Martin Jacques - When China Rules the World

In the longer run any deepening relationship with China is likely to have an effect on the delicate racial balance in Malaysia between the Malay majority and the Chinese minority, who presently account for more than a quarter of the population. Not surprisingly, it is the Chinese minority who are primarily involved in trade with China, who fill the planes that fly between the two countries, and who benefit the most economically from the bilateral relationship. [923] [923] Ibid. As a result Malaysia, while seeking a closer relationship with China, is bound to remain at the same time somewhat ambivalent. (The problem of an economically powerful indigenous Chinese minority is by no means confined to Malaysia: a Chinese minority, though relatively smaller than that in Malaysia, also plays the dominant role in the private sectors of Thailand, Indonesia, Myanmar, Laos, Cambodia, Vietnam and the Philippines. [924] [924] Amy Chua, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (London: William Heinemann, 2003), pp. 25–44. )

The most dramatic example of the way in which China ’s rise has been transforming relations in the region, however, is South Korea. [925] [925] Jae Ho Chung, ‘ China ’s Ascendancy and the Korean Peninsula: From Interest Revaluation to Strategic Realignment?’, in Shambaugh, Power Shift , pp. 151-62; Kang, China Rising , Chapter 5. After the Second World War it became an intimate ally of the United States, a relationship which was cemented in the Korean War, with no small part of its subsequent economic success due to its position as an American vassal state during the Cold War. Yet over the last decade it has been moving closer to China both at a governmental and a popular level. [926] [926] Ibid., p. 151; Victor D. Cha, ‘Engaging China: The View from Korea ’, in Alastair Iain Johnston and Robert S. Ross, eds, Engaging China: the Management of an Emerging Power (London: Routledge, 1999), pp. 32–56. China is now easily the country’s largest trading partner and South Korean firms have invested heavily in the mainland, with China the largest destination for Korean foreign investment. [927] [927] Shambaugh, ‘Return to the Middle Kingdom?’, pp. 33- 4. Over half the students from East Asia studying for advanced degrees in China come from South Korea. [928] [928] South Korea sends more than 13,000 students a year to China, a figure equal to the total number of Koreans who studied in the US at the height of US- South Korean relations between 1953 and 1975; Kurlantzick, Charm Offensive , p. 117. More than 1 million South Koreans visited China in 2003, while 490,00 °Chinese made visits to South Korea. Each week, there are over 700 flights between the two countries. [929] [929] Shambaugh, ‘ China Engages Asia ’, p. 79. The crisis over North Korea and its nuclear weapons has also served to bring China and South Korea closer together, with the latter discovering that it had more in common with the cautious Chinese position of restraint than the more aggressive American approach under Bush. Indeed, China ’s handling of the crisis and its emergence as the key mediator with North Korea has enhanced its standing both with South Korea and in the region more widely. [930] [930] Chung, ‘ China ’s Ascendancy and the Korean Peninsula ’, pp. 156, 160-61. The fact that the United States has meanwhile strengthened its defence ties with Japan has further alienated South Korea, which views Japan with considerable enmity as a result of the latter’s conduct during its colonial occupation of the country. [931] [931] Ibid., p. 160.

South Korea’s attitude towards North Korea and China on the one hand and the United States on the other, however, remains the subject of major domestic argument: after the two liberal administrations of Kim Dae-jung and Roh Moo-hyun, which emphasized reconciliation with North Korea and sought closer relations with China, the election of conservative president Lee Myung-bak in 2008 marked a shift towards a tougher stance on North Korea and a closer relationship with the United States. There is also tension between China and South Korea over the precise ancestry of the ancient kingdom of Koguryo, which occupied territory in North Korea, South Korea and also over the Chinese border, and is claimed by both Korea and China as part of their history. In the longer run, however, it seems likely that South Korea will continue to move closer to China and further away from the United States, perhaps to the point where eventually the US-Korean alliance will be dissolved — but that is unlikely to happen within less than a decade, probably rather longer. [932] [932] Ibid., pp. 161-2. In the meantime, it is possible that the United States will eventually withdraw its troops from the Korean Peninsula if and when a solution is found to the present crisis. [933] [933] Jonathan D. Pollack, ‘The Transformation of the Asian Security Order: Assessing China’s Impact’, in Shambaugh, Power Shift , pp. 338- 9, 342. The rapprochement between China and South Korea is a powerful echo of earlier times when Korea was a close and important tributary state of China, a situation that lasted many centuries until China ’s defeat in the Sino-Japanese War. [934] [934] South Korea, however, is fiercely protective of its independence and identity, and took considerable offence over an interpretation by Chinese historians in 2003 that the ancient kingdom of Koguryo (37 BC-AD 668) had been part of China. Intense diplomatic activity in 2004 saw the dispute shelved; Shambaugh, ‘China Engages Asia’, p. 80.

Australia cannot be counted as part of East Asia, but belongs more properly to Asia-Pacific, which embraces that region together with the Pacific countries. One of the great geo-cultural anomalies is that a country that lies just to the south of Indonesia has an overwhelmingly white majority and has long been considered a Western country. Though historically part of the British Empire, ever since 1942 it has enjoyed an extremely close relationship with the United States, for most of that period being its closest and most loyal ally in the Asia-Pacific region. Over the last decade, however, China ’s growing economic power has exercised a mesmerizing effect on the island continent. By far the most important reason for this is China ’s voracious appetite for Australia ’s huge deposits of raw materials, especially iron ore. Largely as a result of Chinese demand, the Australian economy enjoyed uninterrupted growth for almost two decades until the financial meltdown and would appear to be in the process of decoupling its fortunes from the Western economy, especially the United States. [935] [935] Peter Smith and Richard McGregor, ‘Good Days: Australia Prospers from China ’s Resource Needs’, Financial Times , 2 April 2008. Also ‘A Ravenous Dragon’, a special report on China ’s quest for resources, The Economist , 15 March 2008, pp. 8–9. Australia is one of the relatively few countries in the world that has experienced a double benefit from China ’s rise: namely the falling price of manufactured goods and, until the global downturn, the rising price of commodities. If twentieth-century Australia was dominated by New South Wales and Victoria, and the rivalry between Sydney and Melbourne, this century will be characterized by the rise of the mining states, Western Australia and Queensland, with China the reason. China ’s interest in Australia ’s vast natural deposits is not confined to that of a customer; its role as an investor is becoming increasingly important, with the purchase of stakes in Australian mining firms, including, most dramatically so far, the proposal for the Chinese state-owned aluminium producer Chinalco to buy a large chunk of the debt-laden Anglo-Australian mining group Rio Tinto.