For the past decade, reaping the benefits of the dynamic Chineseeconomy has dominated Asia's China strategies. This is hardlysurprising. While China's real GDP in 2004 was well below the GDPsof the United States and Japan, if one uses purchasing power parityfigures, China became the world's second-largest economy with a$6.4 trillion GDP in 2003, according to recent data published bythe World Bank. Of course, China still confronts a litany ofeconomic problems such as endemic corruption, mismanagement ofstate-run firms and banks, widening underemployment and theprospect of colossal environmental disasters. But this has notprevented Japan and South Korea from becoming China's first- andfourth-largest export markets and its first- and fourth-largestimporting partners. Meanwhile, since 1999, trade with thePhilippines has grown by 565 percent, with Malaysia by 258 percentand with Vietnam by 281 percent.

Yet the more ominous face of China cannot be ignored. Beijingcontinues to downplay its increasingly sophisticated forcestructure and insists that its defense budget of $30 billion palesin comparison to the Pentagon's $420 billion budget. But externalestimates, including U.S. intelligence assessments, place China'sactual defense budget in the range of $50 billion to $80 billion.Over the past decade, China's official defense budget has increasedat an average of around 11 percent per year. The People'sLiberation Army's (PLA) emphasis on key force modernizations,including more robust submarine forces, a new generation of fighteraircraft and an array of asymmetrical capabilities, means that overthe next two to three decades it will come close to becoming aso-called "theater peer" of the United States.

In turn, for the past decade, the United States has attempted tore-engineer its key alliances in the Pacific. While the revampingof "America's Asian Alliances" began in the mid-1990s, an importantshift is now occurring: Washington is trying to push Japan,Australia, South Korea and various ASEAN states to consider"unnamed over-the-horizon" threats, clearly implying China.

Given the dramatic growth of the Chinese economy since the late1980s and the continuing surge in northeast Asian and SoutheastAsian trade with China, it is not surprising that most of China'sneighbors have concentrated their attention on managing theircommercial ties with China. How a rising China might affect theirgeopolitical and strategic position has received much lessattention, however. Crafting policies that are essentially devoidof effective responses to China's geopolitical ambitions or arevariations of "pre-emptive accommodation" will have serious andpotentially negative consequences for Asian security and stability.The full spectrum of China's strategic capabilities and intentionsmust be taken into account to ensure more realistic and effectivepolicies toward China.

The leading Asian states find themselves in three strategicquandaries produced by the rise of China. First, Asia's relativestrategic weight in the global balance of power is once againbecoming equated with that of China's own strategic disposition.While China's longer-term ascendance as the next superpower isreplete with significant hurdles, so long as Asia's future pathsdepend increasingly on China's own trajectory, the blurring of"Asia" and China will accelerate, which in turn is going to poseprogressively higher-threshold dilemmas for Asia and theinternational system.

Second, rarely (if ever) has the rise of a great power posedsuch promises and hazards at the same time. The continuing rush tojoin the Chinese economic bandwagon means that most of China'smajor trading partners have tended to downplay sensitive politicaland military issues. While understandable in the context ofsubstantial economic incentives, it vitiates efforts tocounter-balance China's strategic ambitions.

Finally, the forging of viable coalitions to deny, delimit oreven contain China's power projection capabilities and potentiallyirredentist strategies has so far proven illusory. While pressurescan be mounted on China from various corners, no Asian countrytoday or in the foreseeable future is likely to contest Chinadirectly at the cost of trade ties. As China moves in earnest tobuild a blue-water navy, only two other regional navies--India'sand Japan's--would have the wherewithal to constrain China'smaritime forays. None of the Asian powers, with the notableexception of India, has indigenous nuclear forces to matchChina's--and whatever nuclear capacity India bears will beconstrained by its primary emphasis on deterring Pakistan.

