1 Asia and the Rise of China

1.1 The Rise of China and the Asian Regional Order

One of the most significant events in international affairs after the end of the Cold War is the rapid economic growth of China, an authoritarian state. Spanning 40 years, China has made remarkable progress, with an average double-digit economic growth rate. When the edict for reform and opening-up came in 1978, China’s GDP was estimated at 364.5 billion yuan, and the GDP per capita was a mere 381 yuan. Nevertheless, some 30 years later, in 2010, the per capita GDP reached 29,762 yuan and the GDP reached 397,459 billion yuan (approximately 5 trillion US dollars), surpassing Japan and jumping to second globally after the US Some forecasts suggest China’s economy will overtake the US by 2031 at the earliest (Zhu and Orlik 2021). If China’s economic growth continues, it will be the first time that an undemocratic nation has the greatest influence in the postwar international order.

In the process of power transitions, the risk of conflict and war is even more likely to increase. The prominent American international political scientist Graham Allison warns about the pattern of structural stress that results when a rising power challenges the incumbent power, which is the tendency described by the term the Thucydides Trap, a scenario that Allison urges to avoid (Allison 2017).

Although academic opinions differ greatly on how the rise of China will affect the international order, it can be summarized by the following three lines of thinking: first, some scholars argue that China is attempting to overturn the Western-led international order to fashion an order that excludes the West (Barma et al. 2009); second, some hold that while the American era of unipolarity may eventually come to an end, the US-led international order can remain dominant even while integrating a more powerful China (Ikenberry 2008); and third, others argue that China is both a supporter and reformer of the international order (Swaine 2016). In the midst of these debates, China itself takes the stance of being a “supporter and reformer of the international order,” and President Xi Jinping has frequently noted that the world order is not perfect, but it cannot be easily overturned.

Asia is probably the best region to analyze the dynamic pattern of China’s rise, and its regional and global impact. Asia is China’s backyard, the region first and most affected by China’s rise. Moreover, in addition to the strong influence the United States continues to exert over the Asia–Pacific region, a variety of other world and regional major powers—including the global power Russia, the world’s third largest economy Japan and emerging power India—are also clustered here, playing key roles in shaping the regional and global order. Thus, the Asian region harbors two simultaneous factors: the competition for global strategic advantage and the reestablishment of regional order.

More than 30 years after the end of the Cold War, while China’s rise is evident, it has not achieved absolute dominance in Asia and is still struggling to forge a regional order that works in its favor. The Asian region currently features three prominent characteristics. First, there is no regional economic integration movement that spans the entire Asian region, nor is there a regional institution like the European Union that spans most of Europe. Although there are the Russian-led Commonwealth of Independent States (CIS) and the Collective Security Treaty Organization (CSTO) in central Asia, the Six-Party Talks in Northeast Asia, ASEAN in Southeast Asia, and the South Asian Association for Regional Cooperation (SAARC) in South Asia, there is no single regional organization that sets the rules for political, security and economic development of the entire Asian region.

Second, among the numerous organizations in the Asian region, most are regional organizations for economic cooperation, while there are few regional organizations related to security (Pekkanen 2016). In February 2018, 11 countries, including Japan, Malaysia, Singapore, Vietnam, Australia and Canada, signed the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). Then, in November 2020, 15 countries, comprising ten ASEAN countries and Japan, China, South Korea, Australia, and New Zealand, signed the Regional Comprehensive Economic Partnership Agreement (RCEP). As globalization declines around the world, the momentum for economic cooperation is increasing in the Asia–Pacific region. Even so, hopes for economic cooperation covering the entire Asian region remain unrealistic.

Third, while the US plays an important role in the security arena in Asia, China is beginning to play a central role in the economic sector (Feigenbaum and Manning 2013). This “dual hierarchy” or “dual dependence dilemma” in economy and security (Kato 2012) is another characteristic of the Asian regional order that accompanies the rise of China.

In sum, in Asia, where the rise of China is most evident, US dominance in the political-security arena remains, with various regional organizations wielding influence in the subregion. All of this amplifies the fact that China’s regional rise in Asia is uneven in terms of military, economic, diplomatic, and soft power.

