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Get Off My Island! Conflicting Claims in the East China Sea

September 17, 2012 26 comments
Senkaku Islands

Senkaku Islands (Photo credit: Wikipedia)

History
Last fall, I blogged about China’s rise as it relates to its broad claims to islands in the South China Sea, also claimed by a number of South East Asian states. Since that post, China has become significantly more aggressive in both actions and words regarding these disputes. It is worth noting that the Obama administration has been fairly aggressive in its response, with Secretary Clinton particularly active in making clear U.S. interests in the region.

More recently, conflicting Chinese and Japanese claims to islands in the East China Sea, called Senkaku in Japan and Diaoyu in China, have heated up and made headlines. It is, therefore, worth analyzing why China would risk violent confrontation over eight uninhabited islands with a total square footage of less than five miles and whose Chinese name means “fishing islands.” What does international relations theory suggest as to why China would choose the present to begin more strongly pressing its claims?

As with all problems in international relations, history, domestic politics and relative power in the international system all play a role. The history that most strongly informs Sino-Japanese relations today is Japans’ making what had been the Chinese province of Taiwan a colony after winning the First Sino-Japanese War in 1895; losing one big island for more than a century makes a state a bit touchy about little ones. China’s tributary relationship with the Ryuku Kingdom, including today’s Okinawa, was also ended by the Treaty of Shimonoseki, with which that first war concluded. It is further in 1895 that Japan made its first official claim to Senkaku, placing the islands administratively into what is today Okinawa prefecture. The Treaty of San Francisco, formally ending World War II in 1952, specifically rules out Japanese claims to the Spratly and Paracel Islands, those in the South China Sea about which I posted last year. More important here, the treaty gave the United States trusteeship of the Nansei Shoto islands, including Senkaku.

It does not ease Chinese concerns that the end of World War II saw the United States controlling Okinawa until 1972 (whereby the United States also ceded control of Senkaku back to Japan) and setting up what is still the largest air base in the region there. It is also the United States that has stood between China and what it considers to be its province of Taiwan, first with multiple military bases and nuclear weapons on the island and then, following the switch of diplomatic recognition from the Republic of China (Taiwan) to the People’s Republic of China (mainland China) in 1979, its policy of “strategic ambiguity,” which leaves unstated whether the United States would defend Taiwan in the event of Chinese moves to retake it. Complicating the Senkaku/Diaoyu dispute is the fact that Taiwan’s government also claims the islands. Of course, China’s government has less concern over Taiwan’s claim, as in its view any territory under Taiwanese administration is Chinese territory. In fact, it is Taiwanese administration of the islands that China claims predates Japanese claims.

While it is often argued that the Taiwanese and Chinese governments did not begin objecting to Japanese control of the islands until natural gas was discovered in the area at the end of the 20th century, documents released by the U.S. National Security Archives show that the Taiwan (ROC) government, then the government recognized by the United States as “China,” specifically requested “the United States to exclude the Senkaku Islands from the reversion of Okinawa to Japan” in March 1971. Nevertheless, a 1968 UN survey had shown potential oil and gas resources in the region, so it is possible that this has motivated Chinese/Taiwanese claims.

The legitimacy of each side’s historical claims in the East China Sea is less important than the historical animosity between the two states, their governments, and their citizens. From the Chinese perspective, Japan humiliated it by taking its biggest island and than using it to expand its reach over much of Asia, including much of China, during the Second Sino-Japanese War, which became part of World War II. Japanese occupation of of mainland Chinese territory was particularly brutal.

In a recent article in the Christian Science Monitor (http://www.csmonitor.com/Commentary/Opinion/2012/0905/China-territorial-disputes-a-warning-in-the-history-of-Imperial-Japan) , Joseph Bosco, who worked in the Office of the Secretary of Defense in East Asian security affairs and retired Lietenant General Wallace Gregson, former Assistant Secretary of Defense for Asian and Pacific Security Affairs, somewhat ironically suggest that China’s current aggressive behavior regarding maritime claims is similar to that of a rising Japan in the first half of the 20th century. They argue that China today resembles a pre-WWII Japan, stinging from humiliation by Western powers, who had forced trade relations on it in the previous century. Like Japan in that period, China’s growing economic strength has led to a concomitant expansion of military power, which these authors claim enhances Chinese ambitions to expand its territorial control beyond its current borders, much as Japan did as it sought control over resources in much of Asia in the late 1930s and early 1940s.

The authors’ analogy breaks down, however, when they compare Chinese ambitions to Japan’s Greater East Asia Co-prosperity Sphere, which saw the Japanese gain physical control of China’s industrial and business centers as well as nearly all of Southeast Asia, if only briefly. Comparing Chinese claims to rocks and islands which are nearly all uninhabited, to Japan’s physical control of the Philippines, Indonesia, the Malay peninsula, Indochina and other territories that had been controlled by Western colonial powers is absurd.