Proponents of active engagement often point out the absence ofviable alternatives when dealing with China. Moreover, theymaintain that once the People's Republic becomes "a large Taiwan"(that is, when China becomes a full-fledged market economy andpolitical democracy), Beijing will be highly unlikely to contestthe status quo. But it is not clear whether a fully democratizedChina will necessarily become less nationalistic and shedpotentially aggressive geopolitical aspirations. To the extent thatChinese elites feel that the weakened China of the past 300 yearsis an aberration when seen from the perspective of the past 3,000years, China's Asian neighbors can ill afford to ignore China's21st-century strategic ambitions. Much depends on whether Chinapursues less threatening and more pragmatic policies. For instance,in Southeast Asia even long-time adversaries such as Vietnam andIndonesia have shifted their policies to accentuate economiclinkages--but patently aggressive Chinese moves in the South ChinaSea could shift Hanoi's and Jakarta's strategies. Nevertheless, itis clear that China is set to expand its influence in and aroundits own near abroad.

The major Asian states, therefore, have seemingly contradictorygoals in their policies toward China. They want to exploit thebenefits flowing from China's rapid economic expansion whileensuring that China's increasingly robust diplomatic and militaryforays are kept in check or even denied on a case-by-case basis.This dilemma is perhaps most evident in the context of U.S.strategy toward China. Some of America's allies seem to have chosenaccommodation, while Japan and India appear to be pursuing a policythat might be labeled "stealth constrainment", rather than overtlyattempting to contain China's enlarged strategic footprints.

But as China becomes more powerful with matching influence overevery major sector--from energy excavation to selective seacontrol--the U.S.-led security template, in addition to the Chinastrategies of key actors in the region, cannot but change. Seenfrom this perspective, four key actors bear closer observation:Japan, South Korea, India and Indonesia.

The View from Tokyo

For Japan, the primacy of its alliance with America continues todefine its overall foreign and national security postures,including Tokyo's broader ties with China. Specifically, Japaneseelites believe that, notwithstanding the growing importance ofChina as a key trading partner and Japan's single-most importantmarket in Asia, other core security interests necessitate a robustalliance with the United States.

In virtually all major security issues after 9/11, Tokyo hassided decisively with the United States. While this particularfacet of Japanese foreign policy is downplayed for obvious reasons,there is little doubt that the Japanese security community sees noviable alternative to the U.S.-Japanese alliance. So far, Japan haschosen not to overemphasize the China threat, although those whostress this factor have increased steadily. At any rate, an overttilt toward China is unthinkable.

The overwhelming importance that is attached to theU.S.-Japanese alliance has resulted in growing criticism in Japan,particularly in the aftermath of the significant erosion inSino-Japanese and Korean-Japanese relations. Key commentators andforeign policy experts continue to question the viability of PrimeMinister Junichiro Koizumi's seeming emulation of Tony Blair asWashington's "indispensable ally" in East Asia. That said, a broadconsensus exists in Japan that doesn't question the fundamentaltenets of the U.S.-Japanese alliance. Indeed, it remains highlydoubtful that, even if the opposition Democratic Party (Minshuto)were to gain power, there would be any significant change in theU.S.-Japanese relationship.

Despite the public's growing unease over Koizumi's handling ofSino-
Japanese relations (a recent poll by the Asahi Shimbun noted that48 percent of the respondents believed that Koizumi was mishandlingSino-Japanese relations), most Japanese also feel that Chinacontinues to exploit historical issues to strengthen nationalism ata time when the Chinese Communist Party is coming under increasingchallenge at home. While most Japanese believe that any long-termerosion in Sino-Japanese relations should be avoided, they alsobelieve that Japan should not buckle under Chinese nationalism or,more importantly, downgrade Japan's relationship with the UnitedStates.

Since the end of the Cold War, Japan's core security choiceshave continued to irritate Beijing. Japan's decision to join inpreliminary Theater Missile Defense (TMD) studies, itsparticipation (although limited) in the Proliferation SecurityInitiative (PSI) and its on-going efforts to stem North Korea'sillicit hard currency earnings are but some of the core examples ofclose U.S.-Japanese collaboration. In the post-9/11 era, theSelf-Defense Agency has adopted a range of policies designed tomeet "unpredictable threats" such as terrorism and ballisticmissile attacks. In 2005 the National Defense Program Outline brokeprecedent by identifying both China and North Korea as key securityconcerns. While these steps have been welcomed by Washington,Beijing has continued to air its discontent over the"normalization" of Japan's security postures.

