China is probably the most geopolitically competent great power today. Look, for example, at its deft handling of its difficult relationship with Japan. The wounds have clearly not healed from the period of Japanese occupation of China from 1931 to 1945. Despite the inherent difficulties and tensions, the Beijing leadership has succeeded in managing its relationship with Japan. In April 2007, during Chinese Premier Wen Jiabao’s official visit to Tokyo, he displayed great political skill with a speech to the Japanese parliament that was both politically acceptable to Japan’s detractors in China and politically palatable to a sceptical Japanese public. The decision by China not to focus on previous wounds and humiliation reflects a very carefully thought-out strategy. Eventually, as China becomes strong and powerful, its neighbours will have to adapt to its rise and acknowledge Chinese power. China need not impose its views or perspectives on others.
Western incompetence has provided significant opportunities that China has been able to cleverly and carefully exploit. China has succeeded in establishing an extremely close relationship with the Bush administration, despite its domination by neocons suspicious of China. The geopolitical accidents of 9/11 and the invasion of Iraq helped. But China was able to strengthen its relationship with America without damaging its ties with the Islamic world. Even more important, China is emerging slowly but carefully as a global geopolitical player by making careful inroads into Latin America and Africa.
At the end of the Cold War, when America lost interest in Asean and began to drift away, China continued to court Asean. During the Asian financial crisis of 1997–98, at considerable economic cost to itself, Beijing refused to devalue its currency, maintaining a rate of 8.3 renminbi to a dollar. Had China devalued, that would have undermined efforts by the affected Asean countries to restore their economies. In addition, China gave economic assistance of more than $1 billion to Indonesia and another $1 billion to Thailand. Many Asean countries still remember that America dithered before reaching out to help during this crisis. Japan, which also had the resources to stimulate recovery, helped less than China.
At the Asean-China Summit in November 2001, China stunned Asean leaders by offering a free trade agreement (FTA). A year after the proposal, the final FTA was signed at the eighth Asean Summit in Cambodia. The China-Asean FTA, when implemented in totality, will constitute a common market of 1.7 billion people, with a combined GDP of $1.5-2 trillion.
Until recently, Asean trade with the US, Japan and EU was far greater than its trade with China. Few would have predicted even 10 years ago that China would make such an offer. In theory, an FTA is a trade agreement. In practice, it represents a strategic calculation that the two parties have long-term interests in forging a closer partnership or that one party has an interest in strengthening the other party. China is acutely aware that should America decide to contain a rising China just as it contained the Soviet Union, it could use the Asean countries to encircle China. With strong economic ties to China, the Asean countries would not be disposed to join any containment policy against China.
When the Cold War ended in 1989 and the West looked confidently into the future, few would have dared to predict that in the following two decades, the West would underperform in defending its long-term geopolitical interests while Asia would experience a meteoric rise. A key question for Asia is whether India will match the record of China and Asean in geopolitical competence. The recent record of India has been promising. If this trend continues, Asia will continue to outperform the West in this area.