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General Wedemeyer portrait (Albert_C._Wedemeyer)

Modern Chinese History V: The Chinese Civil War 1945-49

 

Introduction

Hiroshima after the nuclear bomb

On August 6 and August 9 the Americans dropped atomic bombs on Hiroshima and Nagasaki. By August 14 the Japanese surrendered, bringing to an abrupt end the 1937-1945 Sino-Japanese War and WWII into which the Sino-Japanese War had been subsumed.  The Kuomintang (KMT) – also called the Nationalist Party – led by Chiang Kai-Shek was exhausted by the war effort. Inflation, poor management, harsh conscription policies and battle fatigue had also seriously undermined civilian support for his regime.

In contrast, the Chinese Communist Party (CCP) came out of the war stronger than before. After having been almost wiped out by the Long March in 1935, the communists in Yan’an led by Mao Zedong now controlled 1 million square kilometers of land populated by nearly 100 million people. The CCP also had almost a million party members and a million Red Army soldiers. As importantly, the communists had developed a reputation for honesty, for showing real concern for the Chinese people and for efficient governance.

General Wedemeyer, commander-in-chief of the American forces in the China-Burma-India theatre, warned Washington in 1945 that if peace came swiftly to China, there would be extensive disorder as the KMT had no national reconstruction plan. Moreover, Wedemeyer also told Washington that KMT authority would continue to be seriously challenged by growing communist strength, by a disillusioned populace, by chronic economic mismanagement and by continued alliances with self-interested warlords.

The communists had significantly increased CCP membership and support by the end of the war

After WWII ended, the US tried to shore up KMT strength by air-lifting KMT troops into position to accept Japanese surrender to prevent the CCP from taking command in as many areas as possible. The US also continued to provide Chiang Kai-Shek’s government with military and financial aid. US envoys such as General George Marshall also worked to negotiate a power-sharing truce between the KMT and Communists in the form of a democratic-oriented government with an elective assembly. Yet, as Marshall mediated to create real power sharing between the various Chinese political parties, China moved closer to all-out Civil War. By January 1947, the US disbanded its mediation liaisons and withdrew from involvement in China, much to the shock of Chiang Kai-shek who believed that the US would never abandon its country to communism. Chiang Kai-shek failed to believe that the US would be willing to replace China with Japan as the keystone of its East Asian policy.

In the early stages of the Civil War, the KMT seemed to have all the advantages. Not only did it out number the communists 2 ½-1 in terms of men and equipment, but it was also receiving military and financial support from the US. An early string of KMT victories between July and December 1946 seemed to bear this belief out. Indeed, in March 1947 the KMT  captured the Communist wartime base in Yan’an. However, abuse of power, crushing inflation, and poor military strategy soon turned the KMT advantage.

By mid-1947, the KMT military machine began to founder, while the Communist army continued to expand in numbers. Chiang Kai-shek’s initial string of victories soon turned to losses. Between September 1948 and January 1949 the KMT lost 1.5 million men to death, injury, desertion and surrender.  Faced with such overwhelming troop losses, the KMT defence collapsed in mid-1949. On October 1, 1949 Mao declared the founding of the People’s Republic of China. Meanwhile what remained of the KMT government retreated to Taiwan, taking with them huge quantities of dynastic art and most of the nation’s supply of gold and silver.

The End of the Sino-Japanese War

Americans airlifting troops in China

After the Japanese defeat, the US supported Chiang Kai-shek by airlifting close to a half million of Chiang Kai-shek’s troops to key cities in order to accept Japanese surrender in advance of the Communists. It also placed 50,000 American marines in the key ports and communication centers to await the arrival KMT troops. The scale of the surrender was immense and took months. Over 1.25 million Japanese soldiers, 900,000 and 1.75 million Japanese civilians had to be disarmed and transported from the country.

For its part, the CCP ordered its troops to seize as many Japanese-occupied towns, cities and communication centers as possible, receiving their surrender and their military supplies. Communists efforts were not supported by the Americans and were strongly opposed by the KMT. Indeed, often the Japanese were instructed to continue to fight the CCP until the KMT could move into position. In Manchuria, Chiang Kai-shek asked Stalin to hold the province until the KMT could assume control. Yet, the CCP were well positioned geographically in the north, especially for Manchuria. Not only was Manchuria relatively close to their northern Shaanxi base, but it also had an active underground communist movement that rapidly resurfaced. Despite being ravaged by years of fighting, Manchuria remained a good prize. It was rich in resources, and had a developed industrial base, large cities, good food stores and a hilly and forested topography that would allow protection for communist guerrilla forces.

Chinese communist troops head north to Manchuria

On August 11, 1945, CCP leader Lin Biao led a 100,000 man army along the Beijing-Mukden Railway into Manchuria. They joined up with 150,000 People’s Self-Defense fighters organized by the re-surfacing Manchurian communists. Many of the People’s Self-Defense fighters were either native Manchurian or Koreans who had fled during the Japanese invasion of their country. In the weeks after the Japanese surrender, the CCP extended their territory from 116 to 175 counties. The communists fighters also successfully secured the industrial city of Harbin with a population of almost 800,000 people, giving it its first urban base since the Northern Expedition.

Their efforts were helped by the Soviets who – when not busy stripping Manchuria of food, gold and equipment – allowed the communists to take hold of large arms and ammunition stores. Yet the Soviets did not set up the CCP to takeover Manchuria. Instead, Stalin insisted that the communists negotiate with the KMT to form a coalition government. Despite Stalin’s ideological proclamations of international communist revolutions, Stalin’s real-politic objective was to keep China weak so it could be used as a platform to expand Russian influence in East Asia.

KMT troops significantly outnumbered the Red Army at the start of the war

Despite CCP success in Manchuria, overall the KMT was better positioned by the time the dust settled after the Japanese surrender. The government had retaken control of almost all important cities in communication centers in central, east and southern China. The KMT had a men and materials superiority of 2 ½ – 1, the support of the Sino-Soviet Treaty of Friendship and Alliance, as well as the backing of the US – the most powerful country in the world. Because of what he believed to be his overwhelming advantages and because Chiang was confident he could now destroy the communists once and for all, Chiang made the ill-fated decision to send almost a half million troops of his best troops to Manchuria despite American advice that he should first consolidate his control south of the Great Wall.

Communists in Manchuria

Minakai Dept. store of Hsinking Manchukuo

The communists put high taxes on luxury goods such as those sold in the Minakai Department store located in Hsingking, the Japanese capital of Manchukuo

The CCP’s control of industrial city of Harbin marked the first time since the beginning of the Sino-Japanese War in 1937 that the Communists had a large base in an urban environment. Their experiences there were to prove important once the Civil War began to expand communist power southward. To facilitate the task of urban government, the CCP divided the city into six districts which were further divided into 58 street governments each overseeing a population of approximately 14,000 citizens. Once in control, the CCP launched registration campaigns, arrested thieves and other “destructive elements”, organized citizens into self-policing organizations, and employed urban workers to assist the PLA in transporting goods and wounded soldiers from the various fronts.

The CCP also worked conscientiously to restore order to the economy. They kept prices low for fuel, grain and cooking oil, but instituted more punitive taxes for tobacco, cosmetics and luxury goods. They also taxed businesses. Additionally, they launched a so-called Voluntary Contribution Campaign; using mass media, public meetings and coercion, the CCP succeeded in raising an additional 200 million yuan to fund its fighting. Once again, CCP economic and government policies contrasted sharply with KMT practices in Manchuria.

The KMT formed alliances with hated Japanese collaborators or had their cronies displace local officials. The new KMT leaders would then often use their new posts for self-enrichment. Rocketing military expenses and economic mismanagement again forced the KMT to print money, fueling inflation, despite the KMT’s efforts to isolate Manchuria from China’s national surging inflation by introducing its own Manchurian currency.

KMT’s failure to meet Governing Challenges After the War

KMT in-fighting over the return of property confiscated by the Japanese such as the Manchurian Coal Company hurt economic recovery

Despite American assistance at the beginning of the war, the KMT quickly started to fritter away their authority. To begin with, the KMT were militarily, financially and spiritually exhausted. This exhaustion gave them little bandwidth to tackle the corruption and economic mismanagement that had plagued the party throughout its time in power. They also undermined their popular support by forming alliances with dodgy warlords, including many known Japanese collaborators. Even when anti-Japanese collaborator regulations were implemented in September 1946, loopholes allowed many to escape punishment and receive appointments, much to the outrage of the Chinese public. Abuse of power and scandal became widespread, often relating to the return of property confiscated by the Japanese during their Chinese occupation. Disputes forced factories and business premises to remain closed longer than had been promised, throwing people out of work and further weakening local economies already ravaged by war and inflation. Unemployment rose. A reduction in defense spending and some demobilization increased unemployment figures further.

Equally corrosive was Chiang Kai-shek’s poor management of the national currency and the money supply. During the war, exchange rates and even currency varied by region. Many of the Japanese-puppet regimes had issued their own money. After the war, currency speculation became rife.

Excessive KMT printing of money led to economic chaos and high inflation

Making matters worse was the persistent budget deficit. This meant that the KMT were constantly short of money. The knee-jerk response to this shortage was to print banknotes which resulted in catastrophic inflation. Wholesale prices, for instance, increased 30% per month from 1945-1948. Anyone on the fixed salary was hit hard. Soaring inflation destroyed the livelihood of hundreds of millions of Chinese. Industrial workers, for instance, had their purchasing power sharply eroded. They began to strike in protest, encouraged by underground Communists who again began to infiltrate workers’ unions. The KMT tried hard to negotiate with workers in order to avoid more conflict, offering, for instance, wage rates based on 1936 pay scales which were then multiplied by a current cost of living index; this, in turn, displeased employers who felt that the higher wages eroded Chinese competitiveness.

