.

China and Russia have a common target: To get out of the position of an underdog vis à vis the US. For reason the strategic targets are at hand: Build-up of maritime capabilities to dominate the western Pacific, to break the hegemonic position of the US-Pacific Fleet and to secure new lines of communication with the „third island chain“.

Both do not view each other as military enemy. Cooperation proved to be the far better alternative. The Russian-Chinese Missile Defense System is a very good example of this strategy.

Sino-Indian Relations

Perhaps one of the most important, yet least recognized, international events of 2003 were Indian Prime Minister Atal Bihari Vajpayee’s state visit to China in June. As the capstone of a decade-long rapprochement, which was briefly interrupted by the political fallout in the aftermath of India’s nuclear tests in 1998, the visit symbolized one of the most critical developments in Asian affairs. At their meeting Prime Minister Vajpayee and Chinese Premier Wen signed the Declaration on Cooperation and nine protocols on bilateral cooperation, thus fully normalizing Sino-Indian relations.

Both leaders pledged that their countries would work together for regional peace and stability. Progress was also made on their long-standing boundary dispute; the two countries codified the Agreement on the Actual Line of Control and pledged to exchange high-level emissaries to negotiate a final settlement of their thirty-four-year quarrel over the disputed territorial boundary. Once the 4,500-kilometer border is fully demarcated, China will have resolved all of its border disputes.

As part of the agreement, India reiterated its recognition of Tibet as part of China and promised not to support separatist activities by Tibetan exiles in India.

China-India trade, which stood at $7.6 billion in 2003, is expected to accelerate (between 2002 and 2003 bilateral trade jumped 53.6 percent). The two countries enjoy complementarities in several sectors, including computer software (India) and hardware (China), although they continue to compete in other areas such as textiles and low-end manufactures. The Sino-Indian summit represented the most recent success in efforts by China to turn one-time adversaries into productive partners.

Taken together with China’s ongoing efforts to forge a strategic partnership with Russia and to increase bilateral cooperation overall, Beijing’s success in building ties with its former adversaries (including South Korea, Vietnam, and India) has not only benefited the countries concerned, but has also removed key sources of tension from the Asian region.

India’s Foreign and Security Policy has been demarcated by the following pillars: Positive and fruitful relations with the US

(1) Improved relations with China

(2) Balanced relations with Russia

(3) Improved relations with Pakistan

The key question is, whether China feels superior to India and therefore does not recognize India’s role within the South Asian region. Additionally, it remains open, whether Pakistan will serve as a containment element vis a vis India.

Certainly, China has treated India more respectfully in the past 5 years than it did during the 1990s. Certainly, there is a lot of room for improvement and detention. (e.g. a possible threat in the maritime context through intrusion of the intended Chinese trading fleet into the India Ocean)

Despite those facts – relations have improved considerably- particularly after ‘9/11’ which had a catalyst effect. Much has been ameliorated; some important things are still in the holding-line and waiting to be tackled. Future looms promising which is very important for the regional stability. Certainly, well-functioning bilateral relations pose some danger for the other players – but they will have to cope with them.

Conclusions: What about EU?

In Asia a multi-textured and multilayered regional system is emerging that shares four essential elements: the U.S.-led alliance system, an institutionalized normative community, unprecedented U.S.-China cooperation, and complex regional interdependence.

All Asian nations and other players such as the United States or the EU must adjust to the many new realities presented by China’s regional ascent. China need not be feared or opposed, although some states may hedge against the potential for Chinese dominance. China’s interests and regional preferences may well coincide with those of its neighbors and other players, providing opportunities for collaboration.

The tendency of some Asian states to bandwagon with Beijing is likely to become more manifest over time. Integrating China into the regional order has been a longtime goal of ASEAN, Japan, and the United States.

If U.S. influence relatively declines in Asia while China’s rises relatively in regional problem solving, it will more reflect Washington’s aloofness than Beijing’s assertiveness. This issue has to be combined with the uncertainty in Russia’s and India’s role. Additionally, Russia-India relations, India-US relations, India-EU relations and EU-Russia relations need to be taken into account.

This requires adequate approaches, particularly for Europe which is not enough taking care of the region. A particular EU-To Do agenda reads as follows:

  • The complexity those relations may take or even have already taken need to be analyzed.

  • Discussion must go beyond intellectual and academic circles.

  • EU has become a key market for China, but is still lagging behind vice versa.

  • EU is to close the gap between the region and its own area with a clear structural target.

  • The region should not be feared or opposed, but relations should be built up in a far more structured way and on a regular basis with a substantive background.

  • Since China has a strategy towards EU, Europe should quickly design a strategy towards China, but also towards India.

  • Both players show a high market potential. They could become “European security stakes”.