Survey China: Price & Prejudice

Pride and prejudice

Mar 23rd 2006
From The Economist print edition

If in doubt about your place in the world, fall back on nationalism

CHINA'S leaders bridle at the suggestion that the country's growth will be anything other than benign, or that its rise will challenge the world's status quo. But history could prove them wrong. The rapid rise of great powers has a habit of causing bloody confrontation. And when such a power harbours resentment at its past humiliation by others, covets long-lost territories and secretly and rapidly upgrades its military potential, it would seem reasonable for observers to worry.

To Chinese officials, the Olympic Games in 2008 will symbolise the country's re-emergence on the world stage after more than 150 years of humiliation and isolation by western powers. Many Chinese saw the narrow failure of their bid to host the games in 2000 as the result of malicious western attempts to keep their country in check. When its second attempt succeeded by a comfortable margin, it was seen as a belated recognition by the West that China should be treated as a respectable country. This would be its chance to show itself off as a proud, strong nation.


Party leaders hope that national pride will help the country to remain stable and united amid turbulent social and economic change. By playing to the public's patriotic sentiments, the party also hopes to strengthen its claim to legitimacy. This has been an important motive behind China' s recent push to become a space power, with the launch of two manned orbital craft in 2003 and 2005. It is possible that later this year China will launch an unmanned spacecraft to orbit the moon, a step towards an eventual moon landing by a Chinese astronaut.

This strategy of encouraging national pride also carries some risks for the party, particularly if the public feels that the government is not being nationalist enough. It means that whatever action China's leaders take on sensitive issues such as Japan, Taiwan and America will have “very broad implications for domestic politics”, as Christopher Hughes of the London School of Economics argues in a book just published. The dangers this strategy could pose for international security are even more apparent.

Ironically, the past few years of China's rapid economic rise and integration with the outside world have also brought a rising number of angry public protests over nationalist issues. In the two biggest and most unruly incidents—demonstrations against America and Britain in 1999 following the bombing of the Chinese embassy in Belgrade, and anti-Japanese protests in April last year—the government at first appeared to be condoning if not encouraging the outbursts. Those who argued that giving China the Olympics would help tame such nationalism have been proved wrong.

Nationalist tit for tat
Untamed, that Chinese nationalism risks starting a vicious cycle as nationalists elsewhere respond. The Japanese grumble about Chinese criticism of their wartime record which they regard as politically motivated. Unwilling to be seen as capitulating to China, Japan's prime minister, Junichiro Koizumi, continues his controversial visits to the Yasukuni Shrine where Japan's wartime history is celebrated. In Taiwan, a new sense of identity is emerging that emphasises the island's cultural and historical distinctness from China. The more China attacks this trend, the more Taiwanese nationalists shout back.

The growth of nationalist sentiment in China has coincided with a double-digit increase in China's military spending every year since the mid-1990s. An uneasy Japan has been strengthening its security ties with America. It has also been manoeuvring—with some success—to keep China from turning the Association for South-East Asian Nations into the nucleus of a China-dominated grouping of East Asian countries. In north-east Asia, the two countries have territorial disputes that inflame nationalist passions on both sides.

Fortunately both China and Japan realise that they cannot afford to let these quarrels escalate. Economic interdependence between the two countries has grown by leaps and bounds in recent years. China (with Hong Kong) has helped to lift Japan out of stagnation, becoming its biggest trading partner in 2004. Last year, by Japan's reckoning, the total volume of trade between the two countries was nearly $190 billion. Japan accounted for 11% of foreign direct investment in China in the first nine months of last year, making it the biggest investor after Hong Kong. In October last year, Mr Koizumi appointed an official widely seen as “pro-China”, Toshihiro Nikai, as his trade minister.

But China has been refusing to talk to Mr Koizumi since his last visit to the Yasukuni shrine in October. And even when China is talking, the frosty state of relations makes it difficult for the two countries to establish mechanisms for dealing with sudden crises in their relationship. For several hours during last year's anti-Japanese demonstrations in Beijing, nervous Japanese diplomats were unable to reach China's foreign ministry by phone.

If a Japanese vessel were to collide with a Chinese one in a disputed area of the East China Sea, causing Chinese casualties, it is easy to imagine an outbreak of violent protests in China that could rapidly escalate. Such risks could grow as Chinese navy vessels become more active in the area. A Chinese submarine was spotted near Okinawa in 2004, and last year China briefly deployed warships near its controversial gas-drilling rigs in the East China Sea. Some Japanese diplomats fret that China's Communist Party may not have full control over the military.

AP

A warm welcome from Hu (right) to SoongSo far, however, both China and Japan, while verbally pandering to nationalists in their respective countries, have tried to avoid going beyond diplomatic skirmishing. Having let last April's protests run for a few days, the Chinese authorities decided to rein them in, apparently concerned about the risk of a serious breakdown in relations with Japan. In recent weeks China's criticism of Japan has become more muted. Perhaps the Chinese are waiting to see what happens when Mr Koizumi steps down in September.

One problem for China is that its most active nationalists are drawn from the very middle class upon whose support the party depends. Peter Gries of the University of Colorado says that many of those who took part in last year's protests were “savvy urban yuppies” rather than the losers from economic reform. Mr Gries describes them as “computer-literate cyber-nationalists”, well educated and exposed to world politics. The rapid spread of internet technology in China in recent years has provided new forums for nationalists to air their views. Although China's internet censors closely monitor debate on internal political issues, they give diatribes against Japan a much freer rein.

