1 THE ASIAN RECENTRALIZATION AND THE CHINA

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THE ASIAN RECENTRALIZATION AND THE CHINA ROLE
GAO XIAN
Chinese Academy of Social Sciences
I.
Regional Cooperation of Asia Today
II.
The Decline of the “Flying Goose Model”
III.
The Role of China
In the world today, alongside with globalization, another worldwide trend is
regionalization. Asia is refocusing its effort in regional cooperation and have made
some important progress. This is a reflection of Asian recentralization.
Regionalization has different levels and dimensions, especially in the case of Asia.
Asia is a vast continent, we may approach the question in general as well as in subregions: East Asia, South-East Asia, North-East Asia, South Asia, and Central & West
Asia. There are various inter-regional, regional and sub-regional cooperations and
arrangements as well as bilateral and multilateral cooperations. China is a big country
whose rapid development has attracted attention of the world. Naturally, China has
close relations in many of those regional activities. In this paper, I’ll discuss and
analyze the question of Asian recentralization, or regional cooperation of Asia today,
and China’s role.
I. Regional Cooperation of Asia Today
( 1 ) East Asia and South-East Asia
The earliest major group of regional cooperation in Asia is ASEAN
(Association of South-East Asian Nations). It was established in 1967. In the earlier
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period, ASEAN’s main emphasis was in political and security area, and after the
Cold War it turned gradually to economic area. In 1992, ASEAN decided to establish
AFTA (ASEAN Free Trade Arrangement) in 15 years (later revised to 10 years).
China became a “partner of consultation” with ASEAN in 1992 and a “formal partner
of dialogue” with ASEAN in 1996. The Asian financial crisis of 1997 called attention
to Asian countries the urgent need for better and broader cooperation. In fact, the socalled 10+3 cooperation model (10 ASEAN countries plus China, Japan and South
Korea) was started at the end of 1997 at the ASEAN Summit Meeting when the
ASEAN countries asked for help from those 3 countries to deal with the financial
crisis. The agenda of that meeting included: the prospect of Asian development in the
21st century, the Asian financial crisis, and efforts of strengthening regional economic
ties, etc. It helped to widen the scope of this major group of regional cooperation in
Asia. China’s role of helping to stabilize the economic and financial situation of Asia
was welcome by Asian countries, its active part in the 10+3 and 10+1 (ASEAN
countries plus China, Japan and South Korea respectively) model was also helpful to
promote this mechanism of regional cooperation. The 10+3 Summit Meeting in
November 2001 was called under complicated and severe situation with the “9-11”
terrorist event and the worsening US economy, yet cooperation among the member
countries of ASEAN was further promoted with their collective effort. China entered
WTO in the same month of that year and one of the important outcomes at that
Meeting was: China and the ASEAN countries reached an unanimous agreement to
establish China-ASEAN Free Trade Area (CAFTA) in 10 years, and this process got
further impetus in 2002 with the Framework Agreement of Overall Economic
Cooperation between China and ASEAN. The final establishment of CAFTA will be
the birth of a biggest free trade area among the developing countries covering nearly 2
billion consumers, an aggregate GDP of over 2 trillion US dollars, and a total value of
foreign trade of 1.2 trillion US dollars. The proposal of CAFTA promoted the other
two 10+1 models, namely ASEAN + Japan and ASEAN + South Korea. In 2002, the
expert group of Japan and ASEAN submitted a report about the feasibility of a JapanASEAN Free Trade Area (JAFTA) and South Korea also expressed its interest to
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study the possibility of a SouthKorea-ASEAN Free Trade Area (KAFTA). These
parallel developments can be helpful to the prospect of a future 10+3 Free Trade
Area. Besides, ASEAN intended to start the 4th 10+1 model, that is ASEAN + India,
for the long-term prospect of economic integration of Southeast Asia and South Asia.
At the November 2001 Summit Meeting, the cooperation among China, South Korea
and Japan was promoted. A mechanism of formal negotiation and cooperation among
the leaders of those 3 nations was established, this is rather unprecedented in history.
The main function of this mechanism was to make common effort for the promotion
of cooperation in the whole East Asia region as well as cooperation among the 3
countries.