When the new wage scheme proved ineffective, the KMT instituted price and wage ceilings, setting prices for rice, flour, cotton, cloth, fuel, salt, sugar and edible oil and locking wages into the January 1947 cost of living index. These controls had some effect through March 1947, but hoarding, inadequate enforcement and distribution problems eventually caused inflation to return. By May 1947, the price and wage ceilings were abandoned. Even a July 1947 American plan to distribute food and fuel at low prices through the Central Bank of China did little to halt inflation’s rise. In a last-ditch and ultimately unsuccessful attempt, the KMT issued ration cards for staple foods to urban citizens.

Facing an increasingly serious crisis which was quickly wearing away their power base, in July 1948 Chiang Kai-shek and his financial advisor T.V. Soong decided to introduce a gold yuan, abandoning its current currency. Soong and his other financial advisors warned Chiang Kai-shek that the currency would not hold unless the deficit was dramatically reduced, which in turn would mean that military spending would have to be cut. They had also hoped to support the new currency with loans from the US which they were unable to secure after Truman was re-elected in 1948.

Demoralized KMT troops had little desire to fight their own countrymen

In order to increase confidence in the gold yuan, the KMT committed to printing a maximum of 2 billion yuan worth of notes. To support the currency further, wage and price increases were banned as were strikes and demonstrations. Sales taxes were increased to raise more revenue. All gold and silver bullion held by Chinese citizens were to be turned over to the banks (although many were reluctant to comply.) Yet, despite the KMT’s efforts, the gold yuan also failed. By October 1948 inflation returned, along with shortages of food, goods and medical supplies. Barter began to flourish in the absence of functioning monetary system.

KMT soldiers too were battle-weary. Patriotism and the ever-growing prospect of victory gave the KMT troops the energy they needed to fight to the end of the Sino-Japanese war. Relieved, proud, the often-gang pressed troops now wanted to return home for a much looked-for rest. They had no desire to launch into a Civil War to fight against their own people. They especially had no desire to be sent to Manchuria where the local population and the terrain was unfriendly and unfamiliar.

Failed Marshall Mission

Ambassador Hurley encouraged a reluctant Mao to negotiate with the KMT 1945

Despite the KMT’s economic and military challenges, Chiang Kai-shek proceeded with plans to destroy the communists once and for all while the Americans worked actively to create a KMT-CCP power-sharing truce that would avoid civil war and that would install some form of a democratic-oriented government which shared power through an elective assembly. In August 1945, Ambassador Hurley accompanied a reluctant Mao Zedong from Yan’an to Chongqing to negotiate with Chiang Kai-shek. Despite the KMT’s apparent strength, Mao Zedong was confident that the CCP would eventually control a large area north of lower Yangtze and Huai Rivers, yet he also believed that securing the territory would take time.

Given that he was outnumbered both in men and arms, Mao adopted a flexible and constructive negotiating position during the talks in order to buy the communists time. These initial talks lasted until October 10 and resulted in the publication of what seemed to be a collaborative set of tenets including the need for: political democracy, freedom of religion, speech, assembly, publication and person, an integrated military, and equal legal status for all political parties. A People’s Congress or National Assembly was to be called.

Yet undermining these public agreements was the fact that Chiang Kai-shek intended to a reassert KMT control over the entire country where, at the very least, Mao and the communists intended to hold on to the territory currently under its control. Given this, much of their promises were to prove empty including the agreement to integrate their military forces. While the CCP did pull their troops out of southern China, they consolidated their hold over their territories in the north. In November 1945, the KMT attacked the CCP in the north. Zhou Enlai, who had remained in Chongqing to continue negotiations, returned to Yan’an and Ambassador Hurley unexpectedly resigned.

Mao Zedong and U.S. General George Marshall in China, 1946

Truman sent General George Marshall to negotiate a power sharing arrangement between the CCP and the KMT

Still earnest in his desire to lead China onto a peaceful and democratic course, Truman sent General George Marshall as his envoy in December 1945. Marshall achieved a cease fire in January 1946, and got Chiang Kai-shek to agree to convene the People’s Congress as had been agreed during the August-October 1945 talks. Thirty-eight delegates, representing all of Chinese various political parties, assembled in Nanjing between January 11 and January 21 where they appeared to reach accord on the framework of a constitutional government, of a unified military command and of a national assembly. Yet despite these accords, military clashes between the KMT and the CCP recommenced.

Buoyed by a string of military victories, in July 1946 Chiang Kai-shek convened his own National Assembly in open disregard to the original agreement that no such Assembly should be called until all political parties first formed a coalition government. The CCP and the Democratic League boycotted the illegal assembly in protest. In a move reminiscent of Yuan Shikai’s efforts to take control of the National Assembly in 1914, Chiang Kai-shek proceeded without multi-party support, drafting a constitution that would cement his control of power.

Mao Zedong and Chiang Kai-shek toast each other 1946

In June 1946, General Marshall again got the KMT and the CCP to call a halt to their fighting – particularly heavy in Manchuria – and to return to the negotiating table. He pressed both sides to reopen the railways which were a key to the country’s distribution system. Yet, even as these discussions were occurring, the KMT was organizing a second assault on CCP positions in Manchuria to be launched in July. The CCP, in turn, were hardening their position. They refused joint military leadership, declined to give up any territory that they controlled and refused to have dictated to them which policies they could implement within the territory that they governed.  The CCP were also increasingly suspicious of American intentions. In their base areas, they began to voice anti-American propaganda about how the Imperial Americans were once again interfering in Chinese politics. In July 1946, the communists attacked an American supply convoy, killing four American Marines and wounding a dozen others.

In the face of renewed fighting, President Truman told General Marshall that the Americans would not support China if it dissolved into Civil War. He also re-articulated this in an August 10, 1946 letter to Chiang Kai-shek. Truman warned Chiang that if his positions did not become more flexible, American support would end. He encouraged Chiang to “outflank” the CCP through economic and social reforms instead of trying to crush them militarily. Yet, the KMT had always drawn its power from urban centers and from their business elite. It still paid little attentions to agrarian problems and remained largely unsympathetic to the peasants’ plight even though the peasants represented the overwhelming majority of the Chinese citizens. Chiang thus failed to recognize the revolutionary potential of the peasant masses. He never made any efforts to organize them for himself or to neutralize them with land and social reforms. Instead, for the most part, he continued policies that forced them into submission when the need arose, without ever considering what was making peasants revolt in the first place.

Chinese Peasants became radicalized due to KMT neglect of their conditions

Chiang Kai-shek also believed that the United States would never let China fall to the communists.  It was true that the United States wanted to establish a new balance of power in the Pacific and East Asia in which it could play a dominant role. Such a policy required a strong alliance with either China or Japan. That said, the US’s first priority was to rebuild Europe. Because of this, it wished to achieve its East Asian goals as inexpensively as possible. As China began to spiral into Civil War, the US began to look to Japan as a better and cheaper option on which to build its East Asian strategy.

By January 1947 Truman reached the conclusion that the KMT and the CCP were determined to fight it out. Truman had no intention of embroiling US troops in a Chinese civil conflict. US mediators were recalled. When Truman stole the election from Dewey in 1948, it was the nail that sealed the end of significant US engagement in China. The KMT had carefully cultivated relations with the Republican Dewey who had said that, if elected, he would extend massive aid to the Chinese. Truman showed no such inclination. After his election, he twice turned down KMT requests for aid in November and December 1948.

Land and other Reforms in Communist-held Areas

The CCP began implementing land redistribution in the territory under its control

While American-led negotiations were occurring through 1947, the communist leaders moved from a land reform policy based on rent reductions and graduated taxes to a more aggressive policy of land redistribution and the eradication of tenancy in the areas that they controlled.  The CCP were particularly active in launching this land reform policy in its original war-time base of Shaanxi, northern Jiangsu, and parts of Hebei and Shandong. The Communists efforts were most successful in areas ravaged by Japan’s Three All Policy as well as those provinces destroyed when Chiang Kai-shek broke the dikes of the Yellow River. In these areas, the Communist message of a new, fairer social order resonated with peasants mired in poverty. Also, years of fighting had weakened the peasants’ traditional social loyalties such as those to their lineage and religious associations. Often now, their villages and provinces were commanded by appointed officials whom the villagers considered nothing more than bullies and bandits.

Mass peasant engagement and violence became elemental to the land reform process. Mass meetings were used to unleash the anger of peasants against their wealthy landlords. These landlords were then subjected to public humiliation, beatings and even death while the peasants confiscated their land and often their food and wealth. Some of the land redistribution was temporarily reversed when KMT troops recaptured territory. Where landlord power was restored, the KMT and landlords retaliated harshly.

The Battle for the Nation Intensifies

Communist troops in the Battle of Siping

With land and other reforms in communist controlled areas now set in motion, Lin Biao began to transform the PLA into a conventional fighting force, moving away from the guerrilla tactics that had been the communist modus operandi up until now. On May 1, 1946 the CCP renamed the Eight Route Army and the New Fourth Army the Chinese People’s Liberation Army (“PLA”). Lin Biao employed his new methods successfully by repulsing a KMT attack on Harbin. Then, in November 1946 he crossed the frozen Sungari River and attacked KMT troops in their winter base. Lin Biao continued to strike across the river throughout their early months of 1947, and then in May 1947, he launched a massive attack on the railway junction of Siping with 400,000 troops.

Defeated by the KMT who were backed by air power, Lin reorganized his forces and then surrounded and isolated several key Nationalist-held Manchurian cities by cutting off rail access which was a major line of supply. The KMT’s fighting spirit eroded. In particular, KMT troops were demotivated by the disparity between their poor pay and that of the officers’ who often used their positions for self-enrichment. KMT troops in Manchuria were quickly adopting a siege mentality, digging in behind defensive lines instead of trying to proactively attack the CCP whose troops were buoyed by many native Manchurians who felt they were fighting for their homeland. This effectively allowed the CCP complete control of the Manchurian countryside. By May 1948, the position of Chiang Kai-shek’s troops in Manchuria was turning increasingly desperate. This was all the more important because Chiang had concentrated many of his best troops there, without having first consolidating military and civil control of the South. The KMT strongholds of Changchun and Mukden could now only be supplied by air.

