For Chinese neighbours, caution is the byword and trade the catchword - part two

Last week in On Line Opinion I began by examining China’s relationships with some of its geographical neighbours and with industry competitors. This week I continue.

Japan

China's extensive territorial waters are principally the seas of its western shores, washed by the marginal waters of the Pacific, from the northern-most Korea Bay, and Yellow Sea, down to the East China and South China Seas. Across the sea lies Japan with its importance as a long-term trader with China and having economic and cultural clout. But there is also a tainted historical connection between these countries due to the two World Wars last century and other altercations in the more distant past.

Although the culture of Japan has been localised it still owes a huge cultural debt to China (and Korea).

Two wars were waged by Japan against China, the 1894-95 war and the 1931-45 war, both intending to expand Japan to the mainland. The territory gained in the First Sino-Japanese War (Korea) and in the 1930s (Manchuria and Shanghai) was returned at the end of World War II. Consequently the necessity to trade is marred by sharp reminders of past problems and relations are constantly on edge. Politically, Korea and Japan are so close either one easily catches cold any time China sneezes.

To properly understand the motives underlying Japan’s policy towards China it is necessary to understand the spirit of liberalism that developed in Japan in the latter part of the 19th century. This spirit of liberalism genuinely lay behind the Japanese wish to help its neighbours in the Far East, such as China, which Japan believed was being exploited by western powers. And it was.

Later, this impulse to help the neighbouring countries was seized upon by the nationalists as an excuse to extend Japanese influence in the region. The entire exercise degenerated into empire building. This then alienated those forces willing Japan to play a strong role in the revitalisation of Asia. Today, on the street, there is a lack of trust between China and Japan.

China and Japan have been rivals for the past 1,000 years. For much of that time, China had the upper hand. From the mid-19th to the late 20th centuries China was in decline while Japan was rising. For the past 30 years, since Deng Xiaoping began changing China’s economy to market-led capitalism, China has been on the up again. Meanwhile Japan has economically confounded itself since the 1990s.

Despite the public altercations, there are many signs that East Asia’s two great powers are edging closer together. Very recently, China overtook America to become Japan’s biggest trade partner. Japan has been China’s biggest trading partner in three of the past four years. Besides trade, both countries have worked with neighbours to broaden and deepen the East Asian community. China and Japan, along with South Korea and Russia, have willingly collaborated in the US-led effort to persuade North Korea to stop its nuclear-weapons program.

Korea

From an early date Korean politics turned isolationist with a strong desire to maintain the country's independence. China, although treated with deference, was kept at arm's length, and relations with other neighbours were not encouraged. In the West, Korea came to be known as the “Hermit Kingdom”.

But the country was unable to stop encroachment by neighbours. The Japanese invaded in the 16th century, attempting to use Korea as a gateway to China, but they were soundly defeated and forced to retreat. Early in the 17th century the Manchus came in from the north, establishing relations between Korea and the Qing Dynasty. Western influences also came into play during the 17th and 18th centuries in the form of Roman Catholic missionaries.

North Korea's independence started to crumble in the 19th century, beginning with the signing of a treaty with Japan in February 1876 and further treaties with the then major powers as China continued to meddle in Korean affairs.

The Chinese influence was brought to a close by the Sino-Japanese War (1894-95) and an accompanying rebellion in Korea. Japan sent troops to aid the rebels against Chinese forces in Korea and declared Korea independent after the Chinese had been defeated. Then began a 50-year period of effective Japanese control over Korea.

Reforms introduced by Japan overhauled Korea's social system and the Confucian education and bureaucratic systems ceased. Traditional class distinctions were abolished, as was slavery, and the economy and legal affairs became more in tune with the times.

Korea was made a Japanese protectorate in 1905 and turned into a full colony of the growing Japanese empire in 1910. By the 1940s there were about 700,000 Japanese in Korea, mostly working in government service. While the Japanese policies resulted in substantial economic growth, Koreans became second-class citizens in their own land. China was engrossed in its own domestic problems and no longer exerted influence of any import.

