Domestic actors and agendas in Chinese aid policy

Abstract

As China's aid has increased, so has scrutiny by the international development and foreign policy community. Despite recognition that foreign aid policy is a result of domestic political contests, the existing literature tends to overlook Chinese debates about the purpose of aid, and how that purpose should be achieved. This paper argues that examining these debates shows that Chinese aid is not a well-considered element of an overarching strategy. Rather, where foreign aid is considered relevant vis-à-vis China's goals, its use is hotly contested. Competing actors' varying agendas, rather than any coherent strategy, underpin inchoate aid projects.     

‘The rock that can't be moved’: China's revised geostrategies in Myanmar

ABSTRACT

Since 2011, Myanmar has undertaken a series of domestic and foreign policy reforms, including democratisation and peacebuilding, before and after the watershed November 2015 elections in the country. These reform processes have called into question whether China, which has been Myanmar's dominant great power neighbour throughout the previous era of military government in the country formerly known as Burma, would find its strategic position eroding as Myanmar further opens to the international community. However, the concept of China ‘losing’ diplomatic ground to other actors, including the West, in Myanmar implies a zero-sum game that does not adequately address Beijing's still-formidable geostrategic presence vis-à-vis its southern neighbour. China has now started to implement a more multi-faceted, ‘resilience network’-building approach to maintaining its special status in Myanmar's foreign policy, a situation which will persist as Myanmar continues its uncertain path towards further reform.     

Neoconservatism,US–China conflict,and Australia's ‘great and powerful friends’ dilemma

Abstract

Following its time-honoured ‘great and powerful friends’ foreign policy tradition, Australia has been cultivating close ties simultaneously with the United States and China. Yet, as a rivalry between the two powers apparently looms large, Australia faces an acute dilemma. While the rise of China and the question of Taiwan are often cited as main causes of US–China discord, this article argues that the American neoconservative policy on China, underpinned by a belief in both military strength and moral clarity, is integral to this growing competition and is, by extension, partly responsible for the emergence of Australia's predicament. To avoid such a difficult choice, the article suggests that Australia should strive to curb the policy influence of neoconservatism both in the United States and at home by pursuing a more independent foreign policy, making clear its strategic postures on US–China relations, and helping establish a trilateral strategic forum between Australia, the United States, and China.     

China's dualist model on technological catching up: a comparative perspective

Abstract

The central question of this paper is whether China can go beyond simple technological transfer and toward innovation in this age of globalization. By adopting an institutionalist perspective, this paper argues that China has developed a dualist model during its economic transitional period in which the foreign sector has been isolated from domestic firms, while the domestic industrial sectors have also failed to develop organic linkages among themselves to facilitate technological learning and generate innovation. This paper discusses four major institutional arrangements that deeply influence China's technological development – the institutional logic of economic reform, the state's industrial policy, the financial system and the industrial structure. It suggests that, owing to these institutional elements, China has neither developed economies of scale, as compared with the South Korean case, nor has it built up a network-type of economy similar to its Taiwanese counterpart in order to generate the mechanisms needed for technological innovation.     

Indonesia and bilateral trade agreements (BTAs)

Abstract

This paper analyses the perspectives of Indonesian state and non-state actors towards their country's increasing tendency to use bilateral trade agreements (BTAs) as part of its foreign economic policy. Unlike the other original members of the Association of Southeast Asian Nations (ASEAN), the Indonesian government has been rather slow in pursuing a BTA policy with non-ASEAN member countries. Nevertheless, due to the proliferation of BTAs in other ASEAN countries' foreign economic policies, it was inevitable that Indonesia would pursue similar agreements with its non-ASEAN major trading partners. Despite this, it remains questionable whether Indonesia's participation in such trade agreements will produce such positive results for Indonesian economy. The attitude of the majority of Indonesian domestic constituents to date remains sceptical to this type of agreement. This is not only because BTAs create specific obligations on a range of issues, from trade and investment regimes, this trade strategy also involves deeper and more comprehensive commitments that those agreed at the multilateral level.     