KMT soldiers with straw shoes – poor equipment and corrupt KMT military leaders led to high desertion rates toward the end of the Civil War

Yet Chiang Kai-shek had too much invested in Manchuria to listen to his military advisors who proposed that he pull back behind the Great Wall in order to regroup his forces. Louyang was captured by the Communist in April 1948, cutting Xi’an off from the East. Subsequent CCP victories in Shandong isolated 100,000 KMT troops in Jinan. Under a separate assault in March 1948, the Communist led by Peng Dehuai recaptured their wartime base of Yan’an which had been taken by Chiang Kai-shek in March 1947.

At the city of Kaifeng on the Yellow River – which protected the key railway junction of Kaifeng – the communists pitted 200,000  season troops against about 300,000 KMT fighters. The CCP succeeded in holding Kaifeng for a week before being forced to retreat. Yet the victory cost the KMT lost 90,000 men. By October 1948, the city of Jinan fell to the CCP due in part to KMT troop desertion and to communist underground activity. This meant that Chiang Kai-shek now lost its last base in Shandong. Also in October 1948, Lin Biao succeeded in capturing both Mukden and Changchun, thus causing the desertion, surrender or elimination 400,000 of Chiang Kai-shek’s best troops.

Chiang Kai-shek’s Leadership Challenged

Student protests

Chiang Kai-shek had been re-elected president in the spring 1948 by the National Assembly which had been boycotted by the CCP and the Democratic League. Yet continued economic, civil and military mismanagement was eroding his popularity. His support suffered further when in July 1948 government forces killed 14 and wounded over 100 students who had fled fighting in Manchuria and who were now living as refugees in Beijing. The students were shot when marching to protest their inadequate subsistence allowance which often forced them to beg in order to eat. On January 21, 1949, Chiang Kai-shek resigned as president, although he remained head of the Kuomintang Political Party. Chiang Kai-shek was replaced with Li Zongren.

The Final Communist Push

Peasants carting supply for communists

Having lost Shangdong, the KMT tried to regroup to defend northern China, or if that failed, the center of the country. In late 1948, Zhu De, Commander-in-Chief of all CCP forces, launched a successful 600,000 troop assault on the railway junction of Xuzhou against an equal number of KMT soldiers. In the 65 day battle that followed, the communists showed new skill with conventional warfare by outwitting the KMT generals who suffered from conflicting commands from Chiang Kai-shek and from heavy troop desertions. Deng Xiaoping orchestrated the communists’ logistical support by mobilizing 2 million peasants over four different provinces. Over the same period, Lin Biao captured Tianjin in January 1949. He then moved on to Beijing, convincing the KMT general to surrender. The KMT had lost the north of China.

The capture of so many large northern cities threw the communists into urban government as never before. Mao Zedong recognized this in March 1949 when he gave a report stating that the focus of communist efforts would begin to shift from the countryside into the cities while the PLA moved southward on its conquest of the country. In practical terms, their experience in Harbin was to prove invaluable. So was their initial decision to disrupt as little as possible the property and livelihoods of the people in the cities that they captured. To this effect, Chinese businesses were protected, urban property did not change hands, and factories were guarded from looting.

People’s Liberation Army enters Beijing

The PLA continued to maintain strict discipline in all the areas into which it moved. A people’s currency- the renminbi – soon replaced the KMT yuan. To try to prevent monetary chaos, only a short window was provided in which the yuan could be exchanged for the renminbi. Thereafter, any exchange in gold, silver or foreign currency was prohibited. Additionally, labor unions were not allowed to strike. Refugees were fed and repatriated when possible. Educational institutions continued to teach. Stockpiles of food were used by the government to stabilize food prices during times of shortage.

The KMT plan for a Final Retreat

Taipei Branch of the Bureau of Monopoly, was occupied by angry crowd Tawain 1947

Taipei Bureau of Monopoly occupied by angry crowd Taiwan 1947

By early 1949 the KMT was making contingency plans in the event of the once unthinkable- that communists could win control of the country. In 1945 China had reclaimed Taiwan from the Japanese who had ruled the island as a colony since 1895. When the KMT reinstalled a Chinese government in Japan after the war, the same patterns of KMT corruption and disregard continued. The KMT quickly alienated the local population. Taiwanese discontent came to a head in 1947 when Chinese troops fired into a group of Taiwanese gathered to protest the shooting of a woman selling cigarettes in contravention to a government monopoly. Over the following weeks, the KMT continued to treat the situation heavy-handedly by arresting and executing thousands of Taiwanese intellectuals and civilian leaders. It eventually imposed Martial Law in order to control the population.

Li Zongren

By January 1949, the KMT began transporting to Taiwan thousands of crates of Qing Dynasty archives as well as a huge collection of China’s dynastic art taken from the Imperial Palace collection. Chiang Kai-shek also began to steadily build up on the island a force of over 300,000 soldiers personally loyal to him.

Li Zongren, the new KMT president, tried to prevent this final retreat by getting Mao Zedong to compromise on his conditions for KMT surrender. These conditions included provisions such as a complete reform of the land tenure system and the reorganization of KMT armies under communist command that were completely unacceptable to the KMT. By April 1949, the Communists gave President Li an ultimatum to accede to their conditions within five days or the communists would attack anew.

Nanjing fell on April 23 without resistance. Hangzhou and Wuhan were lost shortly thereafter. Shanghai was taken in May 1949. Xi’an, Lanzhou and Changsha were taken by August 1949. By September the KMT had lost Xinjiang, Suiyuan and Ningxia. By October the KMT surrendered Canton and Xiamen – the last port from which to retreat to Taiwan. By November 1949 Chiang Kai-shek’s wartime base of Chongqing was claimed as communist territory.

The People’s  Republic of China

 1949

Mao Zedong founding People’s Republic of China October 1, 1949

Anticipating victory Mao Zedong convened a Political Consultative Conference in Beijing in late September 1949. The conference was dominated by the CCP while also including representatives from 14 other political parties. At a subsequent ceremony on October 1, 1949, standing atop the main entrance of the Ming and Qing Imperial Palace, Mao Zedong announced the founding of the People’s Republic of China.

 

References

Sino-Japanese Relations: In the Shadow of History

An Overview

There can be no doubt that China and Japan are the giants of East Asia, both in economic and political terms. The bilateral relationship is, therefore, of great importance to both the region and the wider world. Despite a mainly cordial relationship over two thousand years of known interaction, Sino-Japanese relations have been complex and difficult for over a century. After a brutal invasion and occupation of the Chinese mainland during its expansive war of the 1930s and 1940s, Japan was defeated and found itself firmly in the anti-Communist bloc during the Cold War. A thaw in the 1970s, driven by the Chinese split with the Soviets led to the normalization of diplomatic relations but the Chinese and Japanese never truly reconciled this history. As a result, the question of history remains one of the biggest thorns in the side of the Sino-Japanese relationship. Compounding this emotional problem is a series of territorial disputes in the East China Sea, most notably around the Diaoyu (in Chinese) or Senkaku (in Japanese) islands. There are also ground for optimism; China has been Japan’s largest trading partner since 2007 and the two countries have worked together to promote regional cooperation and low level institutionalization. Nevertheless, the difficult shared history casts a constant shadow over the relationship.

The Historical Relationship

China’s relationship with Japan has a long and complex history, with interaction between the two cultures stretching back over at least two millennia. There can be no doubt that much of Japanese culture has its roots in that which it borrowed from the Chinese. This is most notable in the written form of Japanese, which uses both Chinese characters and two other scripts that are derived from written Chinese (though the oral language is entirely distinct from Mandarin). The other major similarity lies in philosophy and religion; the adoption of Confucianism and Buddhism, both of which were learned through interaction with the Chinese over many centuries, is still clearly evident in modern Japan. This adoption of aspects of Chinese culture took place across several of China’s dynastic periods, during which interaction was predominantly cordial with the Japanese paying tribute to the Chinese emperors without ever really becoming a “vassal state” in the way that many other areas of East Asia did during this time.

The relatively cordial interaction was brought to an end during the Edo period in Japan (1603-1868) during which it effectively closed itself to dealings with other states. The end of this period coincided with several of China’s military defeats to Western powers, including the Opium Wars, which led to various parts of China becoming “concessions”, effectively miniature colonies within China. These defeats were part of the long decline of China’s final dynasty, the Qing, and Japan, like several Western powers, sought to take advantage of the chaos and confusion that ensued. After the first Sino-Japanese War of 1894-5, which had initially been fought over control of Korea, China was forced to sign the Treaty of Shimonoseki, under the terms of which Japan occupied Taiwan and the Penghu Islands. This defeat is considered by many Chinese to have been a huge psychological blow to the nation. After millennia of perceived Chinese superiority in the region, just a few short decades had seen China’s military humiliation at the hands of various “barbarians” from outside of East Asia and now at the hands of the Japanese, over whom the Chinese had always considered themselves to be both culturally and militarily superior.

However, by far the most significant conflict between the two powers, both in terms of the shutterstock_2646972 resizednumber of deaths and the continuing impact on the bilateral relationship, was the invasion of China by Japan that occurred in the 1930s. After first colonising Manchuria, in the Northeast of China, Japanese forces went on to occupy almost half of Chinese territory, committing widespread atrocities along the way. The most notorious of these atrocities was the Nanjing Massacre, a six-week orgy of violence and destruction during which as many as 300,000 Chinese, many of them civilians, were killed. Almost as notorious was the work of Unit 731, a Japanese research unit that conducted chemical testing on live Chinese prisoners of war. The occupation, including the colonisation of Manchuria, lasted a total of fourteen years, only coming to an end with Japan’s defeat in 1945.