Japanese officials and experts agree that the rise of China isnot containable and that over time Beijing's economic status willvery likely eclipse Japan's. In this context, Japanese policymakershave emphasized the need to strengthen bilateral trade ties withBeijing through a free trade agreement, although Tokyo remains waryof China's longer-term role as a core pillar of an emerging "EastAsian community."

As a long-term policy objective, Japanese officials believe thatthe least costly way of moderating China's external behavior is toincrease the web of economic linkages with China so that China'sgrowing economic interdependence with the global economy (and byextension, Japan's) results in more pragmatic Chinese policies. Butas preventative measures, Tokyo has begun to emphasize theimportance of expanding Japanese-Indian economic and securitycooperation on a case-by-case basis and also to revamp itsSoutheast Asia policy so that growing Chinese influence inSoutheast and South Asia does not adversely affect Japan's keyinterests.

Last but not least, Japanese policy toward the Korean Peninsularemains a critical facet of Tokyo's balancing posture vis-Ã -visBeijing, in that the maintenance of a robust Washington-Tokyo-Seoulstrategic triangle serves not only to coordinate policies towardNorth Korea but also as a counterweight to China's increasinglydominant posture in northeast Asia.

The View from Seoul

In the aftermath of the Kim Dae-jung government (1998â€"2003)and continuing well into President Roh Moo-hyun's tenure, Seoul'spolicies toward Beijing have shifted from a relationship dominatedby economics to a more comprehensive relationship. While Seoul hastaken care to emphasize that it continues to view as fundamentalits alliance with the United States--most recently reaffirmedthrough the June 10 summit in Washington--Seoul's posture towardPyongyang has increasingly coincided with Beijing's views ratherthan Washington's. In part, such a transformation illustratesSeoul's increasing desire to shape its own "boutique" foreign andnational security policy by balancing its decades-old alliance withthe United States with new linkages with China.

The prevailing perception in South Korea that China is the onlygreat power that exerts real influence over North Korea (in thecontext of facilitating the Six-Party Talks and Beijing's leveragein terms of providing fuel and food to Pyongyang) has upgradedChina's net strategic value. Thus, Seoul has painstakingly avoidedpolicies that could upset China; this helps to explain why Seouldecided not to participate in a TMD study in 1998 and subsequentlydeclined to join the PSI.

After Pyongyang announced on February 10 that it had nuclearweapons, and more recently when U.S. intelligence reports seemed toindicate that Pyongyang might take steps to conduct an undergroundnuclear test, Seoul's response was notably measured. When U.S.officials hinted that consequences would be faced by Pyongyang ifit crossed the test threshold, South Korean officials insisted thatovert pressures toward Pyongyang would probably backfire and thatthe best recourse to resolve the nuclear issue was through patientdiplomacy and enhanced inter-Korean economic linkages. To Seoul'srelief, Beijing has also rejected even limited sanctions againstPyongyang.

Ever since the June 2000 inter-Korean summit between KimDae-jung and Kim Jong-il, South Korea has chosen to consistentlydownplay North Korea's military intentions and capabilities. Whilethe Ministry of National Defense continues to point out the dangersposed by North Korea's WMD programs, it has been loath to highlightNorth Korea's military threat. More importantly, it has alsorefused to jointly plan with its U.S. ally for contingencies in theNorth. This, in turn, connects to a growing ambivalence about thefuture of the U.S.-Korean alliance. While the anti-Americansentiments that reached a crescendo in 2002 and 2003 coincidentwith the election of Roh Moo-hyun have since subsided, divergencesof perceptions and policies with the United States have alsocontributed to an increase in Seoul's convergence with Beijing. Onvirtually every aspect of North Korean policy, such as Pyongyang'snuclear ambitions, human rights abuses, and the delinking ofeconomic and political issues, Seoul is closer to Beijing thanWashington.