China may feel that it can afford to give the public leeway to rail against Japan because military conflict with that country is highly unlikely. The two other big preoccupations of Chinese nationalists—Taiwan and its military backer, America—are in a different category, and the government has tried much harder to prevent public sentiment from getting out of hand.

Let's be pragmatic
Indeed, in the past few months China's handling of Taiwan has shifted direction to become remarkably pragmatic. China has moved swiftly to stem a torrent of protest from Taiwan and the West against a new law adopted in March 2005 that authorised the use of force against the island should it ever try to secede from China. President Hu hosted unprecedented visits by Taiwan's opposition leaders which did much to reassure the Taiwanese public. James Soong, leader of the opposition People First Party, says that during his stay Chinese leaders officially accepted, “for the first time in history”, that Taiwan and the mainland were “equal entities”.

Kenneth Lieberthal, a former National Security Council adviser, says President Hu has apparently decided that unification with Taiwan is simply not feasible during his term of office. Although China continues to concentrate its military modernisation efforts on improving its ability to fight Taiwan and American forces that might try to protect the island, Taiwan has become much less of a sore point between China and America than it was.

Events in Taiwan in the next couple of years could make China and America more jittery again. In December next year Taiwan is due to hold elections for its legislature and in March 2008 for the presidency. Both China and America are clearly worried that President Chen will use his remaining two years in office to push for confirmation of Taiwan's independent identity. With his popularity at an all-time low, partly because of corruption cases within his party, Mr Chen may well feel inclined to use Taiwanese nationalism to shore up his popularity at home. In the past, Mr Chen has successfully exploited this sentiment to undermine his opponents, who favour closer ties, though not reunification, with the mainland.

Mr Chen has already unsettled the Chinese and Americans this year by scrapping the National Unification Council, a body that existed in name only to help Taiwan maintain the fiction that it has not abandoned the idea of rejoining China. He has also revived talk of organising a referendum, in 2007, on a new constitution for the island. China objects strenuously to this as a display of sovereign power that Taiwan in fact lacks. America has tartly reminded Mr Chen of his promises not to upset the status quo. Taiwan officials say it is China that should be blamed for having passed the anti-secession law.

The pragmatism of China's leaders could also face new challenges in Hong Kong, which in March next year will hold elections for the post of chief executive and in 2008 for the legislature. China has ruled out universal suffrage for either, and is resisting demands for a timetable to be set for introducing it.

But China has reason to feel relatively confident. In Taiwan, President Chen would need three-quarters of the members of parliament to approve any constitutional change. Given the opposition's domination of the parliament, that would make it extremely difficult for him to get enough votes for anything that would seriously anger China. And China is happy with indications that Ma Ying-jeou, the charismatic mayor of Taipei and chairman of the opposition Kuomintang party, is the likely front-runner to succeed President Chen. Mr Ma, though not keen on reunification as long as China remains a one-party dictatorship, is no advocate of independence. In Hong Kong, meanwhile, pro-democracy activists have shown no interest in street fights with the authorities.

The relationship that will dominate all others is that between China and America. In the run-up to America's presidential elections in 2008, China's rise is likely to become ever more contentious. America's trade deficit with China, which at $200 billion in 2005 was its biggest with any country, will probably remain very large, particularly in the likely event of China resisting American demands for a substantial revaluation of its currency. Workers in America's industrial mid-west already blame China for the loss of manufacturing jobs. And news that China last year became a net exporter of motor vehicles for the first time might cause further unease.

David Lampton, an American scholar, has argued that the past few years have seen a “marked paradigm shift” in American thinking about China that “threatens to substitute one flawed framework (a “weak China”) with another (a “China on steroids”). This was evident in America's horror at last year's bid by China National Offshore Oil Corporation (CNOOC), a state-owned company, for Unocal, a California-based oil and gas explorer. It would have been the biggest takeover of a foreign company by a Chinese firm, but CNOOC was forced to withdraw by wildly exaggerated fears in America of a Chinese stranglehold on vital resources.

Americans have been watching with disquiet as China has cosied up to pariah governments in Venezuela, Zimbabwe, Sudan and Iran to feed its growing hunger for resources. In Iran in particular, China's efforts to keep its economy fuelled could put it in conflict with what America regards as a vital strategic interest: keeping the Arab world free of nuclear weapons. Over the past 13 years, China has moved from being a net exporter of oil to become the world's second-biggest importer, relying on foreign sources for 40% of its demand. So Iran, which supplies 11% of China's oil imports, might need special consideration.

But China's foot-dragging on Iran could be seen as evidence of the same kind of pragmatism that has dominated the country's relationship with America for most of the period since the end of the cold war. China has advocated persisting with diplomatic efforts. Yet in January, when Russia signalled its willingness to allow Iran's nuclear programme to be referred to the United Nations Security Council, China did not attempt to block the move. China is loth to interfere in other countries' affairs because it fears that others might use such a move to justify interfering in China's. It would therefore be remarkable if the country were to vote in favour of sanctions. But it would be no less remarkable if it were to veto sanctions on its own.

China's military build-up in the next few years will alarm the Americans, particularly as it becomes clear that its forces would be able to overwhelm Taiwan and inflict enormous losses on the Americans if they chose to intervene. But there are very good reasons why China would be highly unlikely to attack Taiwan, even if it had the capability to do so. Such an attack would devastate China's relationship with the West as well as with other Asian countries, and could cripple the economic growth that the party regards as so vital. The trouble is that planners in the Pentagon cannot afford to bet on it.