With the dawning of the Cold War era, the PRC and Japan did not normalise relations until 1972, following Richard Nixon’s visit to Beijing. During the negotiations to establish mutual diplomatic recognition the Chinese agreed to forgo any war reparations or compensation from Japan for its wartime atrocities. For the remainder of the 1970s the two enjoyed a warm relationship, culminating in the signing of the Treaty of Peace and Friendship in 1978 and, following China’s decision to embark on market reform, the initiation of a series of low-interest loans (frequently referred to as “Yen loans”) from Japan to China to fund development of industry and infrastructure. While never explicitly acknowledged as such by either party, these were widely considered to be in lieu of war reparations.

The “History Issue”

Despite the apparent thaw in relations it is widely acknowledged that the reconciliation between China and Japan was only ever at a superficial level. This is evidenced by the CHEN WS / Shutterstock.comrecurrence of what has come to be termed “the history issue” in the relationship. Though the countries normalized relations in 1972, the history issue did not rear its head until the early 1980s. An apparent revision of Japan’s history textbooks in the early 1980s, which seemed to downplay Japan’s invasion of China, sparked an angry response from China at both the societal and political levels. Though it transpired that this was a misunderstanding caused by reporting errors in the Japanese media, the damage had been done and this issue recurs each time Japan’s Education Ministry approves a set of history textbooks, normally every four years. In 2001 and 2005, this issue caused widespread anger in China when a book was approved that apparently downplayed the Nanjing Massacre and referred to the invasion of China has merely an “advance”. What is rarely understood in China is that the textbooks in question are produced by the Japanese Society for History Textbook Reform, a very narrowly focused right wing group that attracts little support in the wider Japanese society, and that they only appear on a list of books approved to be used, rather than being the set text. As a result, only a handful of Japanese schools have adopted these books with a reported 0.03% of Junior High School students actually studying them, a figure that would have been much lower were it not for the campaign group issuing free copies to schools for disabled students. Nevertheless, the approval sparked angry demonstrations across China with protest marches attracting in excess of ten thousand in several different cities and violent attacks on Japanese business interests and the Japanese Embassy in Beijing. Though some reports at the time suggested that the Chinese government played a role in organizing and inspiring these protests, later research showed this not to be the only driving force behind the outpouring.
shutterstock_87269803Another particularly sensitive matter is Yasukuni Shrine, a highly controversial Shinto shrine in Tokyo that honors all of Japan’s war dead. Under Shinto beliefs it is believed to be the resting place for the kami (loosely translated as souls) of all those who have died fighting for the Emperor of Japan since the shrine’s inception in the 1860s. This includes Class A war criminals that were convicted after Japan’s occupation of China of war crimes. Most notorious among these is Hideki Tojo, the wartime prime minister. After the Class A war criminals were enshrined in 1978 in a secret ceremony that was revealed a year later, the Emperor refused to visit the shrine again until his death a decade later. His successor has continued the policy of staying away in order not to offend Japan’s neighboring states. However, there have been several high profile visitors that have caused consternation in China (and other East Asian countries, most notable South Korea). In the early 1980s, it was commonplace for Prime Minister Nakasone to visit, until he did so on August 15th 1985, the fortieth anniversary of Japan’s surrender. In response to opposition in China, the General Secretary of the CCP, Hu Yaobang, personally requested that Nakasone stop these visits. Though two other prime ministers visited the shrine in the following 15 years, the issue was largely put to rest until Prime Minister Koizumi returned to the shrine in August 2001. He fulfilled his pledge to visit the shrine once a year while he was in office at great cost to the Sino-Japanese relationship at the highest political level and also at the societal level; bilateral summits were suspended and his actions created the impression among many Chinese that Japan had not fully repented for its previous wrongs and even a fear that it might return to its militaristic past. By the end of Koizumi’s tenure in 2006 the political relationship between the two powers had almost completely broken down and on several occasions popular Chinese anger spilled over into protest and even violence against Japanese in China. Subsequent prime ministers elected not to visit the shrine, allowing the political relationship to thaw once more, but this period serves to highlight that the issue of history is never far from the surface of Sino-Japanese relations. In fact, during the three years that the Democratic Party of Japan (DPJ) led the country from 2009 to 2012, the issue took a back seat in the relationship. However, it has begun to rear its head once more since the LDP (Koizumi’s party, and the overwhelmingly dominant force in Japanese politics since the end of the US occupation) regained power. In December 2013 Shinzo Abe, now in his second stint as prime minister, visited the shrine on the first anniversary of his return to the post. The act was greeted with anger from across the region but most notable in China and South Korea (with whom Japan has also had a difficult relationship in recent years). Abe has since refrained from visiting the shrine, though he has repeatedly sent offerings under his own name. Objections from the US that have become public since his December 2013 visit might provide an incentive for him not to return in person but even if it is a one-off it has put the shrine issue firmly back on the agenda of Sino-Japanese tension. To mark the 70th anniversary of Japan’s defeat in World War II, Abe made a significant and closely observed speech, repeating aspects of previous apologies but insisting that future generations should not be “condemned” to repeatedly apologize for actions in which they had no part. This was a clear indication that he wanted to move Japan away a position that he – and his supporters – consider to have been overly deferential to China in this area for too long. Such a shift does not go down well in China and this was underscored by Xi Jinping’s speech at its own commemorations of the 70th anniversary a few weeks later.

Slips of the tongue from Japanese politicians (that are not always unintentional) often cause anger and resentment in China as well. In his first period in office immediately succeeding Koizumi, Shinzo Abe managed to offend both China and South Korea by claiming that the issue of ‘comfort women’ – a euphemism for the thousands of women forced into sex slavery at the hands of the Japanese military during their occupation of East Asia – had been exaggerated, earning himself a telling off even from the US. More recently, the mayor of Nagoya declared that he did not believe that the Nanjing Massacre happened. This was particularly insensitive as he made the claim when welcoming a delegation from Nagoya’s sister city: Nanjing. It is this level of insensitivity – displayed by only a minority of Japanese but often by those who make themselves most well heard – that continues to cause frustration, bemusement and resentment among the Chinese. Even more recently, similar views have been expressed by one of the governors of NHK, Japan’s national broadcaster.

Territorial Disputes

The other major issue that threatens the stability of the bilateral relationship from time to time is the dispute over sovereignty of the Diaoyu Isalnds (known as Senkaku in Japanese). These uninhabited islands are currently administered by Japan, but are claimed by both countries (and also by Taiwan). It is widely believed that significant levels of resources, including oil and gas, may lie underneath the islands, as well as within the maritime EEZ that would accompany recognition of the sovereignty of the islands. Complicating the issue is China’s exploitation of the Chunxiao gas field; although there is no dispute over the sovereignty of the gas field itself, it is within four kilometres of what Japan considers to be its EEZ and it argues that China may siphon resources from its side. China disputes that this is likely and, in any case, does not accept Japan’s demarcation of its EEZ as it is based on Japanese sovereignty of the islands.

Attempts to resolve the dispute have been largely unsuccessful; during the negotiations for the Treaty of Peace and Friendship it was determined that the matter should be shelved and left for future generations to resolve. However, nationalist activists on both sides have sought to push forward their respective country’s claims to the islands, often leading to heightened diplomatic tensions between the two. One of the most serious incidents in recent times occurred in September 2010 when a Chinese fishing boat collided with a Japan Coast Guard ship that was patrolling the area. The captain and crew of the boat were all arrested and imprisoned in Japan, leading to a major diplomatic dispute between the two countries, with both governments accusing the other of violating sovereignty. The captain was eventually released without charge after Japanese prosecutors determined that action against him would harm Japan’s national interests, though a video was leaked to the media that showed the captain, apparently under the influence of alcohol, intentionally ramming his boat into the Japanese ship. The strength of China’s reaction shocked many in Japan as several Japanese businesspeople were arrested on fairly dubious grounds and exports of rare earths to Japan were apparently halted, though Beijing insisted that the issues were unconnected.

shutterstock_103396334In 2012 Shintaro Ishihara, then the mayor of Tokyo and a right wing firebrand who had long campaigned for a tougher policy towards China, launch a campaign to nationalize the islands. The three largest islands had been in private ownership since Japan integrated them into its territory at the end of the eighteenth century. The family that held the rights to them had been keen to sell them on but was not willing to do so if there could be any threat to Japan’s sovereignty claims. As a result, Ishihara launched a bid to raise enough funds to buy the islands and vowed to take them under the umbrella of the Tokyo government. His plans also included the building of a harbor on the largest island, a move that would unquestionably have inflamed tensions with China and possibly have provoked a military response. When Ishihara’s campaign achieved its goal of raising sufficient funds, the national government decided it had no option but to move on the issue. The then-Prime Minister Yoshihiko Noda announced that the national government would purchase the islands and quickly struck an agreement with the family that owned them. This move was, without doubt, driven by a desire to lessen the tension with China as Ishihara’s plan was deemed highly provocative. Under the national government’s ownership no development of the islands would occur and the status quo would effectively be maintained. Noda clearly hoped that this move would be recognized by the Chinese and the response would be proportionate.