The financial cooperation in this region is an important move of the 10+3
model. Chiang Mai Initiative was adopted at the 10+3 meeting of financial ministers
in Chiang Mai of Thailand. It is a monetary swap arrangement to mitigate financial
risks. Under the existing 10+3 structure, it is mostly bilateral measures because all the
arrangements are based on bilateral negotiations. It requires that each country commit
a certain amount of currency to be used whenever the counterpart has financial
problems and needs to borrow money.
In 2002, a Declaration of Action for Related Parties in South China Sea was
signed by ASEAN countries and China with the main purpose of strengthening
mutual trust for peaceful solution of disputes in this area to maintain peace and
stability in South China Sea area. The measures of the Declaration include:
negotiations among defence and military officers, mutual information on military
manoeuvre, proper treatment to victims of sea perils and peaceful solution to possible
disputes. The parties also seek cooperation in the areas of marine environmental
protection, marine science research, safety of marine communication as well as strike
against international criminals and pirates, etc.
The River Mekong and River Lancang Sub-regional Economic Cooperation
was started in 1992 with the initial promotion of Asian Development Bank. This is an
international cooperation among China, the Laos, Thailand, Burma and Vietnam and
has made progress in the fields of highway, navigation, energy and trade.
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( 2 ) Central and West Asia
Shanghai Cooperation Organization was developed on the basis of The
Shanghai Five-Nation Conference which was established in 1996 by the Central
Asian countries: Kazakhstan, Kyrgyzstan, Tajikistan, and Russia and China. And in
2001, Uzbekistan joined the Shanghai Conference as the 6th member and the
Conference was re-named Shanghai Cooperation Organization. Its main emphasis in
the initial period was on security cooperation--- disarmament along the border areas
and military mutual trust, also, to guard against and combat “3 forces”, namely:
national splittism, religious extremism and international terrorism. Later, the
cooperation among the member countries was extended to economic & trade area as
well as cultural exchanges. It is also the earliest international organization to call for
joint effort in opposing to terrorist activities in Central Asia. In 2002, the Summit
Meeting of Shanghai Cooperation Organization in Sankt Peterburg made an important
progress by adopting the Charter of the Shanghai Cooperation Organization, this
marked the substantial consolidation of the organization and a reflection of the
common interest of the member countries in anti-terrorism, security cooperation,
economic-trade cooperation and cultural exchanges.
Another organization of cooperation in Central and West Asia is the
Dushanbe Group which includes Russia, India, Iran, Tajikistan, Uzbekistan and
Afganistan.
( 3 ) South Asia
Bangkok Agreement is an organization of regional cooperation established in
1975 in South Asia by India, Bangladesh, Sri Lanka, the Laos and South Korea. Its
purpose is to promote trade (including mutual tariff and non-tariff preferential
arrangements) and economic development among member countries. China joined
Bangkok Agreement and became the 6th member in 2001. This is an important
channel of regional cooperation between China and South Asia.
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( 4 ) North-East Asia
In North-East Asia, regional cooperation of different levels and dimensions is
proceeding fairly actively. In addition to various forums and conferences, some of the
major activities may call for our attention:
1, The Yellow Sea and Bohai Sea Economic Ring, i.e. the multilateral
economic cooperation in Yellow Sea and Bohai Sea Area participated by China,
Japan and North and South Korea.
2, The Sea of Japan Economic Ring, i.e. the multilateral economic cooperation
in the Sea of Japan Area participated by China, Mongolia, Russia, Japan, and North
and South Korea.
3, The international cooperation arrangement in Tumen River Delta promoted
by UNDP and agreements were signed in 1995 by China, Russia, Mongolia and North
and South Korea.
4, The China-SouthKorea-Japan Committee of Environmental Protection
Movement established in May 2001 in Seoul.
5, Railway transportation cooperation among Russia, North and South Korea
has proceeded since 2001. Mongolia, China and Japan also showed interest in this
activity which may leads to the construction of a North-East Asian Railway Network
in the future.
( 5 ) Pan-Asian Railway
Pan-Asian Railway Project was first proposed by Malaysian Premier at the
ASEAN Summit Meeting of 1995 and won support from other member countries. In
1996, the first meeting of the Task Force of Pan-Asian Railway was called in Kuala
Lumpur with the participation of representatives from Malaysia, Singapore,
Indonesia, China, the Laos, Burma, Thailand, Cambodia and Vietnam. In recent years,
various aspects of this project are moving forward and China has taken active part in
it. Hopefully, the successful realization of this project will be an important link for
China, South-East Asia and South Asia.