1.2 Competing Interpretations of the Nature of the Asian Order

Why does the Asian region embody all three of these salient features as China became more influential? The mushrooming establishment of regional organizations in Asia is a result of institutional balancing in the region (He 2008) and the prominence of individual national strategies in effectively addressing regional issues (Pempel 2010). Furthermore, due to the existence of the “consociational security order” (Acharya 2014) in Asia, the reluctance of middle powers, which depend on the United States for security and on China for trade and economics, to adopt a full-scale balancing strategy against China acts as a restraint on the dynamics of the balance of power (Ikenberry 2016).

The question is whether the above explanatory variables enable lasting competitive coexistence between the US and China (Shambaugh 2018), or, as Mearsheimer argues, the rise of China cannot be peaceful, so will the middle powers of Asia eventually join the American camp (Mearsheimer 2010)?

This chapter explains the characteristics of the current Asian regional order from the perspective of China’s Asian policy after the end of the Cold War, and it verifies how the characteristics of the Asian regional order were created amidst Chinese policy and the reaction to China from Asian countries.

1.3 What is China’s Asia Diplomacy?

The term “Asia diplomacy” only appeared in Chinese foreign policy after the 2000s. For a long time after the founding of the country, China adopted an Asian-African policy. For a long time after the Cold War, “peripheral diplomacy” was a synonym for China’s Asia diplomacy. The term “periphery” has three geopolitical meanings in China. Asia in the narrow sense refers to the 14 neighboring countries that share land borders with China, and this is also referred to as the “narrow peripheral” (xiao zhoubian). Asia, in the broad sense, refers to a wide area from the Persian Gulf at the western end to the South Pacific region at the eastern end, and this is termed as the “grand peripheral” (da zhoubian).Footnote 1 Periphery as an intermediate concept refers to the four regions of Northeast Asia, Southeast Asia, South Asia and Central Asia. Although the policy category of “Asia diplomacy” is still not widely used in China, China’s peripheral diplomacy can be rearticulated as China’s Asia diplomacy.

Asia is a very hazy concept both geographically and culturally, and it is not always clear which countries can be called Asian ones. According to the definition of the Ministry of Foreign Affairs of the People’s Republic of China, Asia refers to a large region consisting of 46 countries.Footnote 2 Based on this concept, this paper defines Asia as Northeast Asia, Southeast Asia, South Asia and Central Asia in line with the reality of China’s Asia diplomacy, which has gradually formed since the end of the Cold War. Hence, this paper analyzes 28 countries, including the Six-Party talks, ASEAN, SAARC and SCO (Shanghai Cooperation Organization) participating countries (29 countries including China but excluding the US) (Table 14.1).

Table 14.1 Asia and regional organizations
Full size table

While China’s presence in the region is growing rapidly, the strengthening of China’s relations with its Asian neighbors has only really progressed since the end of the Cold War, which is a relatively new phenomenon. Looking back on the regional rise of China after the Cold War, it can be divided into the following three periods.

  1. 1.

    Improving and Establishing Diplomatic Relations (End of Cold War–1996)

  2. 2.

    China’s Engagement Policy and its Rising Influence (1996–2006)

  3. 3.

    US-China Strategic Competition and China’s Asia Policy (2006–Present)

Throughout these three periods, China’s sphere of influence has shifted from the “narrow periphery” to the “grand periphery,” and China is undergoing a transformation from a regional power to a global power, aiming to achieve global supremacy.

2 Improving and Establishing Diplomatic Relations (End of Cold War–1996)

China has been unswervingly proud of being an “Asian country,” but it did not begin to develop foreign policies specific to the Asian region until the 1990s. In the 1980s, adopting a reform and opening-up policy and positioning its own economic development as the most important policy issue, China emphasized relations with Japan and the developed nations of Europe and the US, devoting itself to the introduction of funds and technologies from those developed nations. This foreign policy turning point came shortly after the Tiananmen Square incident, when China cracked down on pro-democracy students. Economic sanctions against China by Western countries, including Japan, led China to recognize the importance of Asian and African countries, which had been neglected in Chinese foreign policy in the 1980s. To break international isolation, China turned to strengthening ties with Asian countries.