However, the nationalization of the islands proved to be a particularly hot topic in China and the response from Chinese society was the most serious that has been seen in any international issue in living memory. A series of scathing diplomatic attacks from the government served as a backdrop to widespread anti-Japanese protests across China. In total, 85 cities on the mainland witnessed large protests with many of these becoming violent. Japanese businesses and citizens were harassed, with even the ambassador’s car coming under attack in Beijing. Calls for boycotts of Japanese produce – a common response from nationalistic Chinese whenever a dispute with Japan occurs – appeared to have a greater effect than ever; in one bizarre demonstration of support for this idea a man set fire to his own Honda car in the middle of a Shanghai street. The economic relationship was demonstrably affected, with Japanese firms temporarily closing factories in China and laying off tens of thousands of workers. Sino-Japanese trade had previously been thought to be almost immune to the repeated spats between the two countries, but annual trade dropped by 4% in 2012. Two-way tourism figures fared even worse, with Chinese visitors to Japan down 33% in October 2012 compared with the previous year while the numbers of Japanese visitors to China fell by two thirds in the second half of 2012.

Since the nationalization China has stepped up “surveillance” of the areas surrounding the islands. Where once an unwritten agreement not to enter Japan’s de facto contiguous zone around the islands had kept the prospect of conflict to a bare minimum, China has since regularly flouted this norm. Though the incursions are frequently “Marine Surveillance” vessels rather than military ships, the possibility of conflict has been raised to its highest level since the two countries normalized relations in 1972. This was brought into sharp focus in December 2012 when a Chinese “Maritime Surveillance” plane entered the airspace of the islands, leading to the Japanese scrambling jets in response. A further escalation of the dispute in January 2013 occurred when the Japanese claimed that a Chinese PLAN frigate (a navy warship) had locked its radar onto a Japanese ship in the waters, suggesting that the first shots were about to be fired. Though China subsequently denied the incident the fact that such ships are now in frequent and close contact has significantly raised the possibility of a miscalculation that might trigger actual armed conflict between the two powers. The seriousness of the situation was heightened by a declaration from Hilary Clinton in January 2013 that the US’ joint security treaty with Japan covers the islands, thus obliging it to defend Japan if attacked by China. This raises the possibility of direct conflict between China and the US for the first time since the Korean War and is a stark reminder to all involved of the gravity of the situation. This was again brought into sharp focus in April 2013 when Prime Minister Abe issued a warning that Japan would respond with force to any attempt by China to land on the islands. Though this is would clearly be a war that would benefit nobody, it remains an unpalatable possibility.

In October 2013 China declared an Air Defense Identification Zone (ADIZ) above the East China Sea, including directly above the islands. This requires aircraft entering the zone – which is separate from China’s territorial airspace – to identify themselves to the Chinese authorities, log a flight path and retain open communications for the duration of the period of time in the zone. Although the zone is not unique – several of China’s neighbors have similar zones, including Japan – the sudden declaration and the more stringent requirements imposed by China have made this a controversial move that is clearly linked to the islands dispute. Aircraft from both Japan and the US have so far ignored the rules without serious consequence but the potential for miscalculation has clearly been raised even further by this development.

The islands issue has calmed somewhat in recent months but remains a potential flashpoint between the two countries. Certainly no resolution of the issue appears imminent and it has clearly played a role in Japan’s moves to reinterpret its Constitution in order to allow its military to play a role in collective self defense, a move that has caused a great deal of unease in a number of countries in the region, not least in China and South Korea.

The Taiwan Issue

When Japan defeated the Qing in the First Sino-Japanese War of 1894-5, one of its major prizes was the ceding of the island of TaiwanTaiwan has not been ruled by Beijing since then, despite its continued claims of sovereignty. Though the Japanese were expelled after their defeat in 1945, its role and position within the Taiwan issue remains a cause of consternation for the Chinese. In particular Japan’s continued hosting of US forces on Okinawa, an island that is of clear strategic importance should the US ever seek to defend Taiwan in a conflict with China, causes friction with Beijing, though it should be noted that it is even more controversial in Okinawa itself where local people have long campaigned for the complete withdrawal of US forces.

Though Japan is firmly committed to the ‘one China’ policy that all countries with which Beijing has diplomatic ties must affirm, it continues to have close ties with the island. These ties are particularly evident in the field of business and Japan is Taiwan’s second largest trading partner with bilateral trade topping $70 billion in 2011. Japan also continues to have a close cultural relationship with the island, with Japanese pop music and television programs particularly popular. This successful ‘soft power’ irks the Chinese who see a continued threat to their claims of sovereignty from a power that has not only demonstrated a willingness to colonize in the past, but which also has a motivation for preventing or delaying the process of the ‘reunification’ of Taiwan and the mainland.

Bilateral Trade


Bilateral trade is the biggest area for optimism in the relationship, and it has been argued that the main factor in preventing open conflict from erupting has been the level of trade between the two. Japan has consistently been one of China’s biggest trading partners since early in the reform era, and has also been a source of significant inward FDI. In 2007 China became Japan’s biggest trading partner and, though Japan’s significance to China has declined relative to other major partners, the two remain closely interlinked. In 2010, bilateral trade reached $300 billion. Such interdependence was forged from a high level of complementarity between the two economies – China was in a position to provide plenty of cheap labor in return for investment and technological transfer at a time that Japanese firms found the need to expand and outsource away from Japan – in combination with a geographic proximity that allows relatively quick transport of both people and goods. In June 2012 direct trading between the RMB and the Yen began, bypassing the US dollar for the first time and making bilateral trade even easier. The trading relationship has remained robust through some of the most heated political disputes, and the relationship during the early 2000s, characterized by political spats over the history issue and popular anti-Japanese protests in China, came to be referred to as “zhengleng jingre” (cold politics, hot economics), though it could also be argued that such problems do impact on bilateral trade that could have been even more spectacular against the backdrop of smoother political ties. Notably, when China chose the partners for its high speed rail network it felt compelled to shun Japanese firms in response to domestic pressure from nationalists angered at Japan’s perceived continued provocations over the history issue. As a result, China’s network of high speed train network was put together by a combination of firms from France, Germany, Canada and China, among others. This represented a negative outcome for both sides, with the Japanese unable to cash in on Chinese investment in its infrastructure that has totaled $300 billion by 2012 and is expected to continue to rise as the network is expanded, while the Chinese ended up with a system that fell short of its original expectations and may have contributed to the fatal train crash in Wenzhou in 2011.

East Asian Regionalization

In recent years there has been some limited progress toward regional integration and institutionalization in East Asia. In some areas this has actually been a source of competition for influence between China and Japan such as in the development of ASEAN +1 and ASEAN +3, whereby the two countries have sought to engage with Southeast Asian countries in order to further their own interests rather than to develop frameworks for dealing directly with each other. However, the two countries’ involvement in the six-party talks over the North Korean nuclear issue that also included both of the Koreas, Russia, and the US, was a first step in the creation of a significant regional forum. Though not formally related to the six-party process which has now stalled, China and Japan, along with South Korea, now hold annual three-way summits, hosted on a rotational basis, that have begun to foster a much greater sense of understanding and cooperation between the three powers. While it is significant that South Korea is involved in this, it is the engagement of China and Japan that has the greatest potential for positive impact on the region going forward. However, the islands dispute between China and Japan (as well as another territorial dispute between Japan and South Korea) the erupted again in 2012 has stalled the process. The 2013 summit was indefinitely postponed and although never formally abandoned, there has not been a summit since 2012.

Future Trends

The Sino-Japanese relationship is, arguably, the most important bilateral relationship in shutterstock_3155944East Asia. Many tensions remain, particularly over the history issue and the Diaoyu/Senkaku dispute. While the former of these problems has appeared to have been handled sensibly on both sides since the resignation of Koizumi, it remains a deeply-rooted issue that retains the potential to be the cause of significant mistrust and ill-feeling, something that was potently demonstrated by Abe’s visit to Yasukuni Shrine in 2013. That mistrust of Japan’s apparent moves towards normalization of its military forces is played out in the arena of this historical ill-feeling underlines how important the interpretation of history is in the bilateral relationship, even when considering contemporary issues. The territorial dispute appears equally unlikely to be wholly resolved any time soon, with the positions of both countries entrenched and apparently irreconcilable. The trawler incident in 2010 demonstrated how easily this issue can come to the fore and become a major stumbling block in improving Sino-Japanese relations. Furthermore, the nationalization and subsequent flare-up of tensions from 2012 onwards has shown how dangerous this issue is. However, both sides have ordinarily demonstrated the political resolve to prevent either of these two issues from spilling over into open conflict, and a return to military warfare seems highly unlikely, even if it is no longer entirely unthinkable. The strength of the economic relationship, while declining in relative importance to China, continues to grow and remains both a motivation for, as well as a method of, mitigating the undoubted tensions that do exist between the two powers.

From Indifference to Engagement to Dominance? China and International Organizations

Introduction

Since the founding of the People’s Republic of China in 1949, its strategy with regard to involvement in international organizations has undergone a complete U-turn. As political and economic international organizations such as the United Nations and the Bretton Woods Institutions developed in the years after WWII, the PRC remained skeptical and suspicious of becoming entrapped in a framework set by external, Western, and ordinarily capitalist powers. Instead, it pursued a policy of non-engagement in multilateral institutions, with very few exceptions. Those it did involve itself with, such as the Non-Aligned Movement, evidenced attempts by China to disassociate itself from the superpower struggle between the US and the Soviet Union. Although this was partly driven by the politics of the Cold War that determined so much of international relations at that time, it also reflected the mistrust felt in China towards such institutions, rooted in the historical sense of injustice felt at its treatment by the League of Nations, which failed completely to arrest the invasion of China by Japan, a League member.

China began to rethink its engagement in international organizations after the success of its economic reform program launched in 1978. As an increasing percentage of its GDP became generated through international trade, and its status as an international power began to rise, China came to determine that engagement with international organizations would be useful in resolving trade disputes, gaining access to markets, promoting its perspectives on the international stage, and assuring established powers that its rise would be peaceful and would happen within the existing international framework. Today, China is not only a member of virtually all relevant international organizations, but it is also a key actor in many of them.