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( 6 ) Besides, there are organizations of inter-regional cooperation, the
important ones include:
Organization of Asian-Pacific Economic Cooperation (APEC) is the biggest
economic cooperation organization in Asian and Pacific area,. It was established in
1989, and China joined APEC in 1991 at the Seoul Conference.. APEC has various
activities, including APEC summit meetings, minister level meetings, specialized
meetings of high officers, various commissions and their task forces. China has taken
active part in all those activities and successfully hosted the 2001 APEC Summit
Meeting in Shanghai.
Euro-Asian Conference called its first meeting in 1996 in Bangkok. As a
founding member, China actively participated in its related activities for the
promotion of inter-regional cooperation and exchange between Asia and Europe.
II. The Decline of the “Flying Goose Model”
After WWII, Asia has been under the influence of US domination and many of
the regional activities were controlled by or orientated towards the US. Then,
following the rapid growth of Japanese economy in the second half of 20th century, a
regional factor began to play an important role, namely the so-called “flying goose
model”.
The “flying goose model” is an international development model raised and
developed by Japanese economists to explain the pattern of development, division of
labor and transfer of industrial structure in East Asia, which was widely accepted by
economic communities in East Asia and in the world. In this Model, Japan acted as
the goose head who was at the top of economic, financial and technological
development and who promoted the regional economic growth through capital,
technological and industrial transfer; the “four Asian Dragons”(South Korea,
Singapore, Hong Kong and Taiwan) were the goose wings who received the capital,
technological and industrial transfer from Japan to develop capital/ technological-
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intensive industries and, in turn, transferred part of their labor-intensive industries to
the goose tail , i.e. the “four Asian Tigers” (Thailand, Malaysia, Philippines and
Indonesia). This was the general picture of the Model. In the period of 70s-80s of the
20th century, Japanese economic development enjoyed its golden days. With the
mechanism of this Model, the East Asian countries and economies (mainly the socalled Dragons and Tigers) absorbed big amount of capital, technology and industries
transferred from Japan, made big effort in developing export-oriented economy and
achieved unprecedented high growth. This was the positive role in that period of
history played by the “flying goose model”. But this Model had its limitations in
theory as well as in practice.
The process of level-by-level transfer and vertical international division of
labor practiced by this Model would eventually result in dependence of the countries
and economies in the region to the advanced goose head—Japan. The economic
development of the goose wing and goose tail would be always under the influence
and conditioned by the economic policies of the goose head. They may
lose
autonomy and independence in their domestic development and structural adjustment.
Once the external conditions for their economic development changed, they would be
difficult to make due adjustment. What is more, under this pattern of international
development, the fundamental position of th countries and economies in different
levels would be hard to change.
Since the 1990s, the “flying goose model” began to decline, this was due to
several factors.
Firstly, the effect of Japan as goose head was diminishing. Since the collapse
of the bubble economy of Japan in 1991, Japanese economy suffered the most severe
recession after WWII and it lasted for 10 years. What was more, the Asian financial
crisis of 1997 dealt severe blow to Japan’s direct investment in East Asia. And Japan
let its Yen depreciated drastically without restraint which raised international
competitiveness of Japanese goods while worsened the difficulties of Asian countries,
and the Southeast Asian countries suffered the most. All those lowered
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trustworthiness of Japan among Asian countries and caused the decline of the effect
of Japan as goose head in the regional economy.
Secondly, the growing position of China in regional economic development of
Asia has posed a challenge to the “flying goose model”. In the past, China was
excluded in the “flying goose model”. Later, with reform and open policy, Chinese
economy gradually joined the system of international division of labor and
participated as part of the goose tail in the Model. Especially since 1990s, the rapid
and sustained growth of Chinese economy has changed this traditional Model and
China has becoming another big “engine” for regional economic development.
Thirdly, after the Asian financial crisis, some East and Southeast Asian
countries begin to change their over-dependence to “flying goose model” and to seek
for new models for regional economic cooperation. At the same time, as Japanese
economy remains in doldrums, they have lost their hope for Japan to bring them out
of economic difficulty. This greatly lessened the effect and influence of the traditional
“flying goose model” and has been replaced by the 10 + 3 Model.