Immediately after the end of the Cold War, China adopted a foreign strategy consisting of four strategic pillars: peripheral diplomacy (“One Circle”: yi quan), diplomacy for developed nations (“One Line”: yi lie), diplomacy for developing nations (“One Area”: yi pian) and diplomacy for the US (“One Point”: yi dian). Since then, peripheral diplomacy has emerged as one of key components of China’s foreign strategy.

China’s strong interest in Asia is evident from the fact that it played a key role in maintaining financial stability during the 1997–1998 Asian financial crisis by not devaluing the Chinese currency (Renminbi). In fact, China’s enormous efforts to improve relations with its neighboring countries began in 1990 with the normalization of diplomatic relations with Mongolia in May 1990, Indonesia in August 1990 and Vietnam in November 1991. Further, it established diplomatic relations with Singapore in October 1990, Brunei in September 1991, and South Korea in August 1992.

After cementing diplomatic relations, China began to demarcate its land borders, involving approximately 22,000 km of borders with 14 countries. In the 1960s, China signed border agreements with Myanmar (Burma at the time), Nepal, Pakistan, Afghanistan, North Korea and Mongolia. China again proceeded to conclude border agreements in the 1990s. Over the course of some ten years, China signed border agreements with Russia, Kazakhstan, Kyrgyzstan and Tajikistan, as well as land border agreements with Laos and Vietnam. To date, demarcation of about 90% of the border line covering 22,000 km has been completed.

In tandem with the work to establish land borders, China’s awareness of the sea (18,000 km of territorial waters) increased dramatically from the 1990s. In December 2000, China and Vietnam signed agreements on the maritime boundary for the Gulf of Tonkin and for Exclusive Economic Zones (EEZ). The median line principle was applied to these agreements. The question of possession in attributing the median line located on Bach Long Vi Island was not mentioned in the agreement for the maritime boundary for the Gulf of Tonkin, and the concept of “joint fishing area” was proposed by China and Vietnam in order to shelve this issue (Yang and Zhang 2002: 319). This border agreement with Vietnam is currently the first and only maritime border agreement that China has signed.

While instability in the domestic political situation may have brought about China’s cooperative stance (Fravel 2008), the success of border demarcation negotiations has led to a dramatic expansion of trade between China and its neighbors as a result of deepening political relations. In this sense, China’s peripheral diplomacy, which began in the early 1990s, has laid the foundation for political, economic, and cultural integration with its neighbors.

3 China’s Engagement Policy and Its Rising Influence (1996–2006)

Whereas Western democracies have adopted a policy of engagement with China in the post-Cold War era, China has also commenced an active engagement policy in Asia since the latter half of the 1990s. Especially after the official decision of the National People’s Congress in 2000 to “develop western China,” relations with neighboring countries, which are a valuable source of energy and an important overseas market, have become increasingly important as a policy issue. Under these circumstances, a proactive diplomatic stance toward neighboring countries was ratified at the 16th Party Congress, making diplomacy in Asia the most important issue in foreign strategy. In the five-year diplomatic guidelines adopted at that congress, the first 20 years of the twenty-first century are regarded as a “strategic opportunity,” with the tenets turned into the slogan: “big powers are the key: neighbors are paramount; developing countries are the foundation, and multilateral diplomacy is an important stage.”

Since around 1996, several factors are entwined in the background of China’s proactive diplomatic offensive in the Asian region. First are security factors. Since 1995, from the perspective of China, there have been a series of events that have shaken the very foundations of structural stability of Japan-US-China relations. In June 1995, US President Clinton allowed Taiwan President Lee Teng-hui to visit the US, and in March 1996, China conducted a menacing missile military exercise in the Taiwan Strait during the first direct presidential election in Taiwan, raising tensions in US-China relations. Likewise, China’s sense of crisis leapt in the wake of the Japan-US Joint Declaration on Security—Alliance for the 21st Century signed by President Clinton and Prime Minister Ryutaro Hashimoto in April 1996. China considered the strengthening of the Japan-US security setup in Asia in connection with the eastern expansion of NATO in Europe and was deeply concerned about being cordoned off by the US and the implications for the Taiwan issue. To disperse such concerns, China reviewed its foreign strategy, which places the greatest priority on the US, and commenced outright development of diplomacy in Asia.