United Nations

Since the creation of the UN in the aftermath of World War II, one of the five permanent seats on the Security Council has been reserved for China. This seat was initially occupied by the Republic of China in Taiwan that was recognized as the government of all of China by most Western powers from 1949-1971. The People’s Republic of China, therefore, had no representation within the UN. This changed in 1971 when a UN General Assembly vote recognized the PRC as the legal government of China, effectively transferring all UN powers to the PRC, including Taiwan’s permanent seat on the Security Council and the veto that comes with it. This was an important step in the gradual global recognition, by international powers, that the PRC was the legitimate government of China. The ROC in Taiwan was expelled from the UN as it was no longer recognized as a state, and has never been readmitted, despite sporadic attempts from within Taiwan for it to be recognized. Thus, its membership in the UN had the immediate effect of facilitating the promotion of the PRC’s ‘one China’ policy, which ensured Taiwanwould never be officially recognized as separate from the PRC.

In its early years in the UN, China was relatively passive in its behavior, ordinarily abstaining in votes on peacekeeping operations (PKOs) and never participating in the operations themselves. During the 1971-1978 period, China voted in favor of roughly 40% of the resolutions that passed. This gradually began to change after 1978 with China increasing the number of motions it put forward. This more participative and assertive behavior continued in the 1990s, particularly from the first Gulf War onwards, when China not only began to vote in favor of peace keeping operations, PKOs, but actually became involved in the operations directly. By 2008, China was contributing approximately 2500 troops to UN PKOs, a similar number to France and significantly more than the US. The record since the turn of the millennium shows that more than 95% of resolutions that pass in the UNSC receive the support of China. This demonstrates both a shift in the behavior of China itself, which has become much more willing to take an active role in the process of international governance, as well as in the attitude of other UNSC members, who have come to see China’s support, as opposed to its passivity, as crucial to the perceived legitimacy of any UN action.

China’s increased willingness to engage in the UN framework has resulted in a slight contradiction in its official policy regarding the sovereignty of nations. While the rhetoric continues to stay on the message of respect for sovereignty and the maintenance of the principle of non-interference, China’s voting pattern suggests that there are circumstances in which it is willing to forgo this principle. Its acquiescence in 2002 on UN resolution 1441 which, ultimately, was used to justify the invasion of Iraq (though it should be noted that a clause on Iraq’s sovereignty and territorial integrity was included partly at China’s behest) exemplified this. An even starker example came in 2011 when resolution 1973 established a no-fly zone and authorized “all necessary measures” to protect civilians in Libya. That China saw fit to allow this resolution to pass (both China and Russia abstained) appears to demonstrate the limit of its international defense of the principle of sovereignty. However, such an increased willingness to allow such motions to pass in the UNSC should not be viewed as evidence that China has become a pushover in its dealings with Western powers – rather, it ought to be seen as proof that China has learned how to operate within the institutions of the UN, protecting its own key interests while promoting an image of a responsible world power.

China has positioned itself within the UN as something of a voice for developing nations and frequently counts on the support of these countries in votes in the General Assembly (where the veto it wields on the Security Council cannot be used). This has been particularly useful in avoiding censure over human rights abuses. As by far the largest member of the G77 group of developing nations, China is able to use its influence both to secure support from, and to advance the interests of, a significant bloc of the UN’s membership. Although this makes it a major player in the General Assembly, the most powerful body of the UN remains the Security Council where it continues to have to work with the other permanent members.

China is not only involved in the Security Council and General Assembly, but is also active in most other UN organizations through which it continues to pursue its core national objectives. For instance, even during the 2003 SARS and 2006 Avian Flu epidemics, China maintained its stance of blockingTaiwan’s participation in the World Health Organization, on the grounds that statehood is required for membership and the PRC is the sole legitimate government of China with Taiwan as part of China’s territory. Such an intransigent position was criticized both in Taiwan and by health experts in the organization with some suggesting that lives were lost as a result, though there are no credible statistics to support this claim. What this episode clearly demonstrated was China’s “red line” with regard to its position on Taiwan and the position of strength it now occupies in the UN structure through which it can pursue its objectives.

World Trade Organization

After protracted negotiations China finally gained membership of the WTO on December 11th 2001, a full fifteen years after it originally applied to join, symbolically three weeks before Taiwan – under the name “Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (Chinese Taipei)” – also accessed. It should be noted that the WTO is an organization that does not require statehood for membership and Hong Kong has been a member since the organization’s inception in 1995. China’s leadership during the long negotiations went to great lengths to ensure China gained its place. Both Jiang Zemin and the then Premier Zhu Rongji invested enormous personal political capital in the process and Zhu, in particular, came under fire for the level of concessions made in order to be eligible for entry, particularly with regard to a commitment that China would open its telecommunications industry to foreign competition. The perception, both within China and among some analysts abroad, was that the requirements for Chinese admission were greater than those asked of other countries. In particular the decision not to bestow “Market Economy” status on China seems to have been politically motivated: the requirements that were laid out for China to achieve this status have been demonstrated by the Financial Times, a respected UK newspaper, to be so stringent as to rule out any member of the WTO from passing the test. The result of this apparently un-passable test is that when China is accused of breaches of WTO rules, the arbitration process measures the validity of such claims against other countries’ economic indices. For example, when China is accused of ‘dumping’ – selling goods into another economic area at below the price they are produced– it is not China’s own labor and raw material costs that are used to determine if this is the case. On occasion, Malaysia has been used despite wages in that country being significantly higher than in China.

Despite popular perceptions of China as a country engaging in unfair practices in global trade, particularly within regard to its apparent currency manipulation and the practice of ‘dumping’, its early years in the WTO were remarkably non-confrontational. In fact, no cases were brought against China in its first two years of membership, and China itself did not bring a case against another member until as recently as 2009. In those cases that have been bought against China, all of which have been by the EU or the US, it has struggled at times to defend itself, winning just one of the dispute cases that have gone through to completion. China also seems to have followed a similar pattern in its behavior in the WTO as it did in the UN, in that it spent its first few years learning how to operate within the WTO system, before attempting to become a major player. China’s increased activity over the last 2 or 3 years, during which time it has gone from bringing no cases against other members to averaging 3 per year (all of which have been against either the US or the EU) is evidence of this. Recently, despite the structural disadvantage that China faces by not being a “market economy”, it has had some success. For example, in 2009 China successfully brought a case against the US to end the ban on its poultry exports that had been in place since the Avian Flu epidemic. Similarly, in 2010 the WTO ruled that the EU’s anti-dumping measures on Chinese sales of fasteners were unfair and too broadly applied. Despite these victories, China’s success rate in successfully resolving WTO disputes remains below the average for the organization.

World Bank and International Monetary Fund

Along with the General Agreement on Trade and Tariffs (GATT), which later became the WTO, the World Bank and the IMF made up the key international financial institutions that came into being in the post-World War II era. China has officially been a member of both the World Bank and the IMF since their founding, although just as with the UN, responsibility for these positions was with the Republic of China on Taiwan until 1980, when the PRC took over control. As with the UN, Taiwan has since been denied participation in both organizations. The PRC has called upon the IMF for financial assistance on only two occasions, both of which occurred during the early period of its post-1978 economic reform and restructuring program, and both loans have since been repaid in full. In recent years, as China’s international standing has continued to grow, China has pushed hard for greater influence for itself and other developing nations within both organizations. It has had only limited success to date. It currently holds 96,000 votes in the IMF, equivalent to 3.81% of the total, making it the sixth largest behind the US (16.76%), Japan (6.24%), Germany (5.81%), France (4.29%) and the UK (4.29%). These figures represent an increase in the voting share for China that came into force in 2008. However, under IMF voting rules, a total of 15% is required to veto any proposal, meaning that the US alone, or a combination of any four of the other G7 countries without the US, has this power. China is a long way from achieving such privilege. By increasing its agreed contribution to the budget of the IMF, China has (along with other developing nations) successfully campaigned for further reform. Thus, another shift in the make-up of these shares has been agreed in principle, but not yet implemented. Although China’s position is likely to improve as a result of these reforms, it is not clear how the final figures will appear once this agreement has been ratified, but a review is currently ongoing and this is expected to be completed in 2013. Voting in the World Bank system is more complex, as it is divided into several organizations, each of which has its own voting allocation. Despite recent reform and reallocation in favor of several developing countries that saw China as the largest beneficiary, China still remains a relatively small player. Since its foundation, the president of the World Bank has always been a US citizen. Similarly, the recent election of Christine Lagarde as the president of the IMF continued the pattern of Western Europeans heading that institution. Still, the appointment of Justin Yifu Lin, a Taiwanese-born citizen of the PRC, as Chief Economist at the World Bank represents a breakthrough of sorts. The domination of Western, developed nations in both of these organizations, however, is likely to continue for some time to come, despite the damage to reputations done by the financial crisis of 2008, a source of some resentment from within China.

G20

The G20, established in 1999 in recognition of the need to involve some of the larger developing nations in summits similar to those held by the G7 or G8, consists of 19 countries plus the EU. Since its inception, it has grown in significance, in no small part because of the inclusion of China, along with other major developing forces in global political and economic circles such as India and Brazil. These countries have pushed hard to make the G20 summit that takes place annually the premier event for global economic discussions and, consequently, to limit the importance of the G7 and G8 summits. While there has been some resistance to this, particularly from Japan which treasures its role in the G7 as a surrogate for its yearned-for but out-of-reach permanent place on the UN Security Council, the growing economic clout of China has meant this is, increasingly, the reality. Sideline summits have also given China a tremendous opportunity to promote symbols of its increased power on the world stage and one of the annual events of the G20 is the so-called G2 meeting that involves only China and the US. The existence of the G20, as opposed to an expanded G8, indicates China’s unwillingness to be enmeshed into yet another existent structure dominated by Western powers and, instead, to create a new system that incorporates other countries with potentially similar goals to its own, with whom it can form powerful alliances to overcome Western dominance.