The mechanism of the 10 + 3 Model is the participation of the four economic
parties on an equal basis in regional cooperation for the purpose of realizing regional
free trade and free investment and there is no single leading party of domination in
this Model. This mechanism is in accordance with the trend of multi-polarization of
economic development in Asia.
III. The Role of China
Now we come to the question of China’s role in regional cooperation of Asia.
( 1 ) As we can see from the previous parts, China has paid much attention,
taken active part and made big effort in regional cooperation in Asia. There are
important reasons.
China is a big country in Asia and in the world. It has fairly complicated geopolitical as well as geo-economic environment: 1, China is a country with as many as
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29 neighbouring countries, and 15 of them has common borders with China. 2, China
is a country with long history and there are inevitable remaining impacts of historical
problems with her neighbours. 3, there is big diversity among the neighbours,
including: different political systems, different levels of development, different
national origins, different cultures, and different religions. 4, There are points of
intersection of big-nation interests in the surrounding area of China. All those call for
China’s redoubled attention to her relations with neighbouring countries.
Politically, most of the neighbours are developing countries and they have
much consensus with China on major international and regional issues. Many of them
follow friendly policies towards China and always have mutual supports and
coordination with China.
Economically, the neighbouring countries are important partners for China’s
international cooperation. China’s trade with neighbouring countries and areas
constitutes over 60% of her total foreign trade, investments from them constitutes
over 70% of her foreign capital. The development of China will benefit her
neighbours with more opportunities and bigger markets, and the prosperity of the
neighbours will in turn benefit China too. The inter-dependence between China and
her neighbours is increasing more and more.
On security aspects, the neighbouring area is China’s direct external protective
screen for maintaining social stability and national harmony. A peaceful and
stabililized neighbouring area is an important condition for China’s economic
construction and development.
( 2 ) China is playing an active role but will not seek a dominating role in the
process of Asian recentralization or regional cooperation.
China is a big country with long history. The ideal world of the Chinese
people is the teaching of the great ancient sage Confucius---“A World of Great
Harmony” and “All Under Heaven Are of One Family”. China hopes to join with
peoples of the world to promote the cause of world peace and co-development among
nations. This is in the highest interest of all nations of the world, including China. In
the present world, we shall make more effort to promote polarization of the world and
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endeavour for harmonious co-existence of various forces in order to maintain stability
of the whole world. We advocate democratization of international relations and
diversity of development models. Various civilizations, various social systems and
various development models should respect each other, learn from each other through
competition, achieve co-development by seeking common ground while reserving
differences. All national affairs should be decided by people of the related nation
itself, and all international affairs should be solved through negotiation among related
nations on equal standing. China strongly opposes hegemonism and power politics.
China has declared repeatedly that she’ll never seek hegemony and never be a superpower. These are the guiding principles underlying China’s attitude towards regional
cooperation. China seeks for mutual support, mutual benefit, co-development and
common prosperity for all partners of cooperation. That is why China is playing an
active role but will not seek a dominating role in Asia’s recentralization.
( 3 )
China opposes “Cold War Thinking” and “Bloc Politics” and has
developed a New Approach of Security in the 1990s. This new approach has several
aspects:
The relations between nations will be established on the basis of the Five
Principles of Peaceful Coexistence, namely: mutual respect for territorial integrity and
sovereignty, mutual non-aggression, non-interference in each other’s internal affairs,
equality and mutual benefit, and peaceful co-existence. This is the guiding principle
of the New Approach of Security and its core is “mutual trust, mutual benefit,
equality, and coordination”.
In economic areas, all countries will strengthen cooperation and mutual
benefit, open to each other, eliminate unequal and discriminating policies, gradually
narrow gaps of development among nations, and seek for common prosperity. This is
the economic basis for regional as well as global security.
All countries will increase their mutual understanding and mutual trust,
commit to solve differences and conflicts among nations through peaceful means.
This is guarantee for international security and peace.. Security cooperation and
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dialogue among nations should not point to a third party and should not be detrimental
to the security interest of other nation.
In fact, the Shanghai Cooperation Organization is a new paradigm of regional
cooperation along this idea of New Approach of Security.
These main points are the foundation for China’s activities and role in Asian
recentralization and regional cooperation.
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