China’s support for North Korea in the Korean War (in 1950 war finally erupted when the armies of North Korea made the initial offensive and occupied Seoul, driving the US forces all the way to Pusan) was for its familiar ideology rather than as a real friend. Also, it needed that buffer zone, primarily against Japan.

That Korean War involved Chinese forces supported by North Koreans with the latest Soviet equipment and supplies. Today, China and Russia no longer aid North Korea and trade openly with South Korea. Trade volume with China in 2004 reached a record US$1.4, up 35.4 per cent on 2003, according to the Korea International Trade Association. Thousands of Chinese soldiers guard the Yalu River to prevent crossings by starving North Koreans. North Korean soldiers no longer train for war. Their old aircraft and tanks sit idle from lack of fuel and spare parts.

Then there was the sentencing of Yang Bin, the “tulip tycoon” once thought to be the second-richest man in China. He was sentenced to 18 years in prison. Yang was Kim Jong Il's choice as overseer of a special economic zone to be set up on China's border. It is presumed China privately told Pyongyang not to employ Yang, but was ignored. The timing and publicising of his lengthy sentence could be interpreted as a meaningful signal to Pyongyang that it was not getting carte blanche affirmative nods from Beijing.

Korea has no natural resources which interest China, and Chinese military support for North Korea would cause a major war with powerful South Korea, the United States, and likely Japan.

Vietnam

The Sino-Vietnamese War, fought in 1979, was between the neighbouring countries of the People's Republic of China and Vietnam. After a brief incursion into northern Vietnam, Chinese troops withdrew, less than a month later, and both sides claimed victory.

The cause of that war was the Sino-Soviet split. Years previously, during the initial stages of the Vietnam War with France, Communist China and Vietnam had close ties because both distrusted the former French rulers of Vietnam.

With the death of Stalin, a change was provoked in the situation. Mao Zedong opposed Nikita Khrushchev, Stalin's successor, and criticised the Soviet Union's interpretation of Communism. This led to hostile relations, and eventually the Sino-Soviet split. From this period on Vietnam aligned with the Soviet Union, which continued to supply what was then North Vietnam during the war against the South, and its US, French and Australian supporters.

To China the Soviet-Vietnamese relationship was a negative development. China and Vietnam had a long history of conflict. This was particularly worrying given the possibility of a combined war with a powerful Vietnam in the south and the USSR in the north.

China's response was two-pronged: they started talks with the US in the late 1960s and early 1970s which contributed to a Chinese shift towards the US camp; also China set up a supported state in Cambodia under the control of Pol Pot's Khmer Rouge. China supported Cambodia partly for ideological reasons, as Khmer Rouge's philosophy was a variant of Maoism, and partly to keep Vietnam “boxed in” between China in the north and Cambodia in the west. Laos was already an ally of Vietnam. After the collapse of the Saigon government in 1975, Vietnam stabilised, and even prospered to some degree, while Cambodia descended into genocidal chaos.

In 1978 the Vietnamese invaded Cambodia and as expected, their experienced and well equipped troops had little difficulty overcoming the PRK forces. On January 7, 1979 Vietnamese-backed Cambodian forces seized Phnom Penh, ending the Khmer Rouge regime.

Early in 1979, around 120,000 troops of the Chinese People's Liberation Army crossed into northern Vietnam for a short-lived but bloody battle with the Vietnamese. The PLA went back home after reaching 30 miles inside Vietnam. That incursion has left strong negative memories in Vietnam.

Occasional skirmishes continued over the border during the 1980s and relations between the two neighbours were only improved in the early 1990s. The war also caused a forced migration of Vietnam's ethnic Chinese, who were discriminated against. They fled as “boat people”.

The legacy of the war is lasting, especially in Vietnam. Today Vietnam maintains one of the world's largest armies, which some attribute almost entirely to fear of China. Occasional skirmishes continued over the border during the 1980s, with over 1,000 people being killed. Relations between the two neighbours were only improved in the early 1990s.

In the People's Republic of China, the war has largely been forgotten. It is rarely mentioned in official circles and most history textbooks do not give it much prominence.