Consuming Part-time Nationalism: China as an Immigrant in the Global Society

If Chinese foreign policy is to continue enjoying legitimacy, one must not allow globalization to overwhelm, penetrate, or obscure the boundary of the Chinese state. However, if the contemporary goal of Chinese foreign policy is to globalize, the process of integrating unavoidably questions the very foundation of Chinese foreign policy. By reinterpreting and psychologizing China's foreign policy, this paper tackles the discursive strategy, pertaining to nationalism, to make China's entry into globalization emotionally more manageable and less felt as a loss of identity. While there is worry that Chinese nationalism, if mismanaged, may lead to confrontation with the United States, nationalism today is no longer the same nationalism as before. Most importantly, the commercialization of nationalism and the bifurcation of its meanings have granted some agency to individual Chinese to interpret and practice nationalism as each sees proper. This citizen agency exists in various forms with those in the countryside ready to answer the call by the government and those in the cities acting more spontaneously. These individuals can together, without them necessarily planning collectively, bring out interpretations and practices that are difficult to anticipate beforehand.     

Iran's active neutrality during the Kuwaiti crisis: Reasons and ramifications

Abstract

Since the death of Ayatollah Khomeini in 1989, Iranian foreign policy has become increasingly moderate. Iran's active neutrality during the Iraqi occupation of Kuwait is symptomatic of this moderation. The policy of active neutrality became possible because Rafsanjani centralized the foreign policy decision‐making process before the start of the crisis and introduced his “new‐thinking” in the Persian Gulf. This new thinking was a part of his strategy to rebuild Iran's shattered economy and to improve relations with the West and with the Arabs of the Persian Gulf.

Without a single shot and without any casualty, Iran benefited enormously from the Kuwaiti war. Rafsanjani's domestic opponents were weakened. Iranian financial gains were significant. Iran's negative image improved. Relations improved with the West and with the Arab nations of the region. And the military and economic infrastructures of Iraq, Iran's archenemy, were seriously damaged, making Iran the region's most powerful indigenous force.

This article is partially based on interviews with Iranian policy‐makers conducted in 1991.     

Examining the immanent dilemma of small states in the Asia-Pacific: the strategic triangle between New Zealand,the US and China

ABSTRACT

Small states throughout the Asia-Pacific are confronted by a growing dilemma over how to balance their traditional security ties with the US and rapidly growing trade with China. This gives Washington and Beijing potential leverage over small states to use within their competition with one another. This article explores the implications of this for New Zealand – a small South Pacific state that prides itself on maintaining an independent foreign policy. Situated within the small state literature, it utilises a material-based strategic triangle to illustrate the fundamental facets of New Zealand's position. Relatedly, the article examines how Wellington has managed its burgeoning relations with China and the US over the past decade and critically considers New Zealand's independent foreign policy. It finds that New Zealand has adopted a mixed set of strategies to manage its position between the US and China, closely aligning itself with Washington while remaining nonaligned on some key security issues in the Asia-Pacific region. New Zealand has certainly not opted for neutrality. The article concludes that New Zealand and other small states must remain vigilant, may want to consider alternative strategies of alignment, and outlines a number of areas where additional research could prove fruitful.     

China's ‘charm offensive’ in the Pacific and Australia's regional order

Abstract

In recent years, a perception has emerged among many policymakers and commentators that the deepening of the People's Republic of China engagement in the Pacific Islands Region, predominantly through its expanding foreign aid programme, threatens to undermine the existing regional order, in which Australia is dominant. In this article, it is argued that China's apparent ‘charm offensive’ in the Pacific is mainly driven by commercial, not political, imperatives and is far more fragmented and incoherent than is often assumed. Hence, its (real) political effects hinge, not on any Chinese strategic designs for regional domination, or even a more limited resource security agenda, but on the intent and capacity of Pacific governments to harness deepening aid, investment and trade relations with China towards their own foreign and domestic policy objectives, which include limiting Australian interference in the internal governance processes of Pacific states. This argument is demonstrated by the case of Fiji after the December 2006 military coup.     

Japan's foreign aid: old and new contests

Abstract

Domestic and international contests explain the transformation of Japan's foreign aid programme begun in the early 1950s. Through contests between domestic players, Japan has streamlined its aid processes by introducing institutional innovations, accommodating new actors in aid policy and delivery, and responding more sensitively to public opinion and independent advice. At the international level, contests have come from the Development Assistance Committee/Organization of Economic Cooperation and Development (DAC/OECD), the USA, and China. Through these contests, Japan has emerged as a more rounded aid donor. Its new aid model blends Western principles with concepts of ‘self-help’, favouring large infrastructure projects that serve both Japan's and recipient countries’ interests.     