Second, the growing membership of ASEAN to include Vietnam in 1995, Laos and Myanmar in 1997 as well as Cambodia in 1999. As its membership has expanded, ASEAN has become physically adjacent to China, which has prompted China to focus on its strategy toward ASEAN.

Third is the takeoff of the Greater Mekong Subregion (GMS) economic cooperation program. The GMS regional cooperation framework involving Yunnan, which started in 1992, was formed in 1996, and six priority projects were selected. Needless to say, the economic benefits that came with specific joint development were attractive to China.

From this period, China’s influence in Asia expanded rapidly. This success was brought about by China’s engagement strategy in Asian countries, which consists of the following three pillars.

3.1 Proactive Engagement in Asian Regional Organizations

In addition to the bilateral diplomacy in which China excels, China has been proactively participating in regional organizations in the Asian region since the latter half of the 1990s. The Shanghai Cooperation Organization (SCO) is a framework for cooperation between China and Central Asian countries. The SCO began in 1996 as the “Shanghai Five” (China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan) with the aim of conducting border demarcation negotiations and was upgraded to a permanent organization, the SCO, in June 2001. SCO’s participating members, including observers and dialogue partners, have now expanded to the Indian Ocean and Eastern Europe.

China has been actively promoting security and economic cooperation in the SCO initiative, and through the SCO it has significantly expanded its presence in Central Asia, a region in which it previously had little influence. While China is now an important trading partner for all SCO countries, Russia remains the dominant security player in the region. China’s security cooperation with the SCO countries is limited to activities centered on border control and counterterrorism.

Since the latter half of the 1990s, China is also proactively striving to galvanize relations with Southeast Asian countries. A major obstacle to promoting such relations is the issue of sovereignty over the South China Sea. To resolve this obstacle, in 1997, China entered into a good-neighbor and mutual trust partnership with ASEAN countries oriented toward the twenty-first century and, in 2002, signed the Declaration on the Conduct of Parties in The South China Sea as a step toward peacefully resolving the sovereignty issue of the South China Sea. Additionally, in August 2003, at the ASEAN-China Summit, a joint declaration on strategic partnership for peace and prosperity was signed. With this, China became the first foreign country to accede to the Treaty of Amity and Cooperation in Southeast Asia. This series of agreements undoubtedly promoted political trust between the two sides.

During the Asian financial crisis of 1997, China’s policy of not devaluing the yuan helped the economic stability of Southeast Asian countries, rapidly bolstering China’s presence in Southeast Asia. The image of China in Southeast Asian countries has gradually shifted from a security threat to an economic opportunity.

In Northeast Asia, China presided over the Six-Party Talks and proactively engaged in mediation and diplomacy. In China, at the time, there was very little support for the Six-Party Talks within top-level discussion on North Korea’s nuclear development. Yet, the US attack on Iraq from 20 March 2003 gave a significant boost to the Chinese government’s decision to host the Six-Party Talks. In the same month, US President George W. Bush revealed the possibility of armed confrontation in response to the North Korean nuclear threat. Against this backdrop, North Korea is increasingly seen as the Far East’s version of Iraq. Thus, unlike the first nuclear crisis, concerns about the logic of a first strike applied to North Korea were spreading widely not only in Japan and South Korea, but also in China (Rozman 2007). This concern eventually prompted China to agree to hold the three-day Six-Party Talks in China from 27 until 29 August 2003.

After efforts to build relations in Northeast Asia, Southeast Asia and Central Asia, China has turned to engage with neighboring SAARC in the mid of 2000s. At the 13th SAARC Summit in November 2005, China and Japan were approved as observers at the same time. Nepal strongly supported observer status for China, but India pushed for Japan’s participation as an observer to counter China. The penetrative influence of China in South Asia (where India is robustly influential) lags behind compared with other Asian regions.