IR Theory
Bosco and Gregson quote Secretary Clinton during a recent Beijing press conference: “Our two nations are trying to do something that has never been done in history, which is to write a new answer to the question of what happens when an established power and a rising power meet.” What Clinton is referring to is Organski’s power transition theory, which like all realist theory, views the anarchic international system and relative capabilities of states as the key determinants of international relations.* The key hypothesis of the theory is that major wars occur when a rising power challenges a declining power, just as John Mearsheimer’s “offensive realism” predicts coming conflict between the United States and China. An obvious counter-example to the argument of Clinton and Mearheimer, is the case of the United States, which unlike a rising Germany, did anything but challenge the United Kingdom at the point the two countries reached military or economic parity. Power transition theory explains away this anomaly by adding relative satisfaction with the current system as a key determinant of whether a rising power engages in conflict. Whereas offensive realism predicts inevitable conflict as China rises and (relatively) the United States falls, power transition theory suggests that war is likely only if China is dissatisfied with the current system. It is often assumed that China is. However, it is important to ponder why a China that has gained so much from the current system would be so quick to change it.

The weakness in realist theory is in its singular focus on the international system, at the expense of domestic determinants, to explain international politics. The history-minded Chinese leadership is undoubtedly aware that Germany and Japan failed in their challenges to the global order, and, therefore, that China should not press its claims too hard while still relatively weak. Thus it is necessary to consider domestic political reasons for China’s more aggressive posture regarding its maritime claims. First, and most self-evident, securing China’s sovereignty brings the Communist Party greater legitimacy. However, that does not explain the recent shift in Chinese assertiveness, unless the Party believes its legitimacy is threatened. This would be a more tenable hypothesis if the Party were facing eminent economic decline, as rapid development has provided the Party legitimacy in the post-Mao era.

What does possibly explain China’s more assertive maritime policies is the increasing influence of the military in Chinese politics and the rise of nationalism and, more important, its use in the factional struggle preceding this year’s scheduled leadership transition. Vice President Xi Jinping, who only recently reappeared on the scene after a mysterious brief disappearance, is by all accounts scheduled to succeed Hu Jintao as president at the 18th Party Congress, which appears to have been delayed from its originally scheduled October dates. A number of reports suggest that China’s outgoing leadership is attempting to ratchet up tensions with Japan so that Hu can retain his position as chairman of the Central Military Commission after Xi becomes president, just as Hu’s predecessor, Jiang Zemin delayed Hu’s appointment to this post as commander in chief for two years after Hu’s elevation to the presidency.

Xi’s disappearance, changing dates for the Party Congress, and rising tensions with Japan are all likely related to factional struggles taking place prior to China’s decennial leadership transition. Even in authoritarian regimes, or perhaps especially in authoritarian regimes, there is bargaining over political positions, with each faction trying to balance its power relative to others. Xi is part of the “princelings” faction, the sons and daughters of the first generation of PRC leaders, while Hu is part of the “Youth League Clique,” former members of the Communist Party Youth League. The military is also part of this bargaining, as one of the many factions seeking representation on the ruling Politburo.

All of this palace intrigue, not to mention the recent soap opera-like downfall of Bo Xilai, another princeling, is likely influencing Chinese policies in the East and South China Seas. Due to the opaque nature of the political system however, it is difficult to gauge the extent that China’s leadership is promoting the anti-Japanese ultra-nationalism in China or responding to it. China’s leaders need to be careful playing the nationalism card. As the cases of Japan and Germany indicate, extremist nationalism, once out of the bag, takes on a life of its own. China’s leaders may find themselves being wagged rather than doing the wagging, in other words, having their actions determined or constrained by nationalism, rather than simply encouraging nationalism to enhance their legitimacy.

China’s recent guiding principle with regards to its territorial disputes has been to put these contentious issues aside for the sake of developing economic relations, and the government still claims this is what it wishes to do (although actions by its own and foreign nationals may make this impossible). Waiting, of course, is in China’s interest, as in all likelihood its power will only continue to rise, particularly relative to a Japan confronted by economic stagnation and the demographic nightmare of a declining population.

Epi(b)log
As if on cue, between the initial draft of this article last week and today, anti-Japanese protests have broken out in many major Chinese cities

*It should be noted that power transition theorists view the international system as hierarchical rather than anarchic and were arguing against the traditional realist balance-of-power school, but, practically speaking neorealism also relies on hierarchy; both theories, or branches of realism, claim that it is relative capabilities that bring order to the international system.

The European Monetary Union: ‘Til Debt do Us Part

November 6, 2011 16 comments
German Logo of the ECB.