A new dynamism in Sino-Japanese security relations: Japan's strategic use of foreign aid

Abstract

In November 2004 a Chinese nuclear submarine cruised into Japan's territorial waters near the Okinawa Islands. In response, the Japanese government dispatched several Japanese naval ships and planes to chase the Chinese submarine until it navigated into international waters. This event, which potentially could have become the first exchange of fire between Japan and China since the Second World War, illuminated increasingly problematic security relations between the two neighbouring countries in the twenty-first century. In fact, deterioration of Sino-Japanese security relations is not a recent phenomenon but has already been evident since the mid-1990s, when Japan imposed a series of economic sanctions on China. Between 1995 and 2000 Japan had suspended its foreign aid to China in protest against: China's nuclear weapons tests; China's large scale war game including the launch of missiles across the Taiwan Strait; and Chinese naval activities in disputed areas in the East China Sea. This article looks at Sino-Japanese security relations since the mid-1990s through three case studies of the aid sanctions imposed by Japan on China. It clarifies the domestic political and bureaucratic interests that motivated aid sanctions and determined the decision-making process leading to these sanctions. The article argues, that with certain politico-security interests, Japanese governments actively used foreign aid as a strategic instrument to counter provocative military actions by China in the East Asian region since the mid-1990s. Despite the limited influence that Japanese aid sanctions have actually had on Chinese military behaviour, Japan's strategic use of foreign aid has undeniably created a new dynamism in security relations between the two neighbouring great powers in Asia.     

The euro for China: too important to fail and too difficult to rescue

Abstract

The aim of this paper is to analyze China's strategy in relation to the euro. The first section summarizes China's active support to the single currency since its creation up to the first phase of the current Eurozone debt crisis. It shows how China has used a two-pronged approach. It has developed a public campaign in favor of the euro, especially when the market sentiment has been bearish on the single currency, and it has continued to be an active player in the European sovereign debt markets. The second part explains why China has been so supportive. Beijing wants to move away from dollar hegemony and thus it favors a tripolar monetary system based on the US dollar, the euro and the Chinese renminbi (RMB). With this aim, and despite the crisis, China has continued to diversify its foreign reserves into the euro making it by now ‘too important to fail’, not only because China holds roughly $1 trillion in euro-denominated assets, but also because for China the Eurozone is a crucial market and an important strategic counterweight to US dominance in world affairs. Finally, the third part focuses on how by the end of 2011 China switches to a more cautious approach due to the difficulty involved in rescuing the Eurozone. Domestic pressures, public outcry in Europe against being saved by China, the unwillingness of the European leaders to enter into strategic bargaining and Germany's strategy to use sovereign bond spreads as a market mechanism to create ‘more Europe’ have convinced policy-makers in Beijing to keep a lower profile while making sure the value of the euro remains stable.     

Rivalry in the Middle East? Japan’s CEAPAD initiative and China’s rise

Abstract

Ever since the so-called rise of China has started, Sino-Japanese relations have been increasingly described as a rivalry between both states. For the most part, this assumed rivalry has been analyzed on the global level or within the boundaries of the East Asian region, while the consequences of this rivalry for other world regions, such as the Middle East, have been largely neglected in the literature. In order to fill this gap, this article investigates how China’s growing presence in the Middle East, and in particular regarding the Israeli-Palestinian conflict, influences Japan’s own foreign policy in this troubled region. It utilizes a modified concept of the strategic rivalry approach, called ‘asymmetric rivalry’, which challenges the widespread notion that rivalry needs to be mutually perceived by both sides and thus analyzes the assumed Sino-Japanese rivalry in the Middle East from a Japanese perspective. By focusing on the case of Japan’s CEAPAD initiative, which aims at coordinating East Asian countries’ developmental assistance towards the Palestinian Authority while deliberately excluding China, the present article shows that the perception of Japan’s foreign policy elite of China as a rival decisively influences how Japan’s foreign policy is shaped in the context of the Israeli-Palestinian conflict.     

The rise of the Chinese ‘Other’ in Japan's construction of identity: Is China a focal point of Japanese nationalism?

Abstract

Since 1945, the United States (US) has served as a focal point of both Left-wing and Right-wing Japanese nationalism. Both sides argued that the US was an arrogant hegemon that unjustly robbed Japan of its autonomy, and prevented Japan from achieving its own ideal national identity. Both sides frequently demanded that Japan should be more ‘resolute’ and resist unfair demands emanating from the US. In recent years, however, both camps are increasingly using the same rhetoric to criticise the Japanese government's China policy. China is also being depicted as an overbearing state that unfairly browbeats Japan into making diplomatic concessions. Given the similarities between the portrayal of China and the US, has China now become a nationalist focal point for both the Japanese Left and Right? Utilising constructivist insights, this article seeks to shed light on this question, by examining how the Japanese Right and Left portray China, and explores the implications for Japan's China policy.     