Thus, by participating in the various regional organizations in Asia, China’s influence permeated all of Asia.

3.2 Promotion of Economic Integration in Asia Centered on China

One of the vital strategies for establishing China’s superiority in the Asian region was the construction of an FTA area centered on China, which was, in real terms, Asian economic integration. China’s Premier Zhu Rongji proposed an FTA to ASEAN countries in 2000, and in 2003, Premier Wen Jiabao proposed an FTA to SCO. China also bolstered relations with SAARC and proactively developed diplomacy in Asia with the idea of strengthening economic relations through multilateral cooperation. In fact, ACFTA (ASEAN China Free Trade Agreement) came into effect in 2010,Footnote 3 while the FTA offered by China to the SCO is currently unlikely. Nevertheless, if the economic integration strategy to promote the rise of China evolves smoothly, a huge China-based FTA will emerge in Asia, forming a unified Asian market mediated by China.

In addition to GMS, China is also focusing on subregional economic partnerships, such as development of the Tumen River region and a CAREC (Central Asia Regional Economic Cooperation) initiative spearheaded by the ADB. Although the latter two projects have stagnated due to North Korea’s nuclear development and the Eastern Turkistan Islamic Movement in Central Asia, relations between China and Cambodia, Laos, Myanmar, and Thailand have made great strides via GMS.

Even though China’s foreign strategy promoted since the 2000s has not lived up to its expectations, the construction of an FTA area centered on China is still being undertaken as one of its important strategic goals.

3.3 Consolidating Relations and Building Military Cooperation via Non-Traditional Security

During this period, China strengthened interaction with neighboring countries in the field of non-traditional security and promoted substantial military exchanges to consolidate security relations. What is noteworthy here is that the proposal of China’s new security concept played an important role in promoting security ties between China and Asian countries. Coupled with a strategic shift toward focusing on Asia, China raised the new security concept in the latter half of the 1990s and presented a position paper on it at the ARF (ASEAN Regional Forum) foreign ministers’ meeting in July 2002. This new security concept emphasizes cooperative and comprehensive security, and by tacitly acknowledging the hub-and-spokes security system led by the US, many Asian countries have found it possible to cooperate with China.

Amidst minimal military interaction with Asian countries, China is consolidating military relations via joint patrols, anti-terrorism activities, protection of sea routes, humanitarian and disaster assistance, and peacekeeping operations (Aoyama 2013). According to Japan’s Annual Defence White Paper, China is conducting joint patrols with Russia, Kazakhstan, Mongolia, Vietnam and other countries in border areas. Additionally, China, Myanmar, Laos, and Thailand are working on drug control in the Golden Triangle with some success. Moreover, China regularly holds joint military exercises geared to anti-terrorism and maritime rescue with SCO countries, such as Pakistan, India, Thailand, and Indonesia.

Indeed, the cooperation of the four countries of China, Myanmar, Laos, and Thailand in the Golden Triangle is remarkable and has had some success, too. The taskforce has been formed since 2000, and the cooperation of the four countries on drug control continues.Footnote 4

Through these non-traditional security engagement policies, China sought to build substantial military interaction with Asian countries while avoiding conflict with the US.

4 US-China Strategic Competition and China’s Asia Policy

Since the latter half of the 2000s, China, which had been steadily deepening relations with Asian countries, revised its Asia policy based on the doctrine of “hide one’s capabilities and bide one’s time” (taoguang yanghui). Under these conditions, the geopolitical regional environment surrounding the rise of China has also changed significantly. As globalization declines around the world, the momentum for economic cooperation is increasing in the Asian-Pacific region. The Comprehensive and Progressive Agreement on the Pacific Rim Partnership (CPTPP) came into effect in December 2018, and the Regional Comprehensive Economic Partnership (RCEP) Agreement came into effect in January 2022. Conversely, with the rise of China, strategic competition between China and regional powers, such as Japan and India, has escalated, while the US has also adopted a robust policy toward China to consolidate its strategic primacy.

