More than a year ago, China took the initiative in requesting the establishment of a free-trade zone with the member countries of the ASEAN.
To show its goodwill, and in a bid to assuage the doubts of some, Beijing made a concession on customs duties on agricultural products from Indonesia, Thailand, the Philippines and other countries that greatly rely on agricultural exports.
China finally won the support of all the ASEAN states and signed the Framework Agreement on Comprehensive Economic Cooperation with the trade organization.
Similarly, Beijing was originally opposed to ASEAN's request for an agreed upon code of conduct in the South China Sea. After more than two years of negotiations, it eventually gave in -- due to developments in the regional situation, as well as the strength of its wish to establish the free-trade zone -- and signed the non-binding Declaration on the Conduct of Parties in the South China Sea.
With such a give-and-take strategy, China and ASEAN successfully reached agreements since both stood to gain, in both economic and security terms.
The China-ASEAN agreements on economy and security certainly represent great progress in Beijing's efforts of recent years to maintain a peaceful international environment, which allows it to focus on developing its economy with all its strength.
China signed an agreement on military confidence-building in border areas with Kazakhstan, Kyrgyzstan, Russia and Tajikistan in April 1996, and a similar agreement with India concerning the Line of Actual Control in the Sino-Indian Border Areas in November of the same year. Later, in April 1997 it signed the Agreement on Mutual Reduction of Military Forces in the Border Areas with the afore-mentioned Central Asian countries.
In December 2000, it signed, with Vietnam, the Agreement on the Delimitation of the Beibu Bay Territorial Sea, the Exclusive Economic Zone and Continental Shelves. Today's China, in short, finds itself in much safer surroundings than in the past, having completed security negotiations and arrangements on its periphery -- apart from the Taiwan Strait and the Korean Peninsula.
The current stagnant state of cross-Strait relations is not a major security threat to China. At least, in contrast to the former KMT government (which wished to reclaim the mainland), the DPP government only wishes, at most, to separate itself from China and therefore constitutes no direct threat to Beijing.
As for the Korean Peninsula, China's northeast frontier should be safe as long as North Korea remains isolated or is not infiltrated by foreign forces.
Even if North Korea continues its "cross recognition" with the Western countries, it will not threaten China's border security -- since it has already developed a strong sense of nationalism and is unlikely to be used by the West.
China's breakthrough in winning strategic advantages in Southeast Asia through compromise and concession was therefore of considerable significance. The Spratly Islands issue is a territorial issue. But these islands are widely scattered and, in any case, tiny -- not to mention the fact that whether they contain any reserves of oil and natural gas has yet to be established.
Besides, the surrounding waters are full of hidden reefs that would hamper naval activity. The strategic value of such tiny islets is also limited.
But Beijing used security issues arising from the disputes over these islets, making them bargaining chips. It then made concessions on them in exchange for agreements on economic cooperation.
Such a pragmatic approach shows that Beijing is ditching its inflexible "dogmatic diplomacy."
Moreover, in the next decade, economic cooperation will develop on a huge, regional scale with the establishment of the China-ASEAN free-trade area. A strategic economic development of that magnitude cannot be ignored -- even though ASEAN's industry and China's industry do not complement each other perfectly. In fact, the association and China actually compete with each other in many ways.
Indeed, pressured by the development, Japan also signed an agreement on trade investment liberalization with ASEAN, hoping to accomplish this goal in the next 10 years.
The competition between China and Japan is obvious, and the two seem to be almost a perfect match for one another. China enjoys strong economic growth, a huge potential market and the support of overseas Chinese who have considerable economic power in Southeast Asia.
But China only attracts foreign capital and seldom makes investments abroad -- which is often a cause for complaints from the Southeast Asian countries.
Japan, has suffered low economic growth in the "bubble economy" of recent years. But it still has capital and technology. Besides, the Japanese government has always helped Southeast Asian countries, so these countries still have great expectations of Japan.
From the ASEAN's perspective, the member countries are scheduled to establish the ASEAN Free-Trade Area by 2010, followed by a China-ASEAN free-trade area. They are also scheduled to establish the ASEAN Free-Investment Area by 2020.
The recent signing of the Japan-ASEAN agreement on completing their free-trade and investment negotiations within 10 years was just an expansion of ASEAN's original plan.
By including Japan in its scheme, ASEAN hopes that it will prompt the Japanese to increase their investments in the association's member countries.
ASEAN and India also agreed in September to form a free-trade area, and are studying the feasibility of forming an India-ASEAN free-trade and investment area.
In the light of all these developments, the association's strategy is obvious -- the association has expressed goodwill separately to China, Japan and India because maintaining equally close relations with these three parties will benefit the economy and security of the association.
The ASEAN countries also understand that it would not be easy to incorporate China, Japan and South Korea -- all Northeast Asian countries -- into the association's free-trade framework at the same time.
After China took the initiative in forming a free-trade area with ASEAN, the association started its economic cooperation with Japan. South Korea is still studying the likely pros and cons of forming a free-trade area with the association and has not yet made a decision.
To sum up, today's East Asian "economic plates" are basically developing into a free-trade area. Although Southeast Asia is forming a free-trade area with China, however, it is unlikely to fall into China's sphere of influence -- because ASEAN will strive to maintain a balance between the Chinese and Japanese, or even India and the US. Therefore,Taiwan should reconsider its own position as it faces this situation.
Chen Hurng-yu is a professor of history at National Chengchi University.
TRANSLATED BY EDDY CHANG
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