China's defence industries

Abstract

The implementation of foreign direct investment (FDI) policies in China shows that domestic considerations were not the only factors shaping the course of China's opening up to the world economy. Foreign response was often taken into account as the Chinese government felt its way through the process of reform. Focusing on Japanese FDI in China, this article explores the liberalization of China's FDI regime and traces the impact of China's negotiations with and accommodation to pressure from foreign business and governments.     

Reappraising the debate and practice of US strategic ambiguity/clarity in cross-strait relations

Abstract

China's influence in the South Pacific appears to be growing rapidly. Some analysts are concerned that China is on its way to replacing the West as the dominant power and China's rise in the region poses a major threat to the West. However, there is no clear evidence to suggest that China's deepening involvement in the South Pacific is a calculated strategic move for its military security. The move can be strategic mainly in the sense that it has strong implications for China's reunification strategy and it serves China's long-term development strategy. The strategic value of the South Pacific to China's national security is limited at present and will remain so in the foreseeable future. China also lacks the military capability to challenge the US-led West in the region in the years to come. Chinese influence in the region is not deep-rooted and is largely based on its ‘no-strings-attached’ aid and its increasing economic interactions with the region. China has serious image problems in the region and these problems are unlikely to be resolved in the near future. China thus has neither the hard power nor the soft power to become a genuine hegemon in the region.     

Sudpolitik: the political economy of Taiwan's trade with Southeast Asia

Abstract

In December 1993 the Taiwan government adopted a policy called nanjin zhengce or sudpolitik, a policy aimed at diverting part of Taiwan's trade and investment flows from China to Southeast Asia. This paper addresses the following questions: what is sudpolitik? why adopt such a policy? what are the economic, political, and strategic considerations in the pursuit of this policy? which countries are its specific targets? how do the countries directly affected by this policy respond to it? The paper also discusses the issue of Taiwan's aid in connection with sudpolitik. While the effectiveness of the policy is far from clear at present, the paper concludes with four observations: Taiwan's trade and aid are beginning to intertwine; Taiwan's diplomacy is largely economically or commercially led; Taiwan has achieved some positive results in improving its relations with Southeast Asian countries; and, Taiwan has reached a new stage in its economic development whereby it needs to invest overseas in order to sustain its economic growth. Overall, sudpolitik represents a novel step in Taiwan's diplomatic practice.     

China's reform,internal trade and marketing

Abstract

This article analyses Macau's casinos as an example for accumulation by dispossession, in which they serve to transfer wealth from Mainland China to Macau and the casinos' foreign investors. They also represent a model for economic development and this model has migrated to Singapore, where it also operates as a form of accumulation by dispossession. By requiring citizens to pay an entrance fee, Singapore's casinos explicitly appropriate other people's money. The efficacy for the use of casinos as economic development is interrogated here because Macau's casino experience has emerged as a model for economic development in Asia beyond simply Singapore.     

How Bush bungled Asia: militarism,economic indifference and unilateralism have weakened the United States across Asia

Abstract

Criticism of the Bush administration's policies in East Asia is hardly common fare. Roseate colors certainly pervade the picture painted by defenders of Bush's policies toward Asia who argue that relations between the US and that region have never been better. This paper shows to the contrary that the Bush administration politicized wide swaths of public policy, including foreign relations, in an effort to create a permanent Republican electoral majority. That effort created a host of failures in America's Asian relations. The article focuses on three central problems: excessive militarization of American foreign policy; economic mismanagement; and a unilateralism that distanced the US from the rising Asian regionalism. The failures are not irreversible however and a change in administration has the potential to revitalize cross Pacific ties.     

China's dual strategy of coercion and inducement towards ASEAN

ABSTRACT

This article contributes to the discussion about China's divisive influence on the Association of Southeast Asian Nations (ASEAN). It argues that recent China–ASEAN relations are based on Beijing's successful implementation of a dual strategy of coercion and inducement. The effectiveness of this strategy is tested against the South China Sea disputes – the issue that lies in the core of regional security and a key platform of power display. The article outlines Beijing's recent interaction with individual ASEAN member-states and its implications for the regional multilateral diplomacy. While by no means identical, Beijing's dual strategy of coercion and inducement with individual ASEAN states have resulted in an effective abuse of the ASEAN consensus principle – a tactic often referred to as ‘divide and rule’. Consequently, the group's internal discord has further eroded and affected the institutional confidence of ASEAN. This article draws attention to the psychological effect of coercion as a perception of punishment, and inducement as a perception of reward.