Islands of dispute

China is patient, as is shown by its policies bent on making real its claims to the diverse islands strategically and economically situated in the adjoining seas and which are also claimed by other nations. China seems intent on picking off each in turn, just as its took the Paracels from a divided Vietnam in the mid-70s, and used force against a diplomatically isolated Vietnam in 1979 and 1988 to curtail its presence in the Spratlys.

However, a much more friendly tone was notable in a similar Sino-Russian territorial concession of October 2004, when Russian President Vladimir Putin and Chinese President Hu Jintao jointly witnessed the signing of agreement defining the two countries' 4,300km border for the first time, including a few islands in the Amur, Ussuri and Argun rivers, which make up China's north-west border with Russia.

Nansha (Spratlys), Dongsha (Pratas), Xisha (Paracels) and another group of small islands - Zhongsha - are archipelagos in the South China Sea, all occupied by the Japanese navy during World War II.

Xisha is contested by PRC and Vietnam. Nansha is contested by PRC, Vietnam, Taiwan, Malaysia (partially) and the Philippines (partially) and comprises 104 islands, reefs, cays and banks. Xisha is about equidistant from Hainan Island and the coast of Vietnam.

But Dongsha - currently with ROC sea patrols - is closer to the mainland than to Taiwan. It is about 160km from Hong Kong but 240km from Kaohsiung.

China stands firm against Japan on the disputed Diaoyu-Senkaku Islands, and may even be encouraging South Korea to do likewise over the disputed Dokdo-Takeshima Islands.

Textiles - a hot topic

China has a number of other ill-defined boundaries; not just its border countries: these days everyone is a neighbour of everyone, and China, due to its size, affects the entire world. This can be seen in relation to its textiles industry.

Bangladesh is affected, a country far from China. And so is Mexico - both countries rely on cheap labour but that is not enough in today’s market. Both countries are in trading competition with China and both produce at the lower end of the market.

France too is making a lot of noise about the way their textiles industry is affected by China as well as that of Europe generally. The US is complaining in like manner as a fair-sized chunk of its employment is built around textiles and garments production.

China is surging ahead not just because of cheap labour but also because recent investment in its industries have brought the latest technology into play. The country is well placed to consolidate its entry into the world markets for quite some time. It seems unstoppable. It is seen as a juggernaut.

China’s boom-time is also affecting the world trade in raw materials as its importers reach out to every continent seeking everything imaginable, but particularly oil, ores, minerals, wood and foodstuffs.

Its citizens, on the other hand, are trickling out from its farthest flung border regions and building up communities of Han Chinese among ethnically and culturally quite different peoples. Not only that, countries far from China are receiving many immigrants as many Chinese actively seek a better life rather than engage in the competitive, dog-eat-dog lifestyle that is such a tough motivating force at home.

Conclusion

This is what can happen when the “big boys” get involved with their neighbours. This is why smaller nations baulk at offers of friendship treaties and the like, including interest-free loans which come with strings attached.

China’s neighbours would rather stay at arms length but given the economic might of China, looming ever larger on the world scale, those countries surrounding China on all sides cannot extricate themselves from its influence. It’s the proximity factor. It is what created the “ugly American” syndrome where an apparent “do gooder” went seriously astray and despite seeming good intentions, wreaked havoc on a wide scale. That havoc was largely covered up by the comprador bourgeoisie and their ilk.

While it is important to deal with China in good faith - those dealing with China must of course believe what is proposed by government officials - that belief must not be facile or superficial. Where there is trust a lot can be achieved but what is fed to the media at much publicised state visits to neighbouring countries hardly describes the real situations that exist.

Governments are well known for airing “catch-all” phrases and for not bringing up the tough trading points. Each nation has to fight for decent conditions of trade but it is also understood that the big powers by their very nature can bully and browbeat lesser nations into one-sided trade deals.

Fair play is rarely encountered in the business world simply because business relies on getting the best possible deal. The caveat emptor - buyer beware - motto comes to the fore. But the big powers are also a victim of their own size and that is why empires fall in the end. Until then, the lesser nations have to tread warily and negotiate with wisdom.

When it comes to China and the stance of its neighbours, caution is the byword, trade is the catchword.