Image via Wikipedia

A monetary union without a concomitant political union is a bit like a marriage without a commitment to monogamy, and not just because both are prevalent among Europeans. The degree to which eurozone states have surrendered sovereignty  to Greater Europe is only a partial commitment. By adopting the euro, they have given up monetary sovereignty; individually,
eurozone states cannot print their own money, change their interest rates, or adjust the value of their currency. In other words, these states cannot increase their money supplies in order to stimulate short-term economic growth, they cannot lower their interest rates to spur investment or raise them to halt inflation, and they cannot devalue their currency in order to stimulate exports.

What they have given up in order to share a currency is substantial, but so are the benefits of that shared currency. Primary among them is the lowering of the transaction costs that decrease flows of goods and capital across borders. No longer does Germany trading BMWs to Italy for the latest from
Armani, Versace and Prada involve an exchange of currencies. This greatly lowers both the costs and risk of the trade. Similarly, if BMW opens a factory in Italy, it no longer needs to worry that all of its profits from sales there might be consumed by a depreciating lira (which would buy fewer deutsch marks then when the initial investment in the plant was made). Thus, both intrastate trade of goods and flows of capital in the eurozone have increased substantially since the euro was adopted at the beginning of 2001, despite falling during the recent financial crisis (see: http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=133.TRD.M.I6.Y.M.TTT.I6.4.VAL
and http://www.ecb.int/pub/pdf/scpops/ecbocp126.pdf)

But the eurozone states were not willing to jump into the deep end in their commitment to each other. They were only willing to get their feet wet to see if they liked the water (and some of them are liking it less and less of late). This was to be the first step toward a longer-term goal of a much greater commitment: political union.

Partial commitment to anything presents problems. In this case, sharing monetary and exchange rate policies without sharing fiscal (tax and spending) policies makes the success of the former more difficult. In order to join the European Economic and Monetary Union (EMU), wannabe member states have had to achieve the Maastricht criteria. These are a number of criteria related to exchange, inflation and interest rates, as well as government deficits and debt, which are to be kept below 3% and 60%, respectively. However, these criteria present a major commitment problem: prior to joining, states have incentives to meet the criteria, but after they have adopted the euro, there are weaker incentives for member states to continue to meet them. Thus, a number of member governments have deficits and debt levels far beyond those “allowed” by the EMU.

This really should not be a surprise. First, governments have surrendered monetary policy to the European Central Bank and, therefore, only have fiscal policy left to try to stimulate the economy during downturns. Second, there is no current method of automatically penalizing states that
violate the criteria (see: http://www.spiegel.de/international/business/0,1518,724239,00.html).

The data here (http://www.ecb.int/stats/gov/html/dashboard.en.html) show that in 2010, twelve eurozone countries were over the deficit target, with Ireland at 32.4%, Greece at 10.5% and Spain and Portugal at about 9%. Twelve countries are also over the debt ceiling.

This fiscal problem, which has led to the recent debt crisis in Greece and similar problems in Portugal and Ireland (two of the major beneficiaries of eurozone membership) in recent years, is indicative of a broader problem in the European integration experiment: the fundamental tensions in trying to have monetary integration without broader political integration, especially with regards to other economic policies.

Imagine, for example, that there is an economic downturn in the United States (that should not be too difficult to do). Let’s further imagine that Michigan is hit harder by this downturn than Texas. Due to political integration among the states that comprise the USA, there will be a kind of natural shift of revenues from Texas to Michigan. Relatively more taxes will be collected in Texas and relatively more spending, on safety nets like unemployment insurance and other government programs, will be in Michigan. This is one of the advantages of the American states having joined in political union.

The need for fiscal integration in order to preserve the extent of European union so far is increasingly on the minds of leaders of both the European Union and European states (see, for example: http://online.wsj.com/article/SB10001424053111904265504576564801620551890.html). What is required is the further surrendering of state sovereignty to Greater Europe. In the short term, there needs to be deficit and debt level criteria with teeth (meaning a firm punishment mechanism).  But this means the inability of politicians to respond to calls by their constituents for greater spending during economic downturns, or greater social spending in general.

The benefits of union come at significant costs; however, in the long-run, Europe cannot succeed as a monetary union unless it is also committed to political union.

China’s Rise and IR Theory: The South China Sea

September 25, 2011 21 comments
The South China Sea

Image via Wikipedia

For several years, I have been discussing in classes the puzzle of why China has become more peaceful as it has become more powerful.  Prior to the turn of the century, China had a fairly aggressive foreign security policy, even if it was limited to territorial issues and other battles near its borders. These included preventing North Korea from losing the Korean War, a border war with India in 1962, border skirmishes with the Soviet Union in 1969, and several clashes with Vietnam in the 1970s and 1980s (twice over disputed islands in the South China Sea). Then the aggression stopped.

