Asia's strategic landscape is shifting. With colonialism and the Cold War now distant memories, regional political alignments are more flexible, open-ended, and constructive than they have been since the mid-20th century. Region-wide stability and the adoption of market-oriented economic policies have unleashed growth and sparked record levels of trade and investment. The peaceful management of disputes has become the rule rather than the exception.
Of the various structural changes marking this new landscape, none stands out more than China's resurgence as the leading power in East Asia. China's combination of a large and growing economy, newfound military restraint, and skillful diplomacy is a recipe for expanded influence. Its growing regional role reflects both an increase in underlying power resources (fueled primarily by rapid economic growth) and improvements in Beijing's ability to translate power into influence via effective diplomacy.
Until the mid-1990s, China was wary of regional organizations, preferring to deal with other Asian governments on a bilateral basis. Its regional security behavior was mixed, to say the least. China maintained assertive positions on its territorial and sovereignty claims and sometimes used military means to reinforce its positions. In February 1995, China seized Mischief Reef in the South China Sea, and its military forces conducted military exercises and missile tests near Taiwan in July-August 1995 and March 1996--both provoking critical reactions from the region and the United States.
Beijing's concerns about the unfolding "China threat" debate prompted a significant adjustment in its approach to the region. (1) Chinese leaders decided that economic modernization and the maintenance of domestic stability required constructive relations with the United States and a peaceful environment in Asia. These goals in turn demanded restraint in the use of military threats and active efforts to reassure neighboring countries of China's benign intentions.
This policy reorientation included, or was at least consistent with, more diplomatic engagement with other Asian countries, skillful use of commercial diplomacy (including trade agreements, foreign aid, and investment), and a more welcoming approach to participation in regional institutions. Beijing now plays a constructive role in the Asian integration movement and has embraced interactions with regional organizations such as the Association of Southeast Asian Nations (ASEAN). (2) Most East Asian officials and defense intellectuals now see China as a status-quo power, at least for the foreseeable future.
China's strengths in the region should not be exaggerated, however. Its soft and hard power alike lag far behind the United States. Much has been made of China's alleged soft power, but its behavior and stated intentions reflect adjustment to Southeast Asian norms, not vice versa. (3) Moreover, China's domestic political stability remains vulnerable to potential moves by external actors that lie largely outside of Beijing's control. These include decisions affecting the future of Taiwan, the fate of the North Korean regime, the legacy of Japan's wartime record, and the outcome of territorial disputes in the East and South China Seas. Also relevant to China's domestic future are possible U.S. moves to restrict Chinese imports, American and European pressure to revalue the yuan, and the possibility of a global recession. Any combination of such events could stall China's economic modernization, thwart rising expectations, and threaten domestic stability.
East Asian elites are well aware of China's severe social and environmental problems, authoritarian political system, and ugly human rights record. They have no intention of becoming dominated by China or anyone else. They respect American power, even if they think it is misused. Virtually all of them want the United States to engage with the region on a more sustained and high--level basis. …