4.1 A Confident Turning Point in China’s Foreign Policy

China’s foreign policy came to a turning point in 2006. At the central foreign affairs work conference held in August 2006, China clearly stressed the importance of sovereignty and security, and sought national interests in economic development, sovereignty, and security (Aoyama 2013). The United Nations Convention on the Law of the Sea (UNCLOS 1994) triggered China into redefining national interests. UNCLOS introduced a new EEZ, setting the deadline for submitting application documents as 12 May 2009 for all countries. In view of that deadline, from around 2006, China added “national sovereignty and security” as a new national interest in addition to conventional economic development. Since then, China stresses foreign policy that contributes to national sovereignty, security, and development of interests, and it takes a strong stance on core national interests, such as maritime issues.

Since redefining national interests, the conflict between China and other countriesFootnote 5 involved in the South China Sea issue is escalating. On 12 July 2016, the Permanent Court of Arbitration in The Hague, Netherlands, ruled that China’s claim of sovereignty in the South China Sea had no legal basis. Nevertheless, China remains obdurate on the issue of maritime territorial disputes, deeming territorial rights of the South China Sea as being outside the jurisdiction of the court of arbitration and issuing a statement ignoring the ruling.

Even the Senkaku Islands issue, stifled by the governments of Japan and China since the normalization of Japan–China diplomatic relations (Fravel 2010), has suddenly flared up. Following the nationalization of the Senkaku Islands by the Japanese government in 2012, the Chinese government announced in 2013 the establishment of an air defense identification zone over a wide area of the East China Sea, including the sky above the Senkaku Islands, hence mutual distrust is intensifying.

In an effort to transform itself into a maritime nation, China is implementing an Anti-Access/area denial (A2/AD) strategy and is now using it in an attempt to pierce the second island chainFootnote 6 connecting the Izu Islands to Guam and Papua New Guinea. Since 2013, China is undertaking reclamation work on seven islands in the South China Sea, including Mischief Reef and Fiery Cross Reef, installing control towers, radar equipment, runways and storage facilities capable of accommodating fighter jets and the deployment of surface-to-air missiles.Footnote 7 Thus, China is bolstering its effective control in the East China Sea and South China Sea under the Xi Jinping regime’s policy of not conceding any inch of territory in territorial disputes.Footnote 8 Not only does China send navy and coastguard vessels to patrol regularly, but it is also pursuing gray-zone tactics using private fishing vessels.

China is also discussing a binding code of conduct (COC) framework with ASEAN countries. In March 2017, China and ASEAN member countries compiled a draft code of conduct for the South China Sea. However, amidst the intensifying conflict between the US and China, COC negotiations have been deadlocked since 2019, without a settlement on eliminating foreign countries as China intended.

It is also worth noting that the Tibet and Xinjiang cases further boosted China’s sovereignty-focused foreign policy. The outbreak of Tibetan unrest occurred on 14 March 2008, while the Urumqi riots in Xinjiang took place on 5 July 2009 (Urumqi 7·5 riots). Both incidents occurred while China was celebrating the 60th anniversary of the founding of the country, so the mood was for greater emphasis on national unity and sovereignty, thus China strengthened oppressive policies in the regions of Tibet and Xinjiang. Then, in June 2020, China introduced the “Hong Kong national security law” and discarded the “one country, two systems” principle, which should have remained in place to maintain the capitalist system and lifestyle of the people of Hong Kong for 50 years after its return to mainland China.

4.2 China’s Belt and Road Initiative

China’s foreign policy has undergone a further shift since Xi Jinping took power. He announced the Silk Road Economic Belt initiative in September 2013 and the 21st Century Maritime Silk Road initiative in October 2013, which are the two pillars of China’s Belt and Road Initiative (BRI). Via BRI, China seeks to expand its influence in the international community through cooperation in areas such as logistics, trade, finance, politics and thinktanks with the countries involved in the BRI.

