Giving Concessions on Economic Interests in Exchange for Political Support from Small Countries
Keynote Speaker Li Xiangyang (Director of the Institute of Asia-Pacific Studies, Chinese Academy of Social Sciences):
I’d like to explore, from the perspective of regional economic cooperation, the strategic choices that a big country faces as it increases in power.
What are the common characteristics of regional cooperation strategies as a great country’s power increases? What are the factors that determine its success or failure? Here, I will analyze three cases. The first, France and Germany, are examples of the most successful case since World War II. They rose in power along with Europe’s increase in power. The second, Japan, is a case of failure. The third is a currently rising power, Brazil in South America.
In the 1970s, the motivation for European countries to rise through cooperation became more and more obvious. During the past two decades, it has become more and more evident that European integration has enabled France and Germany to become two of the major world powers. With the united European market and the establishment of the euro, France and Germany have reached their goal as a rising power. We have seen that, after the euro and the euro region were established, it was more and more obvious that the euro challenged the U.S. dollar for the top position as the world’s currency.
There are two important conditions for the success of European economic integration: First, the two big countries, France and Germany, reached a basic consensus on European integration and have led the entire process; second, they built up their authority as great powers during the process of European integration. That is, in the process of regional economic cooperation, they gained political support from small countries through economic concessions.
In contrast, Japan may be an example of failure. By the 1980s, Japan had become the world’s second largest economy, which was mentioned as “G2” with the U.S. In fact, it ended up
Why did Japan fail? The first reason is that Japan relied on the U.S.-Japan alliance as its basis for foreign strategy during the Cold War. From a political angle, Japan has not become a truly great power on its own. It depends on the U.S. to set many of its policies. The second reason is Japan’s export-oriented economic model. Following this model, Japan was unable to provide the world a large-enough export market, although it became the world’s second largest economy.
In the 1980s, Japan tried to promote East Asian cooperation, but because of political opposition from the U.S. and the economic constraint of its export-oriented model, it was fruitless. In addition, during the course of its promoting regional economic cooperation in Asia, Japan did not form a partnership with big countries in the region (such as China and South Korea). Thus, Asia did not establish a unified market. As a result, Japan could not rise through regional economic cooperation.
The third example is Brazil, which is presently a power on the rise. After the military regime lost power, Brazil focused on promoting regional economic cooperation in South America. In 1991, Brazil, Argentina, Paraguay, and Uruguay signed the “Treaty of Asuncion” and announced the establishment of MERCOSUR. On January 1, 1995, MERCOSUR and the customs union officially came into being. During the formation of MERCOSUR, the cooperation between Brazil and Argentina was critical. At one time in the 1970s, the two countries verged on a military clash because of their border dispute. However, it was the eventual cooperation between Brazil and Argentina that enabled South America’s four major powers to create a common market. This laid the foundation for Brazil to become a great country in South America.
Through the above three examples, we can see that a platform of regional economic cooperation is a common factor in the successful rise of great powers. First, under the peaceful international environment after World War II, the rise of a great country must follow a path of cooperation. Second, political independence is a necessary condition for the rise of a great country. Third, from the economic point of view, the most important condition for the rise of a great country is that its market size is large enough and its economic development model is led by domestic demand. Fourth, the great country must establish a great power’s sense and a great power’s strategy as it works for regional cooperation and its power increases. This is like the saying, “To obtain, first give in.” In other words, you need to make some economic concessions to gain political support from small countries. This is a necessary condition. Fifth, (the rising power needs to) find the right partners.
Consider Changing the “Non-Alliance” Strategy
Keynote Speaker Yan Xuetong (Dean of the Institute of Contemporary International Relations, Tsinghua University):
What kind of world situation does China face today? I think the world has entered the transition period from a one-polar structure to a two-polar structure. First, with its capability of self-correction, the U.S. leads with a wider gap in overall national strength over all other countries except China. Second, the rapid growth of China’s power means that the gap between China and all other countries, except the U.S., is growing. Third, the gap between the U.S. and China’s overall strength is narrowing instead of widening. These three points indicate that the world structure presents a trend toward two-polarization rather than multi-polarization.
The international situation is driven by two elements: strength and strategy. From the perspective of strategic relationships, the U.S. has the greatest number of friends and the most meaningful friendships. Compared to the U.S., Russia, Great Britain, France, India, Japan, and other big countries, China has the fewest number of friends and also the least valuable friendships.
China needs to solve this problem of the lack of friends and the poor quality of its friendships. How? In my opinion, first, it needs an ideological shift. It needs to recognize that a successful strategy needs to be adjusted over time instead of rigidly adhering to fixed principles. Only after recognizing that national strategies need to be adjusted can it become possible to implement these strategic adjustments. Second, the national strategy needs to shift from the center of economic development to the development of a righteous, fair, and harmonious society. Third, the acceleration in the development of national strength needs to transition from the economic priority to the balanced development of overall national elements. Fourth, consideration can be given to changing the diplomatic strategy from non-alliance to “all-weather strategic partnership.” (China should) establish as many all-weather strategic partnerships as possible and improve the quality of its friendships.
A military alliance is an old concept that people are not willing to accept, so I think we can use the concept of “all-weather strategic partnerships.” The relationship between China and Pakistan is an all-weather strategic partnership, which is the best friendship that we have. Compared to the U.S., China’s foreign relations are at a disadvantage. If we can follow the China-Pakistan relationship model and build more of such friendly relationships, to some extent, we will be ahead of the U.S. in the competition for getting friends.
Specifically regarding the current diplomatic principles, I think we need to transition from keeping a low profile to being a responsible big country. Particularly on international security issues, if China does not provide security protection to its neighboring countries, these countries may then seek security protection from the U.S., increasing pressure on China’s strategic security.
If China can develop relations with all of its neighboring countries to the level of the Shanghai Cooperation Organization (SCO), it is a preemptive action. The world recognizes that China’s building the SCO in the 1990s was a great diplomatic success. The establishment of the SCO challenged the intention of the U.S. to extend itself militarily into Central Asia. SCO destroyed the U.S. plan to include (those Central Asian countries) under its military influence and greatly improved the friendships between China and those countries.
In order to establish an SCO-style relationship with the countries surrounding China, I think that we have to provide security protection to those small neighboring countries and develop an all-weather strategic partnership with them. If we do not provide them with security protection, it will be impossible for our country to have more and higher-quality friends than the U.S. has.
 International Herald Leader, “China Can Compete with the U.S. for Friendly Countries,” May 31, 2011.