Not only did the aggression stop, China’s foreign policy strategy in the region switched from conflict to cooperation. Following the fall of the Soviet Union in 1991, China negotiated successfully to resolve border disputes with many of the 14 states on its border. In 2002, it signed the Declaration on the Conduct of Parties in the South China Sea with the member states of the Association of Southeast Asian Nations (ASEAN).  In 2005, China agreed with Vietnam and the Philippines to explore and develop jointly oil and gas resources in the South China Sea, despite China’s claim to nearly the entire area.

China’s extensive claim to the South China Sea means that Chinese territorial claims there clash with those of other states. Various Spratley Islands are also claimed by Vietnam, Malaysia, the Philippines, Brunei and Taiwan, while the Paracel Islands are claimed by Vietnam and Taiwan.  There are known gas and oil deposits in the area that make these islands (in many cases no more than rocks big enough for a chair) more valuable than their surface area would suggest. They also provide China, which lacks air and sea power projection capabilities, a means of projecting its power beyond the mainland.

Competing South China Sea Claims

 

One Rock Claimed By the Philippines and China

Realist international relations theory suggests that China should be becoming more forceful in asserting its interests as its relative power rises. But that has not been the case. Liberalism would (more accurately for the recent past) predict that China, benefiting from links to the global economy and the international institutions that facilitate international exchange, would become more of a team player as its stake in the international system from which it benefits rises.  These macro-level approaches to analyzing international politics, in which the state is the unit of analysis, have their value. However, a micro-level approach that analyzes the decisions of leaders within domestic political institutions sheds more light on China’s past foreign policy behavior. Much IR theory ignores the preferences of domestic actors, and it’s these preferences and China’s political institutions that best explain China’s foreign policy behavior over the past two decades.

As Deng Xiaoping’s “reform and opening” (gaige kaifang) policies began to be implemented in 1979, China’s foreign policy became less aggressive. Whereas Mao, when China was weaker, sought a confrontational foreign policy that would keep the revolution going, Deng and his successors have sought a peaceful international environment that would allow them to make the most of economic globalization. And make the most of it they have.

China’s economy surpassed Japan’s last year to become the second largest in the world, and recently China has become more aggressive in asserting its South China Sea claim. Chinese boats (not always Navy boats) recently confronted vessels in the area from both the United States and India, Asia’s other rising power, as well as attempting to cut cables from a Vietnamese oil exploration vessel. A realist approach predicts this more aggressive behavior and well explains the recent efforts of regional states to balance against China. But this alliance building and multilateral approach by ASEAN states in their dealings with China is not in an effort to address the balance of power in the region; it is to address  what “defensive realist” Stephen Walt calls the “balance of threat.”  The United States is still, by far, the greatest military power in the region. But Asian states, with the notable exceptions of North Korea and, perhaps, Myanmar, know that the U.S. is little threat to them.  China, however, they do perceive as a threat. Little else could explain why Vietnam would choose to engage in naval exercises with former enemy the United States.

Perhaps realism best predicts state behavior when states feel most threatened; thus, Mao balances with the United States in the early 1970s against what he perceived to be a threatening Soviet Union and Vietnam pursues closer ties to the United States as its fears of China rise. Similarly, North Korea and Iran rapidly pursue nuclear weapons after the U.S. leader declares they are part of an axis of evil and invades the third member of the axis.

Realists claim that it is relative state capabilities that bring structure to an anarchic international system.  China’s capabilities have made it the nearest rival of the United States in terms of economic output and its military should gradually close the gap with the United States over the coming decades.  China’s relative rise and the concomitant decline of the United States, should it continue, will present a grand experiment for the two major international relations theories. Realism, particularly John Mearsheimer’s brand of “offensive realism” predicts conflict between the United States and China. Liberalism, in contrast, suggests that international institutions (including multilateral bodies, but also norms) will constrain China’s behavior as it rises. Time will tell. Or, perhaps, history will show that what matters most is the decisions of political leaders based on their perception not so much of national interest in the international system but of self-interest domestically, as they seek foreign policies that will help them to maintain office.

Economic development is one pillar of legitimacy for the Chinese Communist Party (CCP), which, of course, has no electoral legitimacy. A secondary pillar is nationalism. Using an approach that assumes political leaders wish to remain in power and that their policies reflect that aim, I predict that if China’s economy falters in the future, the CCP will put more of its weight on the nationalism pillar. In doing so they will take more aggressive foreign policy actions, particularly those that spark nationalism, such as actions supporting China’s sovereignty claims in the South China Sea, and, if the Party’s grip on power is really threatened, moves toward Taiwan. No foreign policy action would unite the Chinese people more than an effort to retake Taiwan. While realism predicts conflict from a rising China and liberalism, cooperation, a micro-level approach suggests that leaders will do what is in their best interest politically. Sometimes that is to engage in conflict with other states; sometimes it is to cooperate with them.

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