China’s strategic rationale underpinning the BRI is extremely ambivalent. Although the Chinese government has not officially stated that the US is in decline, it has acknowledged since around 2017 that the world will undergo a once-in-a-century transformation (Swaine 2021). And, regarding the future international order, the perception that the US and China are moving toward a bipolar international system is becoming mainstream in China. According to the prominent scholar Yan Xuetong, in ten years, the GDP of any given country will be less than half or a quarter of the US and China, and he envisages the world to be a place where these two superpowers compete.

Furthermore, there is also a deep-seated sense of crisis in the Chinese government about the survival of the communist regime. A Chinese diplomacy white paper first mentioned “safety diplomacy” in 2010, and at the first meeting of the Central State Security Committee held in April 2014, President Xi Jinping further introduced the concept of “overall national security (Zhang 2016),” appealing for the ensuring of “human security, political security, economic security, military, cultural and societal security” in the socialist national system. Amid concerns about the security of the system, China’s foreign policy has become more ideological, and economic self-reliance is now greatly emphasized.

4.3 Characteristics of China’s Foreign Strategy Since 2006

The BRI sets the strategic goal of creating an area of influence centered on China. In 2016, the Chinese government submitted the “Green BRI”, and, in October 2020, it submitted the “Dual Circulation” strategy at the 5th plenary meeting of the 19th CPC Central Committee to promote the digital yuan, making the building of a digital economic zone through financial cooperation and e-commerce an important policy issue.

China’s foreign policy, which has been gradually changing since 2006, has the following five characteristics. First, since 2006, China has focused on “south-south cooperation,” which strengthens cooperation with developing countries. The main constituent countries of the BRI are developing countries, and the construction of a digital economic zone and a Green BRI are being promoted via the galvanization of relations with those developing countries.

Second, especially since the 2010s, China has been focusing on establishing an organization centered on itself. Following the BRICS New Development Bank (NDB) launched in July 2015, the Asian Infrastructure Investment Bank (AIIB) opened in January 2016. And, to counter the Shangri-La Dialogue Summit staged by the UK-founded International Institute for Strategic Studies (IISS), China launched the Xiangshan Forum. Also, proactively involved in the development of the GMS since the 1990s, China established in 2016 its counter organization, the Lancang-Mekong Cooperation, which it spearheads.

Third, economic integration has become an important pillar of China’s foreign strategy. The construction of an FTA network centered on China along the BRI is also being incorporated into China’s 13th Five-Year Plan. China believes the rules of the CPTPP, Trade in Services Agreement (TiSA) and Japan-EU Economic Partnership Agreement (EPA) will become global standards from here on, so it is aware that it ought to also proactively adopt the rules that govern the TPP, EPA and other such agreements (Ka and Shen 2013: 56–7). The Chinese government also recognizes that it needs to take measures to address issues, such as negative list, Investor-State Dispute Settlement (ISDS), intellectual property, environmental protection, worker protection and state-owned enterprise policies, with the aim of the policies being to build a broad, advanced-level FTA. Against this background, China officially applied to become a member of the CPTPP in September 2021.

Fourth, since its founding, China has consistently dangled its huge markets as carrots and used them to strengthen political relations with other countries, but in recent years, it has used its increased economic power as a stick to punish the actions of other countries. Now it frequently imposes economic sanctions on policies of other countries that are not in line with its own national interests—for instance, rare earth export sanction against Japan after a fishing boat collision in the waters near the Senkaku Islands; import restrictions on Philippine bananas as part of the standoff between Manila and Beijing over the Scarborough Shoals (commonly known as the China-Philippine Banana War), and a ban on tour-group travel to South Korea as economic retaliation against South Korea for deploying US Terminal High Altitude Area Defense (THAAD) missiles.

Fifth, while focusing on foreign interaction centered on non-traditional security, China is also trying to play a role in security in the Asian region. It is actively developing diplomacy over the upkeep of stability in the area around Afghanistan after the withdrawal of US troops and in the handling of the Rohingya issue.