Shanghai Cooperation Organization

Until very recently the Shanghai Cooperation Organization (SCO) received little attention in the West, but it has been a significant part of the PRC’s foreign policy since the mid 1990s. Formed as grouping of five countries – China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan – at a meeting in Shanghai in 1996, its initial objective was to foster greater military trust between central Asian neighbors. After its inception the group began to meet annually and became dubbed ‘the Shanghai Five’. The addition of Uzbekistan and a more formalized structure to the grouping saw it renamed as the SCO in 2001. Since then, several states in the region have expressed an interest in joining a group which has been mooted as an Asian rival to NATO – though this language is never used by the countries involved. Those expressing serious interest in joining the SCO include Pakistan and Iran who, along with India, Mongolia and Afghanistan, have observer status. In 2012, Turkey was granted ‘Dialogue Partner’ status, becoming the first NATO country to have official ties with the organization.

The SCO has expanded military cooperation between its member states to levels that could not have been achieved without it. Annual joint practice operations in various fields of conflict have increased to include a total of more than 5000 participants from all six member states. The majority of these come from the two largest militaries in the group – China and Russia – and the closer military and strategic ties between these two states is one of the most significant outcomes of the SCO’s development. However, the most important potential impact of the SCO is the creation of a multilateral framework of military alliances that does not include any Western power, and which has China as its assumed leader. Clearly China and Russia are the lynchpins of this organization, but the enthusiasm of the other four members, as well as the level of interest from Pakistan and Iran, makes the SCO a potentially significant actor in future international relations.

Future Trends

China’s policies on International Organizations are unrecognizable from those that were pursued prior to the Reform Era. China now seeks engagement and involvement, as its many international organization memberships and its active participation within the organizations testify. However, as a relative latecomer to virtually all organizations, China has a structural disadvantage in that it has to learn how to play by the rules that have already been set by others, which are not always to its advantage. While it has had some success promoting its objectives within these pre-existing power structures, being hampered by Western-originated frameworks remains a continued source of frustration for the Chinese leadership. China has tried to address this frustration by creating alliances with developing nations within the organizations to give it greater negotiating power. The instigation of the SCO and the promotion of the G20 are examples of how China can combat this, by instigating new institutions which place itself at the heart. It is also used its rising economic and political power to gain greater leverage in the international organizations, as when it demonstrated a willingness to increase financial contributions to the World Bank and the IMF in exchange for a greater share of the voting rights.

To date, China’s increased involvement in International Organizations has, for the most part, been consistent with its proclaimed world view: that of respect for sovereignty, non-interference in the internal affairs of other nations, opposition to hegemony or unilateralism, and the promotion of multilateralism. As China’s own stake in global political, economic, and security affairs continues to grow, it will be interesting to watch how firmly it can stick to such principles. There are already signs that it is willing to compromise on the reality of non-interference, even if the rhetoric continues unabated. China has, however, been utterly uncompromising in its insistence that any organization that requires statehood for membership must exclude Taiwan. Thus, Taiwan has been progressively and near-comprehensively marginalized in the international arena, allowed to participate in only limited ways in limited organizations. Despite numerous attempts to rejoin the UN, Taiwan will not, under any name, be able to do so. This represents a clear example of how China has used its involvement in international organizations to achieve one of its key domestic and foreign policy objectives.

Donald Trump and Xi Jinping

Defining the 21st Century: the Sino-US Relationship

Introduction

The Sino-US relationship is, without question, the most important bilateral relationship in the international system today, and is likely to define the twenty-first century. At stake will be whether China and the US can become “strategic partners”, as Bill Clinton argued they ought to be, or whether they will remain the “strategic rivals” as they were characterized by George W. Bush. In other words, can the two develop a working relationship that serves the core interest of both parties as well as the stability of the international system, or are they destined to clash over key interests? The answer will depend on careful management by both sides of the many tensions that exist between the two powers. In truth, given the complexity of the Sino-US relationship, it is unsatisfactory to characterize the relationship in such simplistic partner-rival terms; a productive and stable relationship between the world’s two greatest powers will surely have to encompass elements of both partnership and competition. A constructive Sino-US relationship will be one in which the partnership element is at the fore.

The Cold War and Normalization

After the end of the Second World War, the international system in general, and US bilateral relations in particular, came to be defined by the dichotomy between Communist and non-Communist nations. The People’s Republic of China (PRC) fell firmly into the Communist camp, while the US was at the head of those opposing communism. US relations with China were further complicated by the existence of the Republic of China (ROC) on Taiwan, which was an ally of the US and still recognized as the legitimate government of the whole of China by most countries in the non-Communist bloc. Additionally, the ROC held China’s UN Security Council seat. The two sides actually fought an armed conflict in the Korean War, which resulted in the deaths of nearly two hundred thousand Chinese soldiers and over thirty thousand Americans.

The first steps towards Sino-US reconciliation came somewhat out-of-the-blue in the early 1970s, although, with hindsight, there was clear motivation for wanting rapprochement on both sides. The US was mired in the Vietnam War and still feared the “domino effect” of communism toppling state after state across the world. The US leadership felt that they needed a breakthrough to split the most powerful country within that bloc (the USSR) from other significant players. This coincided with a Sino-Soviet rift of the 1960s that had, by the end of the decade, become a serious threat to the PRC’s own perception of its national security, exemplified by a series of border skirmishes that occurred between the two former allies at that time.

In the autumn of 1969, there existed no official channel of exchange between the People’s Republic of China and the United States, so that when Nixon wanted to indicate to China his willingness to create conduits of communication between the two countries, he had to relay the message through the Pakistani and Romanian leaders who then communicated with China. Having received no reply from China, Nixon tried again in December 1969. The US ambassador to Poland approached his Chinese counterpart at a function in Warsaw. This time China responded, albeit in a circuitous manner through the two countries’ respective ambassadors to Pakistan, indicating that the two respective ambassadors to Poland might meet in Warsaw in January 1970. In this meeting, the US expressed willingness to send an envoy to China. In a second meeting China communicated that if the Americans wished to upgrade their diplomatic relations with China, they would need to recognize that Taiwan was a part of China and to withdraw all US forces from the Taiwan area. Nixon again pushed to establish a direct channel of communication with Beijing so that the two countries could more effectively discuss Taiwan and other issues. However, events in Southeast Asia complicated the process, with the US deeply entrenched in the war in Vietnam and China involved in a power struggle with the Soviet Union involving both Cambodia and Vietnam.

An acceleration in the Sino-US reconciliation came in March 1971 when the US and Chinese ping pong teams met in Japan, during which the Chinese invited the American team to visit China. The visit of the American ping pong team to China received prominent coverage in Chinese media. During the visit, the American team met with Premier Zhou Enlai at the Great Hall of the People, where he declared that the Americans’ visit had “opened a new chapter in the history of the relations between the Chinese and the American people.” This “ping pong diplomacy” paved the way for Henry Kissinger’s clandestine visit to China in July 1971, which laid the groundwork for Nixon himself to make his historic visit to Beijing in February 1972. The famous image of Nixon walking down the steps of the plane with his hand extended came about because Kissinger had caused great offence by refusing to shake hands with Zhou Enlai on his own visit. Nixon’s gesture was appreciated by the Chinese who considered it a restoration of ‘face’. During the visit, President Nixon agreed to withdraw US forces from Taiwan, and to publicly recognize that there was only “one China” as Taiwan was part of Chinese territory. Although it paved the way for a normalization of diplomatic relations between China and the US, thus driving a wedge between the two major Communist powers of the Soviet Union and China, the ‘one-China’ concession was viewed as highly controversial, with many in the US as it was considered an abandonment of a long-term ally. This controversy, along with the disruption caused by the deaths of both Mao and Zhou Enlai in China, meant that it took a further seven years before diplomatic relations were finally established between the US and the PRC, causing the US to cut official ties with Taipei in the process. In order that agreement could be reached within the US, the Taiwan Relations Act was passed. Under the terms of the Act, the US allows Taiwan to be treated as a normal state in its relations in everything but name and, even more significantly, it legally obliges the US to “provide Taiwan with arms of a defensive character”. These provisions were essential to the acceptance of the switch of diplomatic recognition from Taipei to Beijing, allowing the two countries to formalize their diplomatic relations. Yet these provisions also created the greatest source of current tension between the two countries.

Taiwan

The status of Taiwan cannot be ignored in any aspect of China’s international relations; it is impossible for any state in the international system to have diplomatic relations with Beijing without recognizing the PRC’s sovereignty over the island. This is especially pronounced in the relationship with the US, and in almost every high level political meeting it is incumbent on the representatives of the US to reiterate their support for the “one-China policy”. The special relationship that exists between the US and Taiwan is at the root of this sensitivity, but it is more serious than a linguistic exercise in diplomacy. The US has, on several occasions, demonstrated its willingness to defend Taiwan should it be subject to an unprovoked attack from the PRC. This was evidenced in the 1996 deployment of warships to the Taiwan Strait in response to PRC missile testing in the region. Additionally, the US has continued to meet its legal obligation to provide Taiwan with defensive arms which provokes strongly worded protests from Beijing on each occasion. Since 1990, according to a US Congressional report, Taiwan has made major purchases in every calendar year except for 2006 and 2009. The most recent purchase, agreed in January 2010, included 114 PAC-3 defense missiles and 60 Black Hawk helicopters in a deal worth almost $6.4 billion; one of the largest ever agreed. In 2011, the US reached a decision to refurbish Taiwan’s fleet of F-16s, stopping short of approving the sale of new planes, but going far enough to anger China. While there are now some calls among American academics to rethink this alliance, it is unlikely to alter in the near future.

