Strategic trends on the Korean peninsula have generally been favorable to us. While Kim Jong Il has foolishly raised tensions and rejected our proposals for Dengist economic reforms, our ability to shape the post-Kim leadership transition in the North grows stronger. Ten years ago we provided 50% of North Korea’s food and fuel; today the numbers are closer to 80%. South Korean economic dependence on China has also grown and President Roh Moo-hyun weakened U.S.-Korea-Japan ties in recognition of this (though he did reject our proposal for a China-DPRK-ROK trilateral forum to replace the U.S.-Japan-ROK Trilateral Coordination and Oversight Group, or TCOG). Recently, however, we may be seeing some reversal of these positive trends. After the North Korean sinking of the South Korean corvette (an assessment we share with the United States and ROK but cannot make public), the rightist elements within South Korea and the Obama administration began a campaign against North Korea at sea in waters critical to China’s strategic interests. Premier Wen reported from his trilateral summit with President Lee Myung-bak of Korea and Naoto Kan of Japan in June that the Japanese and Koreans appeared closely aligned on the issue and that China was becoming isolated. We must counter these setbacks by encouraging a return to the Six Party Talks and a quick end to pressure tactics, by urging North Korea to cease provocative actions, and by protesting through media outlets and friends of China in Washington against any effort to turn this anti-North Korea campaign into a China containment strategy.

In terms of other external alignments, there are signs that Washington has been moving closer to Europe under Merkel and Sarkozy based on a shared “China threat” assessment. However, recent economic and political developments have rendered the EU an inward-looking and internally divided actor in the new multipolar diplomacy. We can no longer count on Europe to be a counterbalance against American unipolarity as we could in the days of Chirac and Schroeder, but neither should we worry that Europe will coalesce behind any strategy to contain China.

ASEAN is also an inward looking and divided actor with even less cohesion than the EU. We have enormous influence in Southeast Asia because of economic interdependence, free trade agreements, and the ability to shape ASEAN deliberations through Cambodia, Laos and sometimes the Philippines. Singapore has been playing a double game, telling us that they wish to see more Chinese economic leadership in the region while urging the Americans to increase their diplomatic and military presence. We have little choice but to tolerate the public musings of the Mentor Minister in Singapore. Indonesia is returning as a major factor in ASEAN politics, divided between its Islamic, democratic and developing nation status. We must emphasize common cause with Indonesia based on the last of these, in the spirit of the Bandung conference. Malaysia under Najib could become a problem for us, and the Prime Minister’s embrace of Washington must be monitored carefully. Vietnam remains an insolent southern neighbor and is attempting now to draw the United States in to strengthen its illegitimate claim to the South China Sea. However, elements within the leadership troika in Hanoi may become more sympathetic to their common ideological interests with China after the leadership change in Vietnam’s January Party Congress. We will fully utilize party-to-party ties to achieve a positive outcome in bilateral relations with Vietnam. Overall, we will continue to leverage specific bilateral relationships and reject efforts by ASEAN to negotiate anything other than economic agreements as a single entity.

India has become a larger factor in China’s foreign policy strategy. We assess that the U.S.-India alignment started under Bush is irreversible, though we take some comfort from the Obama administration’s dilution of the strategic rationale for U.S.-India relations. The November U.S.-China joint statement was a particularly useful signal to India that Washington looks to Beijing first and Delhi second in global politics. Nevertheless, the United States now exercises more with India than any other bilateral partner, including NATO countries, Japan and Australia, and Japan and Australia have both signed a series of cooperative agreements with the Indian Navy. Indian propaganda about the “China threat” to Aksai Chin, Arunachal Pradesh and the “string of pearls” from Burma to Sri Lanka and Gwadar in Pakistan must be countered. Fortunately, India is more concerned about economic development than strategic issues and it will be possible to affect Indian policy through trade and peaceful development. We will also build on the “Spirit of Copenhagen” to obstruct Indian alignment with the United States and Japan and to form counter-coalitions among developing countries. Indian leaders have been trumpeting the supposed advantages of the “world’s largest democracy,” but democracy is an obstacle to Indian development compared with our more successful model of socialism with Chinese characteristics. Indian efforts to counterbalance us in Myanmar must be watched, but we are in a stronger position in that country overall and can gain some advantage if Indian engagement complicates American efforts to form a united democratic front against the SPDC. We also have one enormous advantage over India. Other than the Tibetan plateau, India is removed from our critical centers of strategic gravity. However, we can easily exploit Indian vulnerability in South Asia through our relationship with Pakistan (where we will transfer nuclear power technology and build railroads and ports) and through our new relationships with Sri Lanka and the Maldives. This will allow us to keep India off-guard if Delhi’s strategies become too ambitious in East Asia. Ultimately, however, much will depend on the pace of Indian alignment with the United States, Japan and the other maritime powers in Asia.

In Conclusion: The Three Must Avoids

In short, our strategy of pursuing peaceful development and harmonious society in Asia has yielded enormous advantage. Our influence has grown without dangerous entanglements that might complicate economic growth. We have defeated peaceful evolution strategies aimed at weakening the Chinese Communist Party. We have contained if not reversed splittism in Xinjiang, Tibet and Taiwan. We have continued building a multipolar world. And we have done this without direct confrontation with the United States.

At the same time, our internal and external challenges remain considerable. It is critical that we remain vigilant about the Three Must Avoids: ONE, we must avoid containment or counterbalancing strategies among democratic states on our periphery; TWO, we must avoid colored revolutions in North Korea or Myanmar and the replacement of the current regimes with pro-U.S. democracies on our borders. THREE, we must avoid conflict with the United States. Our judgment is that the United States also seeks to avoid conflict with China. We seek to strengthen our influence in the international system to defend our interests and our polity. The United States seeks to utilize our engagement with the system to change our polity through peaceful evolution. The test of each of our strategies will be in our ability to limit and shape the choices of the other while building on increasing mutual dependence. We will have to think about our leverage and influence in broader and more comprehensive terms, encompassing all the tools of national power: diplomatic, military, ideological and economic. We can expect the United States to do the same.