Moreover, whereas U.S. policy toward North Korea (as well asoverall U.S. foreign and security policy, for that matter)continues to receive close scrutiny in South Korea, Chinese foreignpolicy receives only limited examination. While trade andhistorical disputes have arisen in the past, the South Koreangovernment has been extremely accepting of China's externalpostures. South Korean suspicions of a more robust Japanesesecurity strategy, coupled with the desire not to upsetinter-Korean rapprochement, have, for the time being, stymiedtrilateral security coordination--a major strategic dividend forNorth Korea and China. And many South Koreans believe that China'srole in the road toward reunification is going to becomeprogressively important and that at any rate, China is morefavorably inclined to a unified Korea than Japan or even the UnitedStates.

This is not to suggest that South Korea will permanently sidewith Beijing, though convergence will persist in the short term: Aslong as South Korea adheres to accelerated engagement with theNorth, even at the expense of its alliance with the United Statesor crucial ties with Japan, Seoul's overtures to Beijing willcontinue. Over the long run, however, Seoul's tilt could result insharp reversals, not only in the context of sustaining its alliancewith the United States but equally, if not more so, in misreadingChinese intensions on the Korean Peninsula. As Beijing exploits itsrole as the primary manager of the North Korean problem, a NorthKorea that espouses nuclear ambiguity and depends heavily on Chinafor oil and food supplies (while constraining U.S. and Japanesemaneuverability in northeast Asia), provides China with a key forcemultiplier. Thus, the longer-term viability of South Korea'sbalancing act is likely to face a critical litmus test onceinternal dynamics begin to worsen in North Korea and China beginsto assert actively its "geopolitical share" in a revampedKorea.

The View from New Delhi

Sino-Indian relations have to be seen in the context of threemajor developments in the post-Cold War era: the exploiting of neweconomic relationships flowing from India's growing economicattractiveness, India's expanded maneuverability based on a greaterarray of "strategic partners" than at any other time sinceindependence, and India's ambitions to become the undisputedsub-regional hegemon. In short, India's China strategy seeks toinstitutionalize a quid pro quo whereby both sides accept and, tothe extent possible, accommodate each other's rise.

Such a step entails the need to ensure that India does notspearhead direct or even indirect efforts to encircle China. As theonly Asian nuclear power whose economic potential could approximateChina's in the long run, China probably has the most to fear fromIndia's ascendance, particularly if India continues to upgrade itsstrategic cooperation with the United States. While New Delhiremains cautious about overemphasizing the U.S.-Indian card, it hasalready accrued key dividends by marginalizing whatever gainsPakistan has made through its role as a key front-line state in thewar against terrorism. And for every gain that strengthens India'sstrategic gravitas, it is Pakistan's relative loss, and byextension, China's.

For the time being, Indian leaders seem content with enhancingbilateral trade ties with China (which reached $14 billion in 2004)through negotiations to conclude a free trade agreement and avoidhostile energy competition. But notwithstanding the benefits of acloser Sino-Indian trade relationship, strategic calculationspermeate India's policies toward China.

Foremost in the Indian strategic mindset is curtailing ordenying China's attempts to broaden its strategic footprintstretching from southern China through Burma and Pakistan and allthe way to the Persian Gulf. India is carefully watching China'smilitary cooperation with Burma and Beijing's support for theconstruction of a new naval base in the Pakistani port of Gwadar,as well as Chinese activities in Bangladesh, Cambodia andIndonesia.

As China's oil imports from the Middle East continue toincrease, so too will Chinese maritime traffic and with it Chinesenaval assets to protect key sea lanes. If China ultimately succeedsin servicing and, more importantly, stationing naval vessels inPakistani, Burmese and other ports, India's ability to retain seacontrol will be contested.

In order to pre-empt such developments or to retain the capacityfor more active sea-control missions, India has decided to buildtwo indigenous aircraft carriers by 2011, and possibly another,depending on budgetary allocations. These and other moves by Indiaattest to New Delhi's growing power-projection capabilities in theIndian Ocean. Whether such new-found strategic leverage willultimately be used to counter-balance China remains uncertain,although for now the theory is that a nuclear-armed, militarilyrobust and economically resurgent India is one of the leastcomplicated ways to effectively counter-balance Chinese expansionin Southeast Asia and the Indian Ocean.