5 Strategic Competition Between China and the United States and the Future of Regional Order in Asia

After the Obama administration’s pivot back to Asia policy from 2011 onward, the US gradually strengthened its policy of deterrence toward China. Under the Trump administration, which advocated the US first principle, the US-China trade war intensified. The Biden administration, which expresses the view that Western democracies are competing with a dictatorship, is strengthening the cohesion of democracies and building various international frameworks to counter China.

The Quadrilateral Security Dialogue (Quad), a framework for discussing security and economics in which Japan, the US, Australia, and India participate, covers seven fields: global health, infrastructure, climate change, human interaction and education, important emerging technologies, cyber security and space. On 15 September 2021, AUKUS, a trilateral security partnership between Australia, the UK, and the US, got underway. To conter China’s BRI, the Biden adminstration’s Indo-Pacific Economic Framework for Prosperity (IPEF) is focusing on (1) trade; (2) supply chains; (3) clean energy, decarbonization, and infrastructure; and (4) tax and anti-corruption.

On top of the Quad, AUKUS, IPEF and other such initiatives, the Biden administration and its allies are promoting the exclusion of Chinese telecom companies and Chinese manufactured telecommunications equipment from their networks, building a semiconductor supply chain and strengthening cooperation in forming common standards related to areas such as trade practices, AI and cyber security, which are all handled in China without being based on market economies.

Conversely, as the annexation of Crimea worsens the relations between Russia and Western countries, China-Russia relations are swiftly warming. In 2015, China and Russia signed a joint statement on cooperation between the China-led Silk Road Economic Belt and the Russia-led Eurasian Economic Union (EAEU), with the cooperation agreement on economic trade between China and the EAEU coming into effect in October 2019. Cooperation between the two countries has been strengthened by Russia’s invasion of Ukraine and the escalating rivalry between the United States and China.

Currently, the two countries are cooperating not only in energy and infrastructure, but also in a wide range of fields, such as data communication, e-commerce, space and Arctic development. In June 2021, they announced that they would extend the treaty of good-neighborliness and friendly cooperation for five years, and they also signed a military cooperation agreement (five years) in November 2021. Under these circumstances, the SCO spearheaded by China and Russia expanded further, and in 2021, Saudi Arabia, Egypt and Qatar became dialogue partners of the SCO.

And Southeast Asian countries have not relaxed their stance of balanced diplomacy to strengthen relations with the US and China. In June 2019, the AOIP (ASEAN Outlook on Indo Pacific) was announced, with emphasis placed on ASEAN centrality, and in October 2021, ASEAN simultaneously upgraded its relations with China and Australia to full strategic partnerships.

Hence, especially since the Trump administration, strategic competition has escalated between the US and China, giving notice of the end of the era of “parallel resurgence” (Goh 2013). Now, in the Asian region, the US-Japan-led Free and Open Indo Pacific (FOIP) and the China-led BRI are being simultaneously promoted, and, while the Quad countries are strengthening relations, China and Russia are getting closer to each other at the same time. The US is putting pressure on China through its ties with democracies, but China is trying to expand its influence in partnerships with developing countries.

In addition to the nuclear issue on the Korean Peninsula, issues in the Taiwan Strait, the East China Sea and South China Sea as well as the mercurial situation in Afghanistan have created a fluid security environment in the Asian region. Under these circumstances, the head of Pacific Command in March 2021, Admiral Philip S. Davidson, warned that the risk of a Chinese invasion of Taiwan within the next seven years is extremely high,Footnote 9 which in turn triggered a debate on how the Taiwan Strait is “The most dangerous place on Earth,”Footnote 10 hence, the security of the Taiwan Strait too has surfaced as an important issue in Asia.

The American foreign strategy and Chinese foreign strategy are synchronized in a stance of emphasizing ideology and economic security over strategic superiority. Nonetheless, economic decoupling of the two blocs (US and China) is not easy, and the trend of economic integration and security conflict are progressing simultaneously. Needless to say, this is also due to the direction China’s foreign policy. The foreign strategies that the US and China are aiming at contradicts the status quo of regional economic partnerships, and the role of steering a course for the Asian regional order is instead being taken up by the ASEAN and other middle powers.