Belgrade Embassy Bombing and Hainan Spy Plane Incident

At both the political and popular levels, the reputation of the US in China has suffered greatly in recent years for a number of reasons. The most notable incidents were the bombing of the Chinese embassy in Belgrade by US forces in 1999, and the collision of a US spy plane with a Chinese fighter jet close to Chinese territory two years later. The embassy bombing, which resulted in the deaths of three Chinese staff, occurred during the action against Slobodan Milosevic’s regime. It was blamed by the US on outdated maps that failed to identify the building as the Chinese embassy, despite the fact that it had been in that location for three years. This version of events has never been fully accepted by the Chinese. The reaction in China was one of anger and outrage. Popular protests in Chinese cities culminated with an attack on the US embassy by a mob of protesters who threw stones and other projectiles, and tried to set fire to the building with the US ambassador still inside. A similar reaction occurred in 2001 when a US spy plane was intercepted by Chinese jets and ultimately collided with one of them, killing its pilot and causing the US plane to make an emergency landing on Hainan. Its 24 crew were captured and held by the Chinese authorities, who refused to release them until an apology was issued by the US government, though the eventual apology was deliberately ambiguous and designed to allow both sides to claim a moral victory.

Economic Interdependence

Trade relations and the growing level of economic interdependence that exists between both countries cannot be ignored in any assessment of the bilateral relationship. The level of trade is a cause of concern for some in the US, both because of its exceptionally high trade deficit with China and because of the belief that this deficit is caused in large part by the PRC’s policy of maintaining a debased RMB. The high level of trade dependence, while viewed by some as a sign of US weakness, is in fact seen by many as a reason for optimism. Some scholars argue that high levels of economic interdependence lead to stable and peaceful relations between states due to the resulting greater levels of bilateral interaction and the increased costs to both sides of conflict. There are concerns in the US that Chinese ownership of US debt puts the US in a position of weakness vis-à-vis China; in theory, if China decided to sell its debt and its other holdings of US currency en mass, it could trigger a collapse in the value of the dollar and an economic crisis in the US. However, the result of such an action would be catastrophic for China as well given that any collapse in the value of the dollar would diminish the value of their huge reserves, as well as triggering a global economic downturn that would unquestionably affect China detrimentally. Indeed, recent Chinese criticism aimed at the US about its debt ceiling management indicates that China understands fully how much it has invested in the prudent management of the US economy and its currency. Thus, it seems well argued that the economic relationship is mostly beneficial to the overall condition of the political relationship between the two states.

Human Rights

On the agenda at every high-level meeting between almost any Western nation and China is the issue of human rights and political reform. In no Chinese international relationship is this more prominent than with the US. While many in the US consider this to be an important issue that their leaders have a moral responsibility to tackle with China, the issue of human rights is perceived by the CCP leadership as, at best, an irritation and, at worst, a hypocritical infringement of China’s sovereignty. The annual report issued by the US State Department on China’s human rights record is frequently critical of the lack of, among other issues, freedom of religious expression, the failure to liberalize politically, and the practice of detention without trial. In 1998, in direct response to this criticism, China began to publish its own annual report on the US record on human rights. In 2004, for example, this report highlighted the abuses of Iraqi prisoners of war at Abu Ghraib. While this report is not taken seriously in the US, it is designed to reveal what many on the Chinese side view as double-standards from the US over this issue.

Perhaps the most prominent ongoing issue of human rights in China that concerns the US government and many of its citizens alike is the issue of Tibet. Although the US explicitly recognizes Tibet to be sovereign Chinese territory, it frequently expresses concern over apparent human rights abuses in the region. The position of the Dalai Lama, dismissed in Beijing as a “splittist”, is a constant thorn in Sino-US relations. Every US president since George Bush Senior has met with the Dalai Lama – though, with the exception of George W. Bush’s presentation of the Congressional Gold Medal to the Tibetan leader in 2007, these meetings are never in public – and, on each occasion, Beijing reacts with venomous language. In 2010, a Chinese official issued a veiled threat over President Obama’s planned meeting, calling it both “irrational and harmful” and warning that China “will take necessary measures to help them realize this (US mistake)”. However, such rhetoric has yet to sway any president from a planned meeting with the Dalai Lama, though the US continues to give limited publicity to such meetings; just a single photo of Obama’s meeting was released.

China’s Military Development

A key concern in the US regarding China’s increasing power in the international system pertains to its military development. There is a widespread perception that China’s rapidly developing military capacity and its year-on-year double-digit increase in expenditure has positioned it as a military rival to the US. Such views, however, are not accurate. While it is true that China’s military expenditure has grown by significant amounts in recent decades, it is important to put this into some kind of perspective. According to figures from the Stockholm International Peace Research Institute (SIPRI), the most widely-respected research organization that reports on such matters and one that uses educated estimates to include military spending that is not declared in official statistics, China’s military expenditure as a proportion of GDP has actually fallen from 2.5% in 1990 to 2.2% in 2009. For comparison, the figures for the US show military expenditures were at 4.7% of GDP in 2009. More significantly, despite the sharp increase in absolute terms, and even using the higher estimate provided by SIPRI, China’s military budget remains less than one fifth of that of the US, whose own expenditure exceeds the combined total of the next 17 largest military budgets. Similarly, apparent advances in military technology, while unquestionably real, appear to have been exaggerated. The reports of the testing of a new Chinese Stealth fighter earlier this year were, in some quarters, treated as proof that US superiority is being eroded. Yet this seems premature; conservative estimates suggest that even if the testing was successful, and there is no evidence in the public domain that it was, then it will likely be at least seven years until the technology is battle-ready. Given the consistent levels of investment in military technology in the US, it is improbable that its own arsenal would stand still over this period and, in any case, it already has in excess of 130 stealth fighters that are ready for military deployment.

Future Trends

As with most bilateral interaction in the international system, there are causes for both optimism and pessimism in the Sino-US relationship. There are signs of both the rivalry

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and partnership that Presidents Bush and Clinton identified. The economic interdependence has two principle benefits that ought to aid relations. Firstly, the increased mutual reliance on each other’s economies raises the cost of any potential conflict for both parties, which ought to at least alleviate some tensions. Secondly, the higher amount of interaction at a societal level that results from the natural course of trade should foster a greater understanding between the two peoples, and go some way towards mitigating the mistrust that has developed over recent decades. As demonstrated above, the oft-cited military build-up is not as great a threat to the balance of power as is sometimes suggested. Additionally, the number of contacts between the two militaries is reason for cautious optimism.

Nevertheless, there are other issues that may come to the fore which, if not handled sensitively on both sides, may cause Sino-US relations to deteriorate. For instance, as China’s involvement in, and financial contribution to, major international organizations such as the World Bank and IMF has increased, it has also jockeyed for more influence within the organizations still dominated by the US and Europe; in 2008, Justin Yifu Lin, a Chinese citizen who was born in Taiwan but defected to the PRC, was appointed as Vice-President at the World bank. The US has been reluctant to weaken its positions of prominence and this has caused resentment in China. In some cases, this resentment has contributed to China’s decision to work outside of existing frameworks. For example, the Shanghai Cooperation Organization, in which China plays the leading role, has been termed as a potential competitor to NATO. China decided to work within the G77 instead of joining a G9 so that its interests would not be overwhelmed by the other Western-oriented members. China’s creation of rival international frameworks not only frustrates a US accustomed to global control, but it also creates concerns about China’s ultimate aims and intentions.

Similarly, as China’s economy expands, it will be a fiercer competitor with the US for natural resources and basic commodities around the globe. This affects the Sino-US relationship in three ways. Firstly, as natural resources are finite, there may become a time when there will not be enough resources to go around and China’s acquisition of resources may be at the expense of the US. Secondly, rising global demand, much of which has been driven by China’s booming economy, has sent global prices for commodities to record levels. In April 2011, the IMF raised its global inflation forecast from 3.7% to 4.5% due to these commodity price gains. Similarly, the IMF revised its 2011 US inflation forecast to 2.2% in 2011 up from 1% in 2010 due to higher food and energy prices. If inflation continues to increase, the US may feel pressured to raise interest rates to curb its rise, thus putting at risk the already weak Western recoveries. Finally, China’s eagerness to secure supplies of natural resources has led it to form alliances with countries which Western powers have tried to ostracize. Such Chinese alliances directly conflict with US policies in the region, and can inflame citizen passions on both sides. Mia Farrow, for instance, led protests against Beijing’s “genocide Olympics”, so-called because of China’s continued support of the Sudanese regime despite its actions in Darfur. The Chinese reject such claims out of hand, and viewed Western attempts to meddle with the Olympics as insulting and an attack on its national honor. China maintains that it does not interfere in internal affairs of other countries. This position stems from China’s own experiences of occupation and meddling in its affairs by Western powers during the late 1800s and early 1900s, as well as the brief, but unsuccessful, period in the early years of the PRC when Maoist policies were exported to other countries. It is certainly observable that the no-strings attached approach to infrastructure investment in Africa has had some significant benefits for China in terms of promoting itself there.

Yet despite these many issues of concern between the two countries, some form of which will undoubtedly remain between the two powers as the US adjusts to a more vocal and powerful China in the international arena, outright conflict between the two powers is highly unlikely. Instead, current and future issues between the two countries will continue to be resolved, or at least mitigated, through negotiation and diplomacy.

The wildcards in this prediction are Taiwan and the ongoing dispute over the Diaoyu/Senkaku islands with Japan. The special relationship that exists between the US and Taiwan, and the US’s own legal obligations to defend the island should it be attacked, render the possibility of military conflict between China and the US over Taiwan a possibility, however unlikely. Vigilance on both sides – and in Taiwan – is essential in order to avoid a conflict that would be to nobody’s benefit. Similarly, the US is committed to defending Japan, its closest ally in Asia, should it be attacked. The simmering tensions over the Diaoyu/Senkaku islands that boiled over in 2012 continue to cause concern for US policy-makers. The US will continue to push for diplomatic resolution on this issue but an outside chance of a low-level military conflict cannot be ruled out.