The View from Jakarta

If India's China policy is driven by the twin exigencies ofeconomic interests and counter-balancing Chinese forays, so too areIndonesia's, but with a more nuanced twist. From Jakarta'sperspective, there are key gains from expanding the relationshipwith China, but it must tread carefully, given the need to satisfydomestic political forces and its aspirations to assume greaterstrategic leverage in Southeast Asia without endangering its keyrole in ASEAN.

Although Indonesia has not undertaken a fundamentalreorientation of its foreign and national security postures bystrengthening its relationship with China at the expense of otherties, such as with Australia, it has taken steps to significantlyupgrade its China card. In April, President Susilo BambangYudhoyono and President Hu Jintao signed an agreement to form a"strategic partnership." The step was not an insignificant one,considering that official ties were only restored in 1990.

For the time being, Indonesia seems to be content withmaximizing economic linkages with China that are drivenincreasingly by China's voracious energy demands and Indonesia'sabundant natural resources, such as natural gas and timber. In2004, bilateral trade reached $14 billion, and both sides plan toincrease that by up to $20 billion within the next three years.China has provided low interest loans, relief for the tsunamidisaster and joint energy exploration schemes.

Jakarta also seems willing to exploit more limited payoffs suchas "softly" counter-balancing U.S. and Australian influences in theregion, although it has assiduously pursued the re-establishment ofmilitary-to-military contacts with the United States in addition toexploiting the benefits flowing from selective defense cooperationwith Australia.

Beginning with former President Abdurrahman Wahid and continuingon to his successors, Jakarta for the most part has welcomedBeijing's sustained courtship. For China, the re-establishment ofrelations with Indonesia marks a milestone in its "Look South"policy, given that all Southeast Asian states today recognize the"one-China" policy. (Not insignificantly, when China passed theanti-secessionist law by the National People's Congress last March,Jakarta responded by reaffirming its one-China policy and decliningto comment on the legislation.) For its part, while Singaporecontinues to maintain robust unofficial ties with Taiwan, includingpartial training of Singapore's armed forces in Taiwan, Singaporehas also signaled its intention to gradually reduce its militaryrelationship with Taiwan.

Indonesia's rise as the dominant power in Southeast Asia,coupled with its status as the world's largest Muslim nation, hasspurred China to cultivate expanded economic and political tieswith Indonesia. From Beijing's perspective, closer Sino-Indonesianstrategic collaboration could serve to complicate U.S. efforts toentice Indonesia into broader security cooperation with the UnitedStates while also exploiting sporadic cleavages between Australiaand Indonesia. But so long as the armed forces continue to play animportant role in the formulation of Indonesia's security policy,Jakarta is likely to maintain its apprehensively beneficialengagement strategy for the time being.

Lessons for the Future

Although it is difficult to characterize intrinsically "Asian"perspectives of China, the most significant common denominator isthe growing acceptance of Chinese influences in the region,followed by an absence of any explicit enunciation of aChina-centric containment doctrine. Even those powers that harbormore suspicions about China's longer-term strategic ambitions, suchas India, Japan, Vietnam and Indonesia, have chosen not toarticulate expressly the "China threat" factor insofar as theirdefense strategies are concerned.

This is not to suggest that regional states have turned a blindeye to China's military modernization programs, its growingpresence in the South China Sea, its potential breakout into theIndian Ocean and its policies to further marginalize Taiwan.Moreover, in the event of aggressive moves by China--such asmilitary operations against Taiwan, de facto occupations of theParacel and Spratly islands, stationing of naval combatants andsubmarines in Pakistan, Burma or other ports in Asia, and aconcerted effort to expand its ballistic missile and nucleararsenals--some Asian states could refocus more forcefully theirmilitary capabilities vis-Ã -vis China.

Of course, given the magnitude of China's domestic challengesand the critical role of the United States as the outside balancer,linear projections may turn out to be highly inaccurate. But ifChina's neighbors continue to brush aside, sidestep or even denythe existence of enlarging Chinese footprints through "tacticalaccommodations", the longer-term cost will appear in the form ofnarrowing security options and the real possibility of asignificantly retrenched U.S. presence in the region. The messageto the world is clear: While Europe's core security dilemmas areover